Final Results
Value & Income Trust plc
22 May 2007
VALUE AND INCOME TRUST PLC
PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 MARCH 2007
SUMMARY
31 March 2007 31 March 2006
Net asset value per share valuing debt at par 299.0p 260.6p
Net asset value per share valuing debt at market value 271.1p 226.9p
Ordinary share price 253.0p 227.0p
Total interim dividend and proposed final dividend per share 6.7p 6.4p
Total assets less current liabilities £175.0 million £156.8 million
THE YEAR
• VIT's share price total return for the year was 14.7% compared with
the FTSE All-Share Index total return of 10.9%
• VIT's share price total return over the last three years was 95.1%
compared with the FTSE All-Share Index total return of 63.1%
• Total dividends for the year are 6.7p, up 4.7% - the twentieth
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 3.5p per Ordinary Share to be
paid on 12 July 2007 to shareholders registered on 22 June 2007. The
ex-dividend date is 20 June 2007.
The Annual Report will be posted to shareholders in June 2007. Copies may be
obtained from the Company Secretary, Edinburgh Fund Managers plc, Donaldson
House, 97 Haymarket Terrace, Edinburgh, EH12 5HD or the Manager, 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
Year ended Year ended
31 March 2007 31 March 2006
(Unaudited) (Audited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income
Dividend income 4,010 - 4,010 3,577 - 3,577
Rental income 3,196 - 3,196 3,259 - 3,259
Interest income on short-term deposits 174 - 174 154 - 154
Other operating income 3,370 - 3,370 3,413 - 3,413
Total income 7,380 - 7,380 6,990 - 6,990
Gains and losses on investments
Realised gains on held-at-fair-value - 9,073 9,073 - 8,237 8,237
investments
Unrealised gains on investments - 10,363 10,363 - 15,435 15,435
Total revenue 7,380 19,436 26,816 6,990 23,672 30,662
Expenses
Investment management fees (366) (1,361) (1,727) (335) (1,156) (1,491)
Other operating expenses (409) - (409) (367) - (367)
Finance costs (3,502) - (3,502) (3,501) - (3,501)
Total expenses (4,277) (1,361) (5,638) (4,203) (1,156) (5,359)
Profit before tax 3,103 18,075 21,178 2,787 22,516 25,303
Taxation - (713) (713) - (1,075) (1,075)
Profit for the period 3,103 17,362 20,465 2,787 21,441 24,228
Earnings per ordinary share (pence) 6.81 38.12 44.93 6.12 47.07 53.19
VALUE AND INCOME TRUST PLC
COMPANY INCOME STATEMENT
Year ended Year ended
31 March 2007 31 March 2006
(Unaudited) (Audited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income
Dividend income 4,010 - 4,010 3,590 - 3,590
Rental income 1,138 - 1,138 1,163 - 1,163
Interest income on short-term deposits 135 - 135 120 - 120
Other operating income 1,273 - 1,273 1,283 - 1,283
Total income 5,283 - 5,283 4,873 - 4,873
Gains and losses on investments
Realised gains on held-at-fair-value - 8,183 8,183 - 8,237 8,237
investments
Unrealised gains on investments - 10,477 10,477 - 14,385 14,385
Total revenue 5,283 18,660 23,943 4,873 22,622 27,495
Expenses
Investment management fees (257) (1,107) (1,364) (235) (923) (1,158)
Other operating expenses (262) - (262) (267) - (267)
Finance costs (1,852) - (1,852) (1,851) - (1,851)
Total expenses (2,371) (1,107) (3,478) (2,353) (923) (3,276)
Profit before tax 2,912 17,553 20,465 2,520 21,699 24,219
Taxation - - - 9 - 9
Profit for the period 2,912 17,553 20,465 2,529 21,699 24,228
Earnings per ordinary share (pence) 6.39 38.54 44.93 5.55 47.64 53.19
VALUE AND INCOME TRUST PLC
BALANCE SHEET
AT 31 MARCH 2007
GROUP COMPANY
As at As at As at As at
31 March 2007 31 March 2006 31 March 2007 31 March 2006
(Unaudited) (Audited) (Unaudited) (Audited)
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
ASSETS
Non current assets
Investments held at fair value 118,716 103,750 139,206 121,776
through profit or loss
Investment properties held at fair 54,525 52,250 18,800 17,525
value through profit or loss
173,241 156,000 158,006 139,301
Current assets
Cash and cash equivalents 2,266 2,105 1,780 1,506
Other receivables 1,556 540 1,543 535
3,822 2,645 3,323 2,041
TOTAL ASSETS 177,063 158,645 161,329 141,342
Current liabilities
Other payables (2,051) (1,827) (4,671) (2,165)
175,012 156,818 156,658 139,177
Non-current liabilities
Debenture stock (35,468) (35,491) (20,468) (20,491)
Deferred tax (3,354) (2,641) - -
(38,822) (38,132) (20,468) (20,491)
136,190 118,686 136,190 118,686
EQUITY
Ordinary share capital 4,555 4,555 4,555 4,555
Share premium 18,446 18,446 18,446 18,446
Retained Earnings 113,189 95,685 113,189 95,685
136,190 118,686 136,190 118,686
Net Asset Value per ordinary share 298.99 260.56 298.99 260.56
(pence)
VALUE AND INCOME TRUST PLC
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR
Group Year ended 31 March 2007 Year ended 31 March 2006
(Unaudited) (Audited)
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 4,555 18,446 95,685 118,686 4,555 18,446 74,327 97,328
March 2006
Net profit for the - - 20,465 20,465 - - 24,228 24,228
year
Dividends paid - - (2,961) (2,961) - - (2,870) (2,870)
Net assets at 31 4,555 18,446 113,189 136,190 4,555 18,446 95,685 118,686
March 2007
Company
Year ended 31 March 2007 Year ended 31 March 2006
(Unaudited) (Audited)
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 4,555 18,446 95,685 118,686 4,555 18,446 74,327 97,328
March 2006
Net profit for the - - 20,465 20,465 - - 24,228 24,228
year
Dividends paid - - (2,961) (2,961) - - (2,870) (2,870)
Net assets at 31 4,555 18,446 113,189 136,190 4,555 18,446 95,685 118,686
March 2007
VALUE AND INCOME TRUST PLC
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2007 2007 2006
(Unaudited) (Audited)
£000 £000 £000 £000
Cash flows from operating activities
Dividend income received 3,903 4,008
Rental received 3,117 3,788
Interest received 174 161
Operating expenses paid (2,020) (1,839)
NET CASH FROM OPERATING ACTIVITIES 5,174 6,118
Cash flows from investing activities
Purchase of investments (28,207) (22,490)
Sale of investments 29,680 21,739
NET CASH INFLOW/(OUTFLOW) FROM INVESTING 1,473 (751)
ACTIVITIES
Cash flow from financing activities
Interest paid (3,525) (3,525)
Dividends paid (2,961) (2,870)
NET CASH FROM FINANCING ACTIVITIES (6,486) (6,395)
NET INCREASE/ (DECREASE) IN CASH AND CASH 161 (1,028)
EQUIVALENTS
Cash and cash equivalents at 1 April 2006 2,105 3,133
Cash and cash equivalents at 31 March 2007 2,266 2,105
VALUE AND INCOME TRUST PLC
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 March 2007 2007 2006
(Unaudited) (Audited)
£000 £000 £000 £000
Cash flows from operating activities
Dividend income received 3,903 4,020
Rental received 1,176 1,398
Interest received 136 125
Operating expenses paid (1,496) (1,454)
NET CASH FROM OPERATING ACTIVITIES 3,719 4,089
Cash flows from investing activities
Purchase of investments (28,207) (22,490)
Sale of investments 27,439 21,739
Increase in loan to subsidiary 2,159 -
NET CASH INFLOW/(OUTFLOW) FROM INVESTING 1,391 (751)
ACTIVITIES
Cash flow from financing activities
Interest paid (1,875) (1,875)
Dividends paid (2,961) (2,870)
NET CASH FROM FINANCING ACTIVITIES (4,836) (4,745)
NET INCREASE/ (DECREASE) IN CASH AND CASH 274 (1,407)
EQUIVALENTS
Cash and cash equivalents at 1 April 2006 1,506 2,913
Cash and cash equivalents at 31 March 2007 1,780 1,506
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.
(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 Companies (AIC) 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.
The directors are of the opinion that the Group is engaged in a single
segment of business, being investment business.
(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. VIT Securities Limited was subsequently dissolved on
13 April 2007.
(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 AIC, 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 and Finance Costs
All expenses and finance costs 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.
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 the 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 the 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. Proposed Final Dividend
The final dividend of 3.5 pence per share, subject to shareholder approval at
the Annual General Meeting, will be paid on 12 July 2007 to shareholders on the
register at the close of business on 22 June 2007. The ex-dividend date is 20
June 2007.
3. 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 2007 or 2006,
but is derived from those financial statements. Statutory financial statements
for 2006 have been delivered to the Registrar of Companies and those for 2007
will be delivered following the Company's Annual General Meeting which will be
held at Donaldson House, 97 Haymarket Terrace, Edinburgh on Friday 6 July 2007
at 12.30pm. The auditors report in respect of the year ended 31 March 2006 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 2007.
The financial statements and preliminary announcement were approved by the Board
of directors on 22 May 2007.
4. Publication of Financial Statements
The financial statements will be posted to shareholders in June 2007 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 2007
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