Interim Results

PREMIER UTILITIES TRUST PLC Unaudited Interim Report for the six months ended 30 June 2005 Statement of Total Return (Unaudited) Six months ended 30 June 2005 Revenue Capital Total £000 £000 £000 Gains on investments: realised 0 2,436 2,436 unrealised 0 248 248 Income: Dividends 1,232 0 1,232 Interest 75 0 75 Management fee (256) (19) (275) Other expenses (211) 0 (211) Investment transaction costs - (75) (75) Return before finance costs & taxation 840 2,590 3,430 Finance costs (14) (706) (720) Return on ordinary activities before taxation 826 1,884 2,710 Taxation on ordinary activities (167) 0 (167) Return on ordinary activities after taxation 659 1,884 2,543 Total Return per ordinary share (pence): 14.01 PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) Statement of Total Return (Unaudited) Period from 12 September 2003 to 30 June 2004 Revenue Capital Total £000 £000 £000 Gains on investments: realised 0 1,289 1,289 unrealised 0 2,219 2,219 Income: Dividends 1,470 0 1,470 Interest 59 0 59 Management fee (303) 0 (303) Other expenses (281) 0 (281) Return before interest payable & taxation 945 3,508 4,453 Interest payable 0 0 0 Return on ordinary activities before taxation 945 3,508 4,453 Taxation on ordinary activities (112) 0 (112) Return on ordinary activities after taxation 833 3,508 4,341 Appropriations in respect of non-equity shares: Zero Dividend Preference 0 (879) (879) Return on ordinary activities 833 2,629 3,462 Total Return per ordinary share (pence): 18.90 PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) Statement of Total Return (Audited) Period from 12 September 2003 to 31 December 2004 Revenue Capital Total £000 £000 £000 Gains on investments: realised 0 2,681 2,681 unrealised 0 7,043 7,043 Losses on foreign exchange (121) (121) Income: Dividends 2,562 0 2,562 Interest 158 0 158 Management fee (529) (1,124) (1,653) Other expenses (486) 0 (486) Return before interest payable & taxation 1,705 8,479 10,184 Interest payable (5) 0 (5) Return on ordinary activities before taxation 1,700 8,479 10,179 Taxation on ordinary activities (163) (17) (180) Return on ordinary activities after taxation 1,537 8,462 9,999 Appropriations in respect of non-equity shares: Zero Dividend Preference 0 (1,576) (1,576) Return on ordinary activities 1,537 6,886 8,423 Total Return per ordinary share (pence): 46.10 PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) Balance Sheet as at 30 June 2005 Notes Restated Restated (Unaudited) (Unaudited) (Audited) 30 June 30 June 31 December 2005 2004 2004 £000 £000 £000 Fixed assets Investments 1 41,563 36,372 45,196 Current assets Debtors 280 316 1,483 Cash at bank 6,598 4,108 453 6,878 4,424 1,936 Creditors - amounts falling due within one year Creditors 1 (85) (122) (1,346) Net current assets 6,793 4,302 590 Total assets less current liabilities 48,356 40,674 45,786 Creditors - amounts falling due after more than one year: Zero dividend preference shares 2 (21,425) (20,022) (20,719) Net assets 26,931 20,652 25,067 Capital and reserves Equity share capital 181 181 181 Redemption Reserve 10 10 10 Special reserve 2 17,474 17,474 17,474 Capital reserve - realised 1,526 411 (157) Capital reserve - unrealised 7,245 2,219 7,043 Revenue reserve 495 357 516 Total shareholders' funds 26,931 20,652 25,067 NAV per ordinary share (pence) † 146.92 112.33 135.91 NAV per zero dividend preference share (pence) 111.92 104.59 108.23 †The net asset value per ordinary share at 30 June 2005 excludes the second interim dividend of 1.5p for the half year ended 30 June 2005 which was declared on 29 July 2005. In accordance with FRS 25 this dividend is not recognised in these financial statements. The net asset value per ordinary share at 30 June 2004 excludes the interim dividend of 1.5p for the half year ended 30 June 2004 which was declared on 29 July 2004. The net asset value per ordinary share at 31 December 2004 excludes the final dividend of 2.25p for the year ended 31 December 2004 which was declared on 16 February 2005. PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) Cash Flow Statement for the six months ended 30 June 2005 (Unaudited) (Audited) (Unaudited) Period from Period from six months 12 September 12 September ended 2003 2003 30 June to 30 June to 31 December 2005 2004 2004 £000 £000 £000 Operating activities Income received from investments 1,438 1,257 2,144 Interest received 70 53 125 Other income received - - 16 Investment management fees paid (1,500) (264) (442) Other cash payments (171) (218) (449) Net cash (outflow)/inflow from operating (163) 828 1,394 activities Servicing of finance Interest paid (14) - (5) Taxation Overseas tax paid (167) (110) (187) Financial investments Purchases of investments (20,677) (49,636) (88,371) Sales of investments 26,848 37,749 73,684 Investment transaction costs (75) - - Liquidation of futures and options 1,073 - (854) Net cash inflow/(outflow) from financial 7,169 (11,887) (15,541) investments Equity dividends paid (680) (476) (1,021) Net cash inflow/(outflow) before financing 6,145 (11,645) (15,360) Financing Issue of share capital - 17,281 17,341 Redemption of preference shares - (50) (50) Buyback of ordinary shares - (906) (906) Formation costs - (572) (572) Net cash inflow from financing - 15,753 15,813 Increase in cash 6,145 4,108 453 PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) NOTES 1. These financial statements are prepared under the historical cost convention as modified by the revaluation of fixed asset investments and in accordance with applicable accounting standards and with the Statement of Recommended Practice 2003 regarding the Financial Statements of Investment Trust Companies ("SORP"). The Company has adopted FRS 25 "Financial Instruments: Disclosure and Presentation", FRS 26 "Financial Instruments: Measurement" and FRS 21 "Events after the Balance Sheet Date" in these financial statements. The detailed disclosures required by FRS 25 will be presented in the Company's annual report for the year ending 31 December 2005. The significant accounting impact on these interim financial statements is set out below: · Listed investments have been valued at their bid prices whereas in prior periods they had been valued mid prices. The figures for the prior periods have not been restated for this change in accounting policy. · Dividends on the Company's Ordinary shares will not be recognised in the financial statements until they have been declared whereas in prior periods they were recognised in the period to which they relate. The figures for the prior periods have been restated for this change · The Company's zero dividend preference shares are classified "Creditors: amounts falling due after more than one year" and not as part of "Capital and reserves". The figures for the prior periods have been restated for this change. · Investment transactions costs, which mainly comprise of brokers commission and stamp duty on purchases of investments, are now disclosed separately in the Statement of Total Return whereas in prior periods they had been added to the cost of the investment. The transaction costs for prior periods are not readily available and the figures for the prior periods have not been restated for this change. With the exception of the changes stated above, the accounting policies adopted in the 2004 financial statements remain unchanged. 2. Due to the change in the classification of the Company's zero dividend preference shares the special reserve has been allocated between the interests of the Company's zero dividend preference shares and ordinary shares. The special reserve has been restated as follows: 30 June 30 June 31 December 2005 2004 2004 £000 £000 £000 Opening balance as previously stated 36,426 36,426 36,426 Allocation to zero dividend preference shares (18,952) (18,952) (18,952) Opening balance restated 17,474 17,474 17,474 PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) NOTES (continued) 3. The figures and financial information for the period ended 31 December 2004 are an extract from the latest published accounts and do not constitute statutory accounts. Full accounts for that period have been delivered to the Registrar of companies and included the report of the auditors which was unqualified. The accounts for the six months ended 30 June 2005 and the period ended 30 June 2004 are unaudited and do not constitute statutory accounts. 4. On 29 July 2005 the Directors declared a second interim dividend of 1.5p net per Ordinary shares for the year ending 31 December 2005 to holders of Ordinary Shares on the Register on 24 August 2005. The Ordinary shares will be marked ex-dividend on 26 August 2005 and the dividend will be paid on 30 September 2005. 5. The revenue return per Ordinary share is based on earnings of £659,000 (period ended 30 June 2004: £833,000) and on 18,143,433 Ordinary shares in issue during the six months ended 30 June 2005 (period ended 30 June 2004 a weighted average of 18,318,433 shares). 6. The capital return per Ordinary share is based on net capital gains of £1,884,000 (period ended 30 June 2004: £2,629,000) and on 18,143,433 Ordinary shares in issue during the six months ended 30 June 2005 (period ended 30 June 2004 a weighted average of 18,318,433 shares). 7. It is the intention of the Directors to conduct the affairs of the Company so that they satisfy the conditions for approval as an investment trust company set out in section 842 of the Income and Corporation Tax Act 1988. 8. At 30 June 2005 there were 18,143,433 Ordinary shares of 1p each and 19,143,433 Zero Dividend Preference shares of 1p each in issue. 9. The net asset value per Zero Dividend Preference share of 111.92p at 30 June 2005 (104.59p at 30 June 2004) has been calculated in accordance with the Articles of Association. 10. The interim report will be mailed to shareholders on or around 17 August, 2005. It will not be advertised in newspapers, but copies will be available from that date at the Company's Registered Office at Eastgate Court, High Street, Guildford, Surrey GU1 3DE. PREMIER UTILITIES TRUST PLC Unaudited Interim Report (continued) CHAIRMAN'S STATEMENT This report covers the period from the 31 December 2004 to the 30 June 2005. Over this period the assets of your Company have once again made steady progress rising from £45.4m to £48.6m on a total return basis, or an increase of 7.16%. Benign interest rate and inflationary expectations, together with continuing uncertainty over the pace of global economic recovery, have continued to attract investors into the utility sector. In the UK the regulatory reviews for the water and electricity sectors offered little in the way of surprise, the allowed returns holding out the prospect of continued dividend growth even for those companies which had high levels of balance sheet gearing. Although the utility sector has marginally underperformed the more general market indices during the period under review, this should be set in the context of its strong outperformance last year. The net asset value for the Company's Ordinary shares has risen from 135.91p to 146.92p (excluding the interim dividends paid or proposed) or an increase of 8.1%. The terminal value of the Ordinary shares has thus risen from 78.8p to 93.9p allowing for the terminal accrual on the Company's Zero Dividend Preference shares. Terminal asset cover for the ZDP shares has risen from 150.45% to 155.5%, making the shares one of the better-covered issues in the split capital sector. The price of the Ordinary shares has risen from 112.75p at the end of December 2004 to 116.75p at 30 June 2005 whilst the price of the ZDP shares has risen from 114.75p to 120.25p. However, the package discount, that is to say the market capitalisation of the Company versus its total asset value, has widened slightly from 6.5% to 8.1%. PERFORMANCE Your Board has not adopted a single benchmark index against which the performance of your Company is measured. This is because our portfolio is specialised in nature and is internationally diversified across a range of different infrastructure industries. However, your Board has provided, and will continue to do so in all reports and accounts, a range of stock market indices against which the Manager's performance may be assessed. The performance of these indices and of the Company's assets is shown below: 31 December 2004 30 June 2005 % Change FTSE Global Utilities Index ($) * 5,377.76 5,789.61 +7.66% FTSE Utilities Index (£) * 2,643.38 3,026.92 +14.51% FTSE World Index (£) * 248.59 266.70 +7.29% FTSE 100 Index (£) * 2,527.40 2,737.98 +8.33% Company's Total Assets*† £45.37m £48.62m +7.16% Net Asset Value per Ordinary share‡ 135.91p 146.92p +8.10% Net Assets Value per ZDP share 108.23p 111.92p +3.41% £/$ Exchange 1.9181 1.7925 -6.55% £/€ Exchange 1.4153 1.4806 +4.61% * Total Return † Including interests of ZDP shareholders ‡ Excludes all dividends, paid and proposed, on the Company's Ordinary shares. Hurdle Rate* Terminal Cover Ordinary Shares 1.9% -- ZDP Shares -7.3% 1.52 *The annualised growth rate of total assets required to return the share price of the Ordinary shares at 30 June 2005 and the terminal value of the Zero Dividend Preference shares. Your Company's portfolio continues to be very underweight in US utilities and commensurately overweight in European utilities. The Manager continues to believe that better fundamental value exists in the European utility and infrastructure sector although the recent weakness of the Euro versus the Dollar has meant that the Trust has marginally underperformed the FTSE Global Utilities Index. Overall performance however, continues to be good with total assets having increased since launch by 32%. Dividends Following the payment of the Company's final interim dividend of 2.5p for the period ended 31 December 2004 on 31 March 2005 the Company has declared and paid an interim dividend of 1.5p per Ordinary share for the year ending 31 December 2005. This dividend was paid on 30 June 2005. A second interim dividend of 1.5p per Ordinary share for the current financial year was declared on 29 July 2005 and will be paid on 30 September 2005 to shareholders on the register as at the close of business on 24 August 2005. It is the Board's intention, barring unforeseen circumstances, to maintain an annual dividend of 6.75p per Ordinary share for the current financial year. Shareholder relations The Board and the Investment Manager welcome contact not only with the Company's existing investors but also potential investors. The Manager has met all of the Company's major investors over the period as well as a number of potential investors. This has resulted in a broadening of the share register for both classes of share. Directors On behalf of the Board I would like to thank William Syson who retired as our Chairman at the annual general meeting in April 2005. He brought many years experience to our deliberations and we will miss him. I am delighted to welcome Adam Cooke to the Board. He has been involved with fund management and the investment trust industry for many years at Invesco Perpetual, and as a Global Partner of the parent company Amvescap PLC, and we are looking forward to working with him. Accounting Policies UK GAAP is converging with International reporting Standards and note 1 to the interim financial statements sets out the main changes resulting from the adoption of FRS 25 "Financial Instruments: Disclosure and Presentation", FRS 26 "Financial Instruments: Measurement" and FRS 21 "Events after the Balance Sheet Date in these financial statements. Outlook The performance of the utility and infrastructure sector is, to an extent, determined by the outlook for bond markets and thus by the medium and long-term outlooks for inflation and interest rates. Recent stability in these two key drivers has been helpful to the sector. However, the perfect calm for utilities may be abating a little. Fuel prices used to generate power have escalated, reflected in the very high price of carbon credits. Some political pressure is building, notably in Germany with some areas of the political spectrum crying foul over high energy prices. Also it is clear that the economies of the world remain very sensitive to changes in inflation and interest rates. However, our investment portfolio is a diverse one, ranging in scope from utilities and infrastructure companies such as airports and toll roads, to regulated telecoms companies. Given this diversity in investment opportunity we feel comfortable that further progress may be made this year, as long as significant changes in the inflation and interest rate outlook do not occur. Geoffrey Burns Chairman 29 July 2005 Premier Utilities Trust PLC Eastgate Court, High Street, Guildford, Surrey GU1 3DE Enquiries: Andrew Whalley (telephone 01483 400400)

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