Final Results
Value & Income Trust plc
22 May 2006
VALUE AND INCOME TRUST PLC
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 MARCH 2006
SUMMARY
31 March 2006 31 March 2005
(restated)
Net asset value per share valuing debt at par 260.6p 213.7p
Net asset value per share valuing debt at market value 226.9p 188.7p
Ordinary share price 227.0p 181.0p
Total interim dividend and proposed final dividend per share 6.4p 6.2p
Total assets less current liabilities £156.8 million £134.4 million
THE YEAR
• VIT's share price total return for the year was +29.5% compared with
the FTSE All-Share Index total return of +27.5%
• VIT's share price total return over the last three years was +123.1%
compared with the FTSE All-Share Index total return of +93.8%
• Net dividend for the year is 6.4p, up 3.2% - the nineteenth
consecutive year of increase
Value and Income Trust invests in higher yielding, less fashionable areas of the
UK commercial property and equity markets, particularly in medium and smaller
sized companies. It aims for long-term real growth in dividends and capital
values without undue risk.
Outlook
Despite the rise in property and equity markets, the outlook for real rents and
dividend growth remains encouraging and Value and Income Trust is fully
invested.
Dividend
The Directors are recommending a final dividend of 3.3p per Ordinary Share to be
paid on
13 July 2006 to shareholders registered on 23 June 2006. The ex-dividend date
is 21 June 2006.
The Annual Report will be posted to shareholders at the end of May 2006. Copies
can be obtained from Edinburgh Fund Managers plc, Donaldson House, 97 Haymarket
Terrace, Edinburgh, EH12 5HD or OLIM Limited, Pollen House, 10-12 Cork Street,
London, W1S 3NP.
For further information, please contact:-
Matthew Oakeshott or Angela Lascelles of OLIM Limited
Tel: 0207-439-4400
VALUE AND INCOME TRUST PLC
GROUP INCOME STATEMENT
for the year ended 31 March 2006
Year ended Year ended
31 March 2006 31 March 2005
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Restated) (Restated) (Restated)
Investment income
Dividend income 3,577 - 3,577 3,388 - 3,388
Interest receivable from listed - - - 421 - 421
investments
________ ________ ________ ________ ________ ________
3,577 - 3,577 3,809 - 3,809
________ ________ ________ ________ ________ ________
Rental income 3,259 - - 3,116 - 3,116
Interest receivable on short 154 - - 133 - 133
term deposits
Underwriting income - - - 1 - 1
________ ________ ________ ________ ________ ________
Other operating income 3,413 - 3,413 3,250 - 3,250
________ ________ ________ ________ ________ ________
Total income 6,990 - 6,990 7,059 - 7,059
Gains and losses on investments
Realised gains on - 8,237 8,237 - 1,741 1,741
held-at-fair-value investments
Unrealised gains on investments - 15,435 15,435 - 18,859 18,859
________ ________ ________ ________ ________ ________
Total revenue 6,990 23,672 30,662 7,059 20,600 27,659
________ ________ ________ ________ ________ ________
Expenses
Investment management fees (335) (1,156) (1,491) (268) (1,084) (1,352)
Other operating expenses (367) - (367) (364) - (364)
Finance costs (3,501) - (3,501) (3,501) - (3,501)
________ ________ ________ ________ ________ ________
Total expenses (4,203) (1,156) (5,359) (4,133) (1,084) (5,217)
________ ________ ________ ________ ________ ________
Profit before tax 2,787 22,516 25,303 2,926 19,516 22,442
Taxation - (1,075) (1,075) - (724) (724)
________ ________ ________ ________ ________ ________
Profit for the period 2,787 21,441 24,228 2,926 18,792 21,718
________ ________ ________ ________ ________ ________
Earnings per ordinary share 6.12 47.07 53.19 6.42 41.26 47.68
(pence)
VALUE AND INCOME TRUST PLC
COMPANY INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2006
Year ended Year ended
31 March 2006 31 March 2005
Revenue Capital Total
Revenue Capital Total
£'000 £'000 £'000
£'000 £'000 £'000
(Restated) (Restated) (Restated)
Investment income
Dividend income 3,590 - 3,590 3,388 - 3,388
Interest receivable from listed - - - 421 - 421
investments
________ ________ _______ ________ ________ ________
3,590 - 3,590 3,809 - 3,809
________ ________ _______ ________ ________ ________
Rental income 1,163 - 1,163 1,065 - 1,065
Interest receivable on short term 120 - 120 95 - 95
deposits
________ ________ _______ ________ ________ ________
Other operating income 1,283 - 1,283 1,160 - 1,160
________ ________ _______ ________ ________ ________
Total income 4,873 - 4,873 4,969 - 4,969
Gains and losses on investments
Realised gains on held-at-fair-value - 8,237 8,237 - 1,741 1,741
investments
Unrealised gains/(losses) on - 14,385 14,385 - 18,163 18,163
investments
________ ________ _______ ________ ________ ________
Total revenue 4,873 22,622 27,495 4,969 19,904 24,873
________ ________ _______ ________ ________ ________
Expenses
Investment management fees (235) (923) (1,158) (187) (895) (1,082)
Other operating expenses (267) - (267) (229) - (229)
Finance costs (1,851) - (1,851) (1,851) - (1,851)
________ ________ _______ ________ ________ ________
Total expenses (2,353) (923) (3,276) (2,267) (895) (3,162)
________ ________ _______ ________ ________ ________
Profit before tax 2,520 21,699 24,219 2,702 19,009 21,711
Taxation 9 - 9 7 - 7
________ ________ _______ ________ ________ ________
Profit for the period 2,529 21,699 24,228 2,709 19,009 21,718
________ ________ _______ ________ ________ ________
Earnings per ordinary share 5.55 47.64 53.19 5.95 41.73 47.68
VALUE AND INCOME TRUST PLC
BALANCE SHEET
AT 31 MARCH 2006
GROUP COMPANY
As at As at As at As at
31 March 2006 31 March 2005 31 March 2006 31 March 2005
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
ASSETS (Restated) (Restated) (Restated) (Restated)
Non current assets
Investments held at fair 103,750 85,758 121,776 100,534
value through profit or loss
Investment properties held 52,250 45,875 17,525 15,450
at fair value through profit
or loss
_______ _______ _____ _______
156,000 131,633 139,301 115,984
Current assets
Cash and cash equivalents 2,105 3,133 1,506 2,913
Other receivables 540 1,092 535 992
_______ _______ _____ _______
2,645 4,225 2,041 3,905
_______ _______ _____ _______
TOTAL ASSETS 158,645 135,858 141,342 119,889
Current liabilities
Other payables (1,827) (1,449) (2,165) (2,046)
_______ _______ _____ _______
156,818 134,409 139,177 117,843
Non-current liabilities
Debenture stock (35,491) (35,515) (20,491) (20,515)
Deferred tax (2,641) (1,566) - -
_______ _______ _____ _______
(38,132) (37,081) (20,491) (20,515)
_______ _______ _____ _______
118,686 97,328 118,686 97,328
_______ _______ _____ _______
EQUITY
Ordinary share capital 4,555 4,555 4,555 4,555
Share premium 18,446 18,446 18,446 18,446
Retained Earnings 95,685 74,327 95,685 74,327
_______ _______ _____ _______
118,686 97,328 118,686 97,328
_______ _______ _____ _______
Net Asset Value per ordinary 260.56 213.67 260.56 213.67
share (pence)
VALUE AND INCOME TRUST PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR
Group Year ended 31 March 2006 Year ended 31 March 2005
Share Share Retained Total Share Share Retained Total
capital premium earnings capital premium earnings
£000 £000 £000 £000 £000 £000 £000 £000
Net assets at 31 March 4,555 18,446 74,327 97,328 4,555 18,446 55,342 78,343
2005
Net profit for the year - - 24,228 24,228 - - 21,718 21,718
Dividends paid - - (2,870) (2,870) - - (2,733) (2,733)
_________ ________ ________ ________ _________ ________ ________ ________
Net assets at 31 March 4,555 18,446 95,685 118,686 4,555 18,446 74,327 97,328
2006
_________ ________ ________ ________ _________ ________ ________ ________
Company
Year ended 31 March 2006 Year ended 31 March 2005
Share Share Retained Total Share Share Retained Total
capital premium earnings capital premium earnings
£000 £000 £000 £000 £000 £000 £000 £000
Net assets at 31 March 4,555 18,446 74,327 97,328 4,555 18,446 55,342 78,343
2005
Net profit for the year - - 24,228 24,228 - - 21,718 21,718
Dividends paid - - (2,870) (2,870) - - (2,733) (2,733)
_________ ________ ________ ________ _________ ________ ________ ________
Net assets at 31 March 4,555 18,446 95,685 118,686 4,555 18,446 74,327 97,328
2006
_________ ________ ________ ________ _________ ________ ________ ________
VALUE AND INCOME TRUST PLC
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2006 2006 2005
£000 £000 £000 £000
Cash flows from operating activities
Dividend income received 4,008 4,001
Rental received 3,788 2,677
Interest received 161 124
Other income 1
Operating expenses paid (1,839) (1,725)
________ ________
NET CASH FROM OPERATING ACTIVITIES 6,118 5,078
Cash flows from investing activities
Purchase of investments (22,490) (20,907)
Sale of investments 21,739 21,307
________ ________
NET CASH (OUTFLOW)/INFLOW FROM
INVESTING ACTIVITIES (751) 400
Cash flow from financing activities
Interest paid (3,525) (3,525)
Dividends paid (2,870) (2,733)
________ ________
NET CASH FROM FINANCING ACTIVITIES (6,395) (6,258)
________ ________
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,028) (780)
Cash and cash equivalents at 1 April 2005 3,133 3,913
________ ________
Cash and cash equivalents at 31 March 2006 2,105 3,133
________ ________
VALUE AND INCOME TRUST PLC
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March 2006 2006 2005
£000 £000 £000 £000
Cash flows from operating activities
Dividend income received 4,020 4,001
Rental received 1,398 900
Interest received 125 90
Operating expenses paid (1,454) (1,051)
________ ________
NET CASH FROM OPERATING ACTIVITIES 4,089 3,940
Cash flows from investing activities
Purchase of investments (22,490) (18,657)
Sale of investments 21,739 21,307
NET CASH (OUTFLOW)/INFLOW FROM ________ ________
INVESTING ACTIVITIES (751) 2,650
Cash flow from financing activities
Interest paid (1,875) (1,875)
Dividends paid (2,870) (2,733)
________ ________
NET CASH FROM FINANCING ACTIVITIES (4,745) (4,608)
________ ________
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,407) 1,982
Cash and cash equivalents at 1 April 2005 2,913 931
________ ________
Cash and cash equivalents at 31 March 2006 1,506 2,913
________ ________
NOTES TO FINANCIAL STATEMENTS:
1 Accounting policies
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) which comprise standards and
interpretations approved by the International Accounting Standards Board (IASB)
together with interpretations of the International Accounting Standards and
Standing Interpretations Committee approved by the International Accounting
Standards Committee (IASC) that remain in effect, and to the extent that they
have been adopted by the European Union.
These are the first financial statements prepared in accordance with
IFRS. 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 to 31 March 2006 the Directors have amended certain accounting and
valuation methods applied in the UK GAAP financial statements to comply with
IFRS.
The disclosures required by IFRS 1 First-time Adoption of International
Financial Reporting Standards (IFRS 1) concerning the transition from UK GAAP to
IFRS are given in the full Report and Financial Statements.
(a) Basis of preparation
The financial statements have been prepared on the historical cost basis, except
for the revaluation of certain financial assets. The principal accounting
policies adopted are set out below. Where presentational guidance set out in the
Statement of Recommended Practice (SORP) for investment trusts issued by the
Association of Investment Trust Companies (AITC) in January 2003 (and revised in
December 2005) is consistent with the requirements of IFRS, the directors have
sought to prepare the financial statements on a basis compliant with the
recommendations of the SORP.
(b) Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the company and entities controlled by the company (its subsidiaries). Control
is achieved where the company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its
activities. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Audax Properties plc and VIT Securities Limited, both wholly owned subsidiaries
of the Company, charge expenses wholly to income. On consolidation, however, an
adjustment is made to charge 70% of the investment management fee paid by Audax
Properties plc to capital. The allocation has no effect on the total return of
the Company or the Group.
(c) Presentation of income statement
In order to reflect better the activities of an investment trust company and in
accordance with guidance issued by the AITC, supplementary information which
analyses the income statement between items of a revenue and capital nature has
been presented alongside the income statement. In accordance with the company's
status as a UK investment company under section 266 of the Companies Act 1985,
net capital returns may not be distributed by way of dividend. Additionally the
net revenue is the measure that the directors believe to be appropriate in
assessing the company's compliance with certain requirements set out in section
842 of the Income and Corporation Taxes Act 1988.
(d) Income
Dividend income from investments is recognised as revenue for the period on an
ex-dividend basis. Where no ex-dividend date is available, dividends receivable
on or before the period end are treated as revenue for the period.
Where the group has elected to receive dividend income in the form of additional
shares rather than cash, the amount of cash dividend foregone is recognised as
income. Any excess in the value of shares received over the amount of cash
dividend foregone is recognised as a gain in the income statement.
Interest receivable from cash and short term deposits and interest payable is
accrued to the end of the period.
Rental and other income is recognised as earned.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are presented as
capital where a connection with the maintenance or enhancement of the value of
investments can be demonstrated. In this respect, the investment management fees
are allocated 30% to revenue and 70% to capital to reflect the Board's
expectations of long term investment returns.
Any performance fees payable are allocated to capital, reflecting the fact that,
although they are calculated on a total return basis, they are expected to be
attributable largely to capital performance.
It is normal practice for investment trust companies to allocate finance costs
to capital on the same basis as the investment management fee allocation.
However as the Company has a significant exposure to property, and property
companies do not charge finance costs to capital, the directors consider it
inappropriate to allocate finance costs to capital.
(f) Taxation
Deferred tax is recognised in respect of all temporary differences that
have originated but not reversed at the balance sheet date, where transactions
or events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the temporary differences can be deducted. Due to the Company's
status as an investment trust company, and the intention to continue to meet the
conditions required to obtain approval for the foreseeable future, the Company
has not provided deferred tax on any capital gains and losses arising on the
revaluation or disposal of investments.
This is not the case for the subsidiary companies, and hence the group, where
such provision is made, calculated at the tax rates that are expected to apply
in the period when the liability is settled or the asset is realised. Deferred
tax is charged or credited in the income statement, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is
also dealt with in equity.
(g) Dividends payable
Interim dividends are recognised as a liability in the period in which they are
paid as no further approval is required in respect of such dividends. Final
dividends are recognised as a liability only after they have been approved by
shareholders in general meeting.
(h) Investments
All investments have been designated upon initial recognition as fair value
through profit or loss.
Investments are recognised and derecognised on the trade date where a purchase
or sale is under a contract whose terms require delivery within the timeframe
established by the market concerned, and are initially measured at fair value.
Subsequent to initial recognition, investments are recognised at fair value
through profit or loss. For listed investments, this is deemed to be bid market
prices or closing prices for SETS stocks sourced from the London Stock Exchange.
SETS is the London Stock Exchange electronic trading service covering most of
the market including all FTSE 100 constituents and most liquid FTSE 250
constituents along with some other securities. Gains and losses arising from
changes in fair value are included in net profit or loss for the period as a
capital item in the income statement and are ultimately recognised in the
retained earnings.
In respect of investment properties, fair value is established by half-yearly
professional valuation on an open market basis by King Sturge and Co, Chartered
Surveyors and Valuers and in accordance with the RICS Appraisal and Valuation
Manual.
(i) Cash and cash equivalents
Cash and cash equivalents comprises deposits held with banks.
(j) Non - current liabilities
All loans and borrowings are initially recognised at cost, being the fair value
of the consideration received, less issue costs where applicable. After initial
recognition, all interest-bearing loans and borrowings are subsequently measured
at amortised cost. Amortised cost is calculated by taking into account any
discount or premium on settlement. The costs of arranging any interest-bearing
loans are capitalised and amortised over the life of the loan.
2. Restatement of opening balances
Information for the year to 31 March 2005 is extracted from the financial
statements for that year which were prepared under UK GAAP, have been filed with
the Registrar of Companies and which contain an unqualified audit report. The
historic information has been restated to conform to IFRS.
3. Proposed Final Dividend
The final dividend of 3.3 pence per share, subject to shareholder approval at
the Annual General Meeting, will be paid on 13 July 2006 to shareholders on the
register at the close of business on 23 June 2006. The ex-dividend date is 21
June 2006.
4. Statutory Financial Statements
The financial information contained within this preliminary announcement does
not constitute the Company's statutory financial statements as defined in
section 240 of the Companies Act 1985 for the years ended 31 March 2006 or 2005,
but is derived from those financial statements. Statutory financial statements
for 2005 have been delivered to the Registrar of Companies and those for 2006
will be delivered following the Company's Annual General Meeting which will be
held at Donaldson House, 97 Haymarket Terrace, Edinburgh on Friday 7 July 2006
at 12.30 pm. The auditors report in respect of the year ended 31 March 2005 was
unqualified and did not contain statements under s237(2) or (3) of the Companies
Act 1985. The auditors have not yet reported on the financial statements to 31
March 2006.The financial statements and preliminary announcement were approved
by the Board of directors on 22 May 2006.
5. Publication of Financial Statements
The financial statements will be posted to shareholders in June 2006 and copies
will be available from the Company Secretary and the Managers, OLIM Limited.
For Value and Income Trust plc
Edinburgh Fund Managers plc, Secretary
22 May 2006
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