Final Results

RNS Number : 5566H

Rights and Issues Inv Trust PLC

23 February 2010

 



RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CHAIRMAN'S STATEMENT

The UK economy shrank by 4.8% in 2009, its largest annual fall since the Great Depression. This had a substantial impact on UK smaller companies and, in particular, on those that were either heavily geared or exposed to the capital goods cycle.

Given the economic woe, it may appear surprising that the UK stock market staged a significant recovery during the year. As always it is anticipation that counts and the events of 2009 had already been discounted. This explains the 25.0% rise in the FTSE All-Share index and the even larger rises in small cap indices.

Your Trust has had a mixed year with the majority of investments recouping their previous falls but there were also casualties. The net asset value of the capital shares rose from 1643.3p to 2158.5p and that of the income shares from 459.0p to 549.3p. This represents an increase of 31.4% and 19.7% respectively.

Discretionary Unit Fund Managers experienced a modest improvement with pre-tax profits of just under £150,000. It benefited in the year from the stock market rise and therefore enjoyed some stock profits which are unlikely to be repeated in the current year.

With the fall in contribution from Discretionary Unit Fund Managers in the last two years and the dramatic decline in investment income this year, Your Directors feel it prudent to reduce further the level of dividend to 25.5p per income share and 1.275p per capital share. There is now a greater emphasis within the investment portfolio on income generation and it is hoped that this level of distribution will be covered within a few years. In the meantime, Your Trust is able to draw upon the substantial dividend reserves built up over the years. Additionally, the supplementary capital dividend of 68.6829p per capital share was paid on 2nd January, 2010 and, barring unforeseen circumstances, will be maintained at 68.6829p per capital share payable on 2nd January, 2011.

The prospects for 2010 are difficult to fathom. Weak sterling is helping the recovery in exports but the outlook for public expenditure after the forthcoming General Election is dire. The performance of many smaller companies in the recent adverse conditions has been encouraging and demonstrates the virtues of investment in this area.

S. H. J. A. KNOTT

Chairman

You can view or download copies of the Half Year and Annual reports from our website at www.rightsandissues.co.uk.

They are to be posted to shareholders and are available at the registered office of the Company.

Risks and uncertainties

Cautionary statement

This report contains forward-looking statements that involve risk and uncertainty. These have been made by the directors in good faith based on the information available to them at the time of their approval of this report. Due to the inherent uncertainties, including stock market risk factor, actual results may differ materially from those expressed or implied by these forward-looking statements.

Further information on the principal long-term risks and uncertainties of the Trust is included in the annual report.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and accounts in accordance with applicable United Kingdom law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

The Directors are required to prepare the accounts for each financial year which present fairly the financial position of the Group and the financial performance and cashflows of the Company and the Group for that period. In preparing those Accounts the Directors are required to:

•	select suitable accounting policies and then apply them consistently;

•	present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

•	provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the group's financial position and financial performance;

•	state that the Company has complied with IFRS subject to any material departures disclosed and explained in the accounts; and

•	prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Accounts comply with the Companies Act 2006 and Article 4 of the IAS regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and the Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Visitors to the website need to be aware that legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors confirm that to the best of their knowledge that:

•	the accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group; and

•	the annual report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that they face.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CONSOLIDATED INCOME STATEMENT

for the year ended 31st December, 2009

			Year ended 31st December, 2009						Year ended 31st December, 2008
	Notes		Revenue		Capital		Total		Revenue		Capital		Total
			£		£		£		£		£		£
Investment income	2		1,337,008		-		1,337,008		2,190,628		-		2,190,628
Other operating income	2		238,092		-		238,092		601,994		-		601,994
Total income			1,575,100		-		1,575,100		2,792,622		-		2,792,622
Gains/(Losses) on fair value
through profit or loss assets	10		88,079		11,299,776		11,387,855		(316,824)		(37,130,786)		(37,447,610)
			1,663,179		11,299,776		12,962,955		2,475,798		(37,130,786)		(34,654,988)
Expenses
Investment management fee			-		-		-		-		-		-
Other expenses	3		502,147		-		502,147		540,400		-		540,400
			502,147		-		502,147		540,400		-		540,400
Profit before tax			1,161,032		11,299,776		12,460,808		1,935,398		(37,130,786)		(35,195,388)
Tax	5		-		-		-		1,561		-		1,561
Profit for the period			1,161,032		11,299,776		12,460,808		1,936,959		(37,130,786)		(35,193,827)
Earnings per share
Return per income share (p)	7		0.9p		114.8p		115.7p		31.5p		(377.4)p		(345.9)p
Return per capital share (p)	7		68.7p		516.8p		585.5p		70.3p		(1698.1)p		(1627.8)p

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the parent company. There are no minority interests.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CONSOLIDATED BALANCE SHEET

as at 31st December, 2009

					Company				Group
	Notes		2009		2008		2009		2008
			£		£		£		£
Non-current assets
Goodwill	8		-		-		65,191		65,191
Investments - Fair value through
profit or loss	10		44,425,529		35,413,748		43,994,057		34,982,276
			44,425,529		35,413,748		44,059,248		35,047,467
Current assets
Trading investments			-		-		498,578		419,606
Trade and other receivables	14		238,011		188,136		244,640		211,553
Current tax receivable			29,291		1,648		-		-
Amounts due from group undertakings			949,329		800,849		-		-
Cash and cash equivalents			3,630,674		2,202,487		4,470,403		3,031,234
			4,847,305		3,193,120		5,213,621		3,662,393
Total assets			49,272,834		38,606,868		49,272,869		38,709,860
Current liabilities
Trade and other payables	15		40,595		43,677		161,726		267,765
Current tax payable			-		-		-		-
			40,595		43,677		161,726		267,765
Total assets less current liabilities			49,232,239		38,563,191		49,111,143		38,442,095
Net assets			49,232,239		38,563,191		49,111,143		38,442,095
Equity
Called up share capital	16		1,225,000		1,225,000		1,225,000		1,225,000
Share premium account	17		225,326		225,326		225,326		225,326
Retained reserves:
Capital reserve	17		37,150,280		40,751,585		37,150,280		40,751,585
Revaluation reserve	17		9,217,143		(5,683,938)		9,217,143		(5,683,938)
Dividend equalisation reserve	17		1,414,490		2,045,218		1,293,394		1,924,122
Total equity			49,232,239		38,563,191		49,111,143		38,442,095
Net asset value per share
Income shares							549.3p		459.0p
Capital shares							2158.5p		1643.3p

The financial statements were approved by the board and authorised for issue on 23rd February 2010. They were signed on its behalf by:

S. H. J. A. Knott, Director

S. J. B. Knott, Director

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31st December, 2009

				Share						Dividend
		Share		premium		Capital		Revaluation		equalisation
		capital		account		reserve		reserve		reserve		Total
		£		£		£		£		£		£
Balance at 31st December, 2007		1,225,000		225,326		40,668,355		31,530,078		2,306,183		75,954,942
Changes in equity for 2008
(Loss)/Profit for the period		-		-		83,230		(37,214,016)		1,936,959		(35,193,827)
Total recognised income and expense		1,225,000		225,326		40,751,585		(5,683,938)		4,243,142		40,761,115
Dividends		-		-		-		-		(2,319,020)		(2,319,020)
Balance at 31st December, 2008		1,225,000		225,326		40,751,585		(5,683,938)		1,924,122		38,442,095
Changes in equity for 2009
Profit/(Loss) for the period		-		-		(3,601,305)		14,901,081		1,161,032		12,460,808
Total recognised income and expense		1,225,000		225,326		37,150,280		9,217,143		3,085,154		50,902,903
Dividends		-		-		-		-		(1,791,760)		(1,791,760)
Balance at 31st December, 2009		1,225,000		225,326		37,150,280		9,217,143		1,293,394		49,111,143

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31st December, 2009

				Share						Dividend
		Share		premium		Capital		Revaluation		equalisation
		capital		account		reserve		reserve		reserve		Total
		£		£		£		£		£		£
Balance at 31st December, 2007		1,225,000		225,326		40,668,355		31,530,078		2,427,279		76,076,038
Changes in equity for 2008
Profit for the period		-		-		83,230		(37,214,016)		1,936,959		(35,193,827)
Total recognised income and expense		1,225,000		225,326		40,751,585		(5,683,938)		4,364,238		40,882,211
Dividends		-		-		-		-		(2,319,020)		(2,319,020)
Balance at 31st December, 2008		1,225,000		225,326		40,751,585		(5,683,938)		2,045,218		38,563,191
Changes in equity for 2009
Profit for the period		-		-		(3,601,305)		14,901,081		1,161,032		12,460,808
Total recognised income and expense		1,225,000		225,326		37,150,280		9,217,143		3,206,250		51,023,999
Dividends		-		-		-		-		(1,791,760)		(1,791,760)
Balance at 31st December, 2009		1,225,000		225,326		37,150,280		9,217,143		1,414,490		49,232,239

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CASH FLOW STATEMENT

for the year ended 31st December, 2009

						Company				Group
				2009		2008		2009		2008
		Notes		£		£		£		£
Cashflows from operating activities
(Loss)/Profit before tax				12,431,517		(35,195,475)		12,460,808		(35,195,388)
Adjustments for:
Losses/(Gains) on investments				(11,299,776)		37,130,786		(11,299,776)		37,130,786
Purchases of investments				(5,202,296)		(953,318)		(5,202,296)		(953,318)
Proceeds on disposal of investments		19		7,490,291		768,589		7,490,291		768,589
Movement in trading investments		19		-		-		(78,972)		200,191
Operating cash flows before movements
in working capital				3,419,736		1,750,582		3,370,055		1,950,860
Decrease/(increase) in receivables				(198,355)		(134,705)		(33,087)		101,527
Increase/(decrease) in payables				(3,082)		5		(106,039)		(309,165)
Net cash from operating activities before    income taxes				3,218,299		1,615,882		3,230,929		1,743,222
Income taxes received/(paid)				1,648		70,000		-		(85,252)
Net cash from operating activities				3,219,947		1,685,882		3,230,929		1,657,970
Cash flows from financing activities
Dividends paid				(1,791,760)		(2,319,020)		(1,791,760)		(2,319,020)
Net cash (used in)/from financing activities				(1,791,760)		(2,319,020)		(1,791,760)		(2,319,020)
Net increase/(decrease) in cash and cash equivalents				1,428,187		(633,138)		1,439,169		(661,050)
Cash and cash equivalents at beginning of year				2,202,487		2,835,625		3,031,234		3,692,284
Cash and cash equivalents at end of year				3,630,674		2,202,487		4,470,403		3,031,234

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

Notes:

1. The figures set out above are derived from the audited consolidated accounts of Rights and Issues Investment Trust Plc and its subsidiaries for the years ended 31 December 2008 and 31 December 2009. The 2009 accounts will be sent to shareholders shortly.

2. The financial information contained in this announcement does not constitute full accounts within the meaning of section 254 of the Companies Act 1985. The 2009 accounts, on which the report of the auditors is unqualified, will be filed with the Registrar of Companies in due course. The audited accounts for the year ended 31 December 2008 on which the report of the auditors was unqualified and did not contain a statement under either Section 237(2) or 237(3) of the Companies Act 1985, have been filed with the Registrar of Companies.

3. DIVIDENDS AND OTHER APPROPRIATIONS

Amounts recognised as distributions to equity holders in the period:
	2009		2008		2009		2008
	p		p		£		£
Income
Final dividend for the year ended 31st December, 2008	17.00		30.50		418,200		750,300
Interim dividend for the year ended 31st December, 2009	8.50		16.00		209,100		393,600
Capital
Final dividend for the year ended 31st December, 2008	1.6500		2.3000		27,060		37,720
Supp cap dividend for the year ended 31st December, 2009	68.6829		68.6829		1,126,400		1,126,400
					1,780,760		2,308,020
Dividends on non-equity shares:
Cumulative preference	5.5%		5.5%		11,000		11,000

The Articles provide for a supplementary Dividend to Capital Shareholders to be paid not only in respect of future potential Preference Share issues which are not made, but also the 20,480,000 Preference Shares which could have been issued following the increases in the Capital Reserve revealed by the accounts since 1981.

	2009		2008		2009		2008
	p		p		£		£
Income
Proposed final dividend for the year ended 31st December, 2009	17.00		17.00		418,200		418,200
Capital
Proposed final dividend for the year ended 31st December, 2009	1.2750		1.6500		20,910		27,060

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

NOTES TO THE ACCOUNTS continued

for the year ended 31st December, 2009

3. DIVIDENDS AND OTHER APPROPRIATIONS (continued)

We also set out below the total dividend payable in respect of the financial year, which is the basis on which the requirements of Section 842 Income and Corporation Taxes Act 1988 are considered.

		2009		2008		2009		2008
		p		p		£		£
Dividends on equity shares
Income
Interim dividend for the year ended 31st December, 2009		8.50		16.00		209,100		393,600
Proposed final dividend for the year ended 31st December, 2009		17.00		17.00		418,200		418,200
		25.50		33.00
Capital
Supp cap dividend for the year ended 31st December, 2009		68.6829		68.6829		1,126,400		1,126,400
Proposed final dividend for the year ended 31st December, 2009		1.2750		1.6500		20,910		27,060
		69.9579		70.3329		1,774,610		1,965,260

 

END

 

 

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