Half Yearly Report

RNS Number : 6505W

Rights and Issues Inv Trust PLC

31 July 2009

 



HALF YEARLY MANAGEMENT REPORT
for the six months ended 30th June 2009

CHAIRMAN'S STATEMENT

The modest fall of 1.7% in the UK equity market as measured by the FT All-Share Index disguises a substantial fall in the earlier months followed by a major recovery in May. The world recession and the likelihood of any subsequent recovery continue to dominate investor sentiment.

The better background in small company markets has allowed the net asset value of the capital shares to recover by 6.5% to 1749.8p.

Dividends have continued to be impacted by companies' need to protect cash and the income received by the Trust in the first six months has been disappointing. In the light of this, the interim dividend has been reduced to 8.5p per income share.

The dramatic falls in economic activity in the major developed economies appears now to have ended but the prospects for any upturn remain uncertain.

Simon Knott

Chairman

July 2009

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 half yearly 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.

There are a number of potential risks and uncertainties which could have a material impact on Trust's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. Recent volatility in the stock market and in financial markets has added to uncertainty. The Trust's results continue to be exposed to the risk of market price. Further information on the principal long-term risks and uncertainties of the Trust is included in the latest annual report.

CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30th June 2009

		Six months ended 30th June 2009
		Revenue		Capital		Total
		£		£		£
Investment income		556,075		-		556,075
Other operating income		113,312		-		113,312
Total income		669,387		-		669,387
Gains/(Losses) on fair value
through profit or loss assets		(19,394)		2,370,843		2,351,449
		649,993		2,370,843		3,020,836
Expenses
Investment management fee		-		-		-
Other expenses		240,569		-		240,569
		240,569		-		240,569
Profit before tax		409,424		2,370,843		2,780,267
Tax		-		-		-
Profit for the period		409,424		2,370,843		2,780,267
Earnings per share
Return per income share (p)		(6.3)p		24.1p		17.8p
Return per capital share (p)		34.0p		108.4p		142.4p

The interim dividend of 8.5p net (2008: 16.0p net) per income share and amounting to £209,100 (2008: £393,600) is payable on 30th September 2009 to shareholders on the register as at 28th August 2009. The sum accruing by way of dividend to the Capital shareholders will, in view of the small sum involved be included in the final dividend.

		Six months ended 30th June 2008						Year ended 31st December 2008
		Revenue		Capital		Total		Revenue		Capital		Total
		£		£		£		£		£		£
Investment income		1,114,231		-		1,114,231		2,190,628		-		2,190,628
Other operating income		358,772		-		358,772		601,994		-		601,994
Total income		1,473,003		-		1,473,003		2,792,622		-		2,792,622
Gains/(Losses) on fair value
through profit or loss assets		(108,494)		(9,065,365)		(9,173,859)		(316,824)		(37,130,786)		(37,447,610)
		1,364,509		(9,065,365)		(7,700,856)		2,475,798		(37,130,786)		(34,654,988)
Expenses
Investment management fee		-		-		-		-		-		-
Other expenses		266,601		-		266,601		540,400		-		540,400
		266,601		-		266,601		540,400		-		540,000
Profit before tax		1,097,908		(9,065,365)		(7,967,457)		1,935,398		(37,130,786)		(35,195,388)
Tax		-		-		-		1,561		-		1,561
Profit for the period		1,097,908		(9,065,365)		(7,967,457)		1,936,959		(37,130,786)		(35,193,827)
Earnings per share
Return per income share (p)		20.8p		(92.1)p		(71.3)p		31.5p		(377.4)p		(345.9)p
Return per capital share (p)		35.4p		(414.6)p		(379.2)p		70.3p		(1698.1)p		(1627.8)p

These are not full statutory accounts in terms of Section 240 of the Companies Act 1985. The full audited

accounts for the year to 31st December 2008, have been filed with the Registrar of Companies.

The auditors' report on those accounts was not qualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985.

CONSOLIDATED BALANCE SHEET
as at 30th June 2009

		30th June		30th June		31st December
		2009		2008		2008
		£		£		£
Non-current assets
Goodwill		65,191		65,191		65,191
Investments - Fair value through profit or loss		37,432,888		62,848,563		34,982,276
		37,498,079		62,913,754		35,047,467
Current Assets
Trading investments		318,650		550,217		419,606
Trade and other receivables		262,149		534,826		211,553
Amounts due from group undertakings		-		-		-
Cash and cash equivalents		2,876,077		3,680,281		3,031,234
		3,456,876		4,765,324		3,662,393
Total Assets		40,954,955		67,679,078		38,709,860
Current Liabilities
Trade and other payables		746,553		961,499		267,765
Current tax payable		-		86,813		-
		746,553		1,048,312		267,765
Total assets less current liabilities		40,208,402		66,630,766		38,442,095
Net Assets		40,208,402		66,630,766		38,442,095
Equity
Called up share capital		1,225,000		1,225,000		1,225,000
Share premium account		225,326		225,326		225,326
Retained reserves:
Capital reserve		40,751,585		40,682,762		40,751,585
Revaluation reserve		(3,313,095)		22,450,307		(5,683,938)
Dividend equalisation reserve		1,319,586		2,047,371		1,924,122
Total equity		40,208,402		66,630,766		38,442,095
Net asset value per share
Income shares		459.9p		749.6p		459.0p
Capital shares		1749.8p		2926.3p		1643.3p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30th June 2009

				Share						Dividend
		Share		premium		Capital		Revaluation		equalisation
		capital		account		reserve		reserve		reserve		Total
		£		£		£		£		£		£
For the six months ended June 2008
Balance at
31st December 2007		1,225,000		225,326		40,668,355		31,530,078		2,306,183		75,954,942
Profit for the period		-		-		14,407		(9,079,771)		1,097,908		(7,967,456)
Total recognised income and expense		1,225,000		225,326		40,682,762		22,450,307		3,404,091		67,987,486
Dividends		-		-		-		-		(1,356,720)		(1,356,720)
Balance at 30th June 2008		1,225,000		225,326		40,682,762		22,450,307		2,047,371		66,630,766

				Share						Dividend
		Share		premium		Capital		Revaluation		equalisation
		capital		account		reserve		reserve		reserve		Total
		£		£		£		£		£		£
For the six months ended June 2009
Balance at
31st December 2008		1,225,000		225,326		40,751,585		(5,683,938)		(1,924,122)		38,442,095
Profit for the period		-		-		-		2,370,843		409,424		2,780,267
Total recognised income and expense		1,225,000		225,326		40,751,585		(3,313,095)		2,333,546		41,222,362
Dividends		-		-		-		-		(1,013,960)		(1,013,960)
Balance at 30th June 2009		1,225,000		225,326		40,751,585		(3,313,095)		1,319,586		40,208,402

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30th June 2009

		Group		Group
		2009		2008
		£		£
Cashflows from operating activities
Profit before tax		2,780,267		(7,967,457)
Adjustments for:
(Gains)/losses on investments		(2,370,843)		9,079,771
Purchase of investments		(79,769)		-
Proceeds of investments		-		-
Movement in trading investments		100,956		69,580
Operating cash flows before movements in working capital		430,611		1,181,894
Decrease/(increase) in receivables		(50,596)		(221,746)
Increase/(decrease) in payables		(89,912)		(184,131)
Net cash from operating activities before income taxes		290,103		776,017
Income taxes paid		-		-
Net cash from operating activities		290,103		776,017
Cash flows from financing activities
Dividends paid		(445,260)		(788,020)
Net cash (used in)/from financing activities		(445,260)		(788,020)
Net increase/(decrease) in cash and cash equivalents		(155,157)		(12,003)
Cash and cash equivalents at beginning of year		3,031,234		3,692,284
Cash and cash equivalents at end of period		2,876,077		3,680,281

NOTES TO THE CONDENSED HALF YEARLY FINANCIAL REPORT
for the six months ended 30th June 2009

1. Accounting Standards

The condensed interim financial report has been prepared in accordance with International Financial Reporting Standard (IFRSs), including IAS 34 'Interim financial reporting'. The same accounting policies and methods of computation are followed in the interim financial report as those used in the Company's latest published annual financial statements.

2. Dividends

		2009		2008
Amounts recognised as distributions to equity holders in the period:
Income (Paid)
Final dividend for the year ended 31st December 2008
of 17.0p (2007: 30.5p) per share		418,200		750,300
Capital (Paid)
Final dividend for the year ended 31st December 2008
of 1.6500p (2007: 2.3000p) per share		27,060		37,300
Capital Supplementary (Accrued)
Payable 2nd January 2010 of 68.6829p (2009: 68.6829p) per share		563,200		563,200
Dividends on non-equity shares:
Cumulative preference 5.5% (Accrued)		5,500		5,500
		1,013,960		1,356,300
Income
Proposed interim dividend for the year ended
31st December 2009 of 8.5p (2008: 16.0p) per share		209,100		393,600

This was approved by the Board on 31st July 2009 and has not been included as a liability at 30th June 2009.

3. Income

		2009		2008
Total income comprises:
Dividends		556,075		1,114,231
Interest		3,784		80,446
Other income		109,528		278,326
		669,387		1,473,003

4. Related Party Transactions

Transactions between the company and its subsidiaries, which are related parties have been eliminated on consolidation.

The Company's subsidiary company Discretionary Unit Fund Managers Limited manages the Discretionary Unit Fund and acts as principal in respect of all transactions of units in the Fund. In respect of this its fee for the six months amounted to £109,528 (2008: £278,326) and the amount owed by the Fund at the period end was £2,846 (2008: £5,578).

DIRECTORS' STATEMENT OF RESPONSIBILITY FOR THE HALF YEARLY REPORT

The Directors confirm that to the best of their knowledge:

•	the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim financial reporting'; and

•	the half yearly management report includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.

S. H. J. A. Knott

Chairman

July 2009

APPENDIX

TOP TEN HOLDINGS

Holding		Investment	Value £
2,700,000		RPS Group	5,406,750
1,673,038		Hill & Smith Holdings	3,847,987
1,500,000		Celsis Int'l	2,685,000
500,000		Thorpe F.W.	2,630,000
2,100,000		Colefax Group	1,995,000
12,500,000		Intelek	1,687,500
300,000		Aggreko	1,555,500
1,000,000		VP	1,480,000
10,425,000		Scapa Group	1,459,500
500,000		Domino Printing Sciences	1,261,250

INDEPENDENT REVIEW REPORT TO
RIGHTS AND ISSUES INVESTMENT TRUST PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 which comprises the condensed consolidated income statement, balance sheet, statement of changes in equity, cash flow statement and the related explanatory notes 1 to 4. We have read the other information contained in the half yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

The report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. 

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union. 

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. 

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than in an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all

significant matters that might be identified in an audit. Accordingly we do not express an audit opinion. 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Begbies Chettle Agar	25 City Road
Chartered Accountants	London EC1Y 1AR

July 2009

 

END

 

 

IR IIFSADRILVIA