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 This information is provided by RNS The company news service from the London Stock Exchange
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