Interim Results
Glasgow Income Trust PLC
01 May 2003
News Release
1 May 2003
Glasgow Income Trust plc
Interim Results for the six months to 31 March 2003
The principal objective of Glasgow Income Trust plc, with total assets of
£30.75m, is to provide shareholders with a high level of income and to obtain
growth in both income and capital over the longer term.
31 March 2003 30 September 2002
Total assets less current liabilities £30.75m £31.66m
Shareholders' funds £17.82m £19.14m
Net asset value per share 48.14p 51.70p
Share price 50.00p 57.25p
Premium (share price to net asset value) 3.9% 10.7%
Dividends per share 2.06p 2.06p*
* Half year to 31 March 2002.
•Total return on net assets was -2.9%, slightly lower than the return of
-1.9% on the FTSE All-Share Index, the Company's benchmark.
•A second interim dividend of 1.03p has been declared. Dividends declared
to date total 2.06p, the same level as paid last year.
•The Company offers a high yield to its shareholders - it was 9.7% at 31
March 2003 - while retaining its conventional structure with a single class
of share capital. It does not invest in split capital trusts.
•The share price continues to trade at a premium to net asset value. It
was 3.9% at 31 March 2003.
•Equity gearing has reduced to 4.4% at 31 March 2003 from 20% of net
assets at 30 September 2002.
•Ordinary share prices, which are lowly rated on historical comparisons,
should rise when investors allow a longer term perspective to replace
short-term concerns.
For further information please contact:
David Williams, Managing Director
Glasgow Investment Managers
0141 572 2700
Glasgow Income Trust plc
Interim Report as at 31 March 2003
Chairman's Statement
Background
The half year to 31 March 2003 witnessed extreme volatility in the world's
stockmarkets as concern grew that declines in investor, business and consumer
confidence in response to the growing prospect of war in Iraq would undermine
the economic recovery forecast to develop this year and next. The small negative
return, -1.9%, on the Company's benchmark, the FTSE All-Share Index, masked
major moves in equity prices during the period. The Index rose by 11.2% in
October and November 2002 only to fall by 14.0% in January and February 2003.
Investment Returns
Against this turbulent background the total return on net assets was -2.9%. The
return on the portfolio of ordinary shares was -1.9%, in line with benchmark,
and on fixed income securities 4.1%. Although the geared exposure to equities
was reduced during the period, it depressed the overall result.
The total return to a shareholder, at -9.1%, was lower than the return on net
assets, reflecting a fall in the premium at which the share price stands to net
asset value per share, from 10.7% at 30 September 2002 to 3.9% at 31 March 2003.
Dividends
The Board has declared a second interim dividend of 1.03p per share, to be paid
on 29 August 2003 to shareholders on the register at close of business on 1
August 2003. A first interim dividend of 1.03p has been declared for payment on
30 May 2003. Dividends declared to date in 2003 thus total 2.06p per share, the
same level as paid last year.
Portfolio Profile and Gearing
Net sales of £3.6 million of ordinary share investments helped reduce equity
gearing from 20.0% of net assets at 30 September 2002 to 4.4% at 31 March 2003.
Over the same period total gearing fell from 81.8% to 61.9%. The latter figure
includes 57.5% in corporate fixed interest and convertible securities of
relatively low volatility which contribute a large proportion of the income
which the company distributes.
Outlook
Although consensus forecasts have consistently indicated that aggregate output
will grow progressively faster in 2003 and 2004, stockmarket sentiment has been
dominated by worries about the impact of military action in Iraq. With that
conflict now effectively at an end, recent OECD forecasts suggest that lower oil
prices, the stimulus provided by growing public sector expenditure and
continuing low interest rates will begin to encourage a general recovery in
confidence and business activity. Ordinary share prices, which are lowly rated
on historical comparisons, should rise when investors allow a longer term
perspective to replace short-term concerns.
The Interim Report will be mailed to shareholders on 8 May 2003. Copies may be
obtained from the Mangers, Glasgow Investment Managers Limited, Sutherland
House, 149 St Vincent Street, Glasgow G2 5DR after that date.
R G Hanna
Chairman
Consolidated Statement of Total Return
(incorporating the Revenue Account)
for the half year ended 31 March 2003
Half year to 31 March 2003
(unaudited)
Revenue Capital Total
£000 £000 £000
(Losses)/Gains on investments - (1,148) (1,148)
Dividends and interest receivable 887 - 887
Underwriting commission - - -
Profits less losses of dealing (9) - (9)
subsidiary
Traded option premiums 27 - 27
Investment management fee (43) (43) (86)
Other administrative expenses (100) - (100)
---------- ------------ -----------
Net return before finance
costs and taxation 762 (1,191) (429)
Finance costs of borrowings (17) (17) (34)
---------- ------------ -----------
Return on ordinary activities
before taxation 745 (1,208) (463)
Taxation (107) 15 (92)
---------- ------------ -----------
Return on ordinary activities
after taxation for the period 638 (1,193) (555)
Dividends on equity shares (763) - (763)
---------- ------------ -----------
Transfer (from)/to reserves (125) (1,193) (1,318)
---------- ------------ -----------
Return per share 1.72p (3.22)p (1.50)p
Dividends per share 2.06p
Consolidated Statement of Total Return
(continued)
Half year to 31 March 2002 Year to 30 September 2002
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
£000 £000 £000 £000 £000 £000
(Losses)/Gains on - 4,464 4,464 - (5,694) (5,694)
investments
Dividends and 869 - 869 1,967 - 1,967
interest
receivable
Underwriting - - - 3 - 3
commission
Profits less
losses of
dealing
subsidiary 15 - 15 (29) - (29)
Traded option - - - 297 - 297
premiums
Investment (52) (52) (104) (108) (108) (216)
management fee
Other (70) - (70) (170) - (170)
administrative -------- ------- ------ -------- ------- -------
expenses
Net return before
finance
costs and 762 4,412 5,174 1,960 (5,802) (3,842)
taxation
Finance costs of (21) (21) (42) (71) (71) (142)
borrowings -------- ------- ------ -------- ------- -------
Return on
ordinary
activities
before taxation 741 4,391 5,132 1,889 (5,873) (3,984)
Taxation (102) 49 (53) (207) 104 (103)
-------- ------- ------ -------- ------- -------
Return on
ordinary
activities
after taxation 639 4,440 5,079 1,682 (5,769) (4,087)
for the period
Dividends on (744) - (744) (1,777) - (1,777)
equity shares -------- ------- ------ -------- ------- -------
Transfer (from)/ (105) 4,440 4,335 (95) (5,769) (5,864)
to reserves -------- ------- ------ -------- ------- -------
Return per 1.95p 13.52p 15.47p 4.92p (16.88)p (11.96)p
share
Dividends per 2.06p 4.85p
share
Note: These are not statutory accounts under section 240 of the Companies Act
1985 and are unaudited. The information relating to the group balance sheet as
at 30 September 2002 is an extract from the latest audited accounts which have
been delivered to the Registrar of Companies; the report of the auditors on
these accounts was unqualified and did not contain a statement under section 237
(2) or (3) of the Companies Act 1985.
Group Balance Sheet
as at 31 March 2003
31 March 2003 31 March 2002 30 September 2002
(unaudited) (unaudited) (audited)
£000 £000 £000
Fixed assets
Listed investments
Ordinary shares 18,612 31,502 22,964
Convertibles 1,419 2,358 2,043
Corporate bonds 8,814 9,551 9,786
----------- ----------- --------------
28,845 43,411 34,793
Current assets
Debtors 454 799 1,949
Investments of dealing
subsidiary
undertaking 119 - 128
Cash at bank and in hand 2,383 150 -
----------- ----------- --------------
2,956 949 2,077
----------- ----------- --------------
Creditors: amounts falling due
within one year (1,052) (4,681) (5,208)
----------- ----------- --------------
Net current liabilities 1,904 (3,732) (3,131)
----------- ----------- --------------
Total assets less current 30,749 39,679 31,662
liabilities
Creditors: amounts falling due
after more than one year
Zero coupon finance (12,930) (11,766) (12,525)
----------- ----------- --------------
Net assets 17,819 27,913 19,137
----------- ----------- --------------
Capital and reserves
Called up share capital 9,254 8,641 9,254
Share premium account 4,837 4,027 4,837
Special reserve 5,000 5,000 5,000
Realised capital reserve 4,300 7,348 6,604
Unrealised capital reserve (6,362) 1,992 (7,473)
Revenue reserve 790 905 915
----------- ----------- --------------
Equity shareholders' funds 17,819 27,913 19,137
----------- ----------- --------------
Net asset value per share 48.14p 80.75p 51.70p
Consolidated Cash Flow Statement
for the half year ended 31 March 2003
Half year to Half year to Year to
31 March 2003 31 March 2002 30 September 2002
(unaudited) (unaudited) (audited)
£000 £000 £000
Net cash inflow from operating 770 608 1,727
activities
Servicing of finance
Interest paid (62) (37) (121)
Investing activities
---------- --------- ----------
Purchases of investments (2,392) (11,619) (19,045)
Sales of investments 7,596 9,481 16,100
---------- --------- ----------
5,204 (2,138) (2,945)
Equity dividends paid (1,033) (914) (1,626)
---------- --------- ----------
Net cash inflow/(outflow)
before financing 4,879 (2,481) (2,965)
Financing
---------- --------- ----------
Issues of shares (see note) 1,427 1,500 1,496
Debt due within one year
---------- --------- ----------
- (decrease)/increase in
short-term
borrowings (3,000) 2,000 2,000
---------- --------- ----------
(1,573) 3,500 3,496
---------- --------- ----------
Increase in cash 3,306 1,019 531
---------- --------- ----------
Note: There were no share issues during the period. The £1,427,000 shown as
proceeds of share issues during the period relates to an issue made on 26
September 2002, the proceeds of which were not received until 2 October 2002.
Analysis of Changes in Net Debt
At Cash Other At
30 September flows non- cash 31 March
2002 changes 2003
£000 £000 £000 £000
Cash at bank and in hand - 2,383 - 2,383
Bank overdrafts (923) 923 - -
Short-term borrowings (3,000) 3,000 - -
Zero coupon finance (12,525) - (405) (12,930)
---------- --------- --------- ---------
(16,448) 6,306 (405) (10,547)
---------- --------- --------- ---------
Distribution of Assets
Valuation at Valuation at
30 September 2002 Purchases Sales Appreciation 31 March 2003
(audited) (unaudited)
£000 % £000 £000 £000 £000 %
Listed
investments
Ordinary 22,964 120.0 867 (4,467) (752) 18,612 104.4
shares
Convertibles 2,043 10.7 - (555) (69) 1,419 8.0
Corporate 9,786 51.1 1,525 (2,574) 77 8,814 49.5
bonds ------- ------- -------- ------- --------- ------- ------
34,793 181.8 2,392 (7,596) (744) 28,845 161.9
-------- ------- ---------
Net current
(liabilities)/
assets (3,131) (16.4) 1,904 10.7
Total assets
less current
liabilities 31,662 165.4 30,749 172.6
Zero coupon
finance (12,525) (65.4) (12,930) (72.6)
------- ------- ------- ------
Net assets 19,137 100.0 17,819 100.0
------- ------- ------- ------
Net asset
value per
share 51.70p 48.14p
This information is provided by RNS
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