Interim Results
Value & Income Trust plc
30 October 2007
VALUE AND INCOME TRUST PLC
UNAUDITED HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
SUMMARY
Six months ended Six months ended Year ended
30 September 2007 30 September 2006 31 March 2007
Net Asset Value per Share 261.9p 240.5p 271.1p
(valuing debt at market)
Net Asset Value per Share 287.9p 272.7p 299.0p
(valuing debt at par)
Share Price 237.3p 220.0p 253.0p
Earnings per Share 4.8p 4.2p 6.8p
Dividend per Share 3.7p 3.2p 6.7p
(Interim) (Interim) (Total)
Over the half-year VIT's share price fell 6.2% while the net asset value,
valuing debt at par, fell by 3.7%.The FTSE All-Share Index increased by 1% over
the half-year, in capital terms. VIT's property portfolio was revalued
independently at 30 September 2007 and the capital value had declined by 1.3%
compared to 31 March 2007.
An interim dividend of 3.7p has been declared payable on 11 January 2008 to
those shareholders on the register on 14 December 2007 with a related
ex-dividend date of 12 December 2007. In the absence of unforeseen circumstances
the Directors expect to recommend to shareholders the approval of a final
dividend of a further 3.7p per share for the year ended 31 March 2008 which
would take total dividends for the full year to 7.4p per share (+10.4%).
Enquiries: Matthew Oakeshott or Angela Lascelles
OLIM Limited, Investment Managers
Tel: 0207 439 4400 / Fax: 0207 734 1445
Website: www.olim.co.uk
INTERIM MANAGEMENT REPORT
Events during the period
At the Company's Annual General Meeting on 5 July 2007, all resolutions were
passed.
At the period end the following shareholders had notified the Company of their
holdings:
Shareholder Number of Ordinary shares % of Ordinary Shares held
held (with voting rights
attaching)
Legal & General Group PLC 1,475,777 3.2
Risks and Uncertainties
The Board has identified the key risks that affect its business as follows which
are considered equally applicable to the second half of the financial year to 31
March 2008 as for the half-year under review:
• Market price risk: Changes in interest rates, valuations accorded to
financial instruments and movements thereof, and the liquidity of financial
instruments constitute market price risk. It is the Board's policy to hold
an appropriate spread of investments in the portfolio in order to reduce the
risk arising from factors specific to any particular sector. Market price
risk is managed through investment guidelines agreed by the Board with the
Manager and is discussed at each Board meeting.
• Gearing risk: The Group's policy is to increase its exposure to equity and
property markets through the judicious use of borrowings. When borrowings
are invested in such markets, the effect is to magnify the impact on
shareholders' funds of changes, both positive and negative, in the value of
the portfolio. The Group's borrowings providing secure long term funding are
long term debenture stocks maturing in 2021 and 2026. The debenture stocks
are valued at amortised cost in the financial statements. The Manager
regulates the overall level of gearing by raising or lowering cash balances.
• Credit risk: The Group places funds with authorised deposit takers from
time to time and is therefore potentially at risk from the failure of any
such institution of which it is a creditor. Amounts of such funds at the
balance sheet date are shown on the balance sheet as 'Cash and cash
equivalents'.
• Liquidity risk: The Group's assets comprise of readily realisable
securities which can be sold to meet commitments if required and investment
properties which, by their nature, are rather less readily realisable.
Directors' Responsibilities
The Directors confirm that to the best of their knowledge:
• the condensed set of financial statements within the Half-Yearly Financial
Report has been prepared in accordance with International Accounting
Standard 34 'Interim Financial Reporting'; and
• the interim board report includes a fair review of the information
required by 4.2.7R and 4.2.8R of the FSA's Disclosure and Transparency
Rules.
For Value and Income Trust PLC
James Ferguson
Chairman
30 October 2007
VALUE AND INCOME TRUST PLC
GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
6 months ended 6 months ended
30 September 2007 30 September 2006
(Unaudited) (Unaudited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
INVESTMENT INCOME
Dividend income 2,638 - 2,638 2,381 - 2,381
Interest income 80 - 80 79 - 79
OTHER OPERATING INCOME 1,660 - 1,660 1,590 - 1,590
_________ _________ _________ _________ _________ _________
TOTAL INCOME 4,378 - 4,378 4,050 - 4,050
GAINS AND LOSSES ON INVESTMENTS
Realised gains on - 4,337 4,337 - 4,657 4,657
held-at-fair-value investments
Unrealised gains/(losses) on - (10,086) (10,086) - 1,310 1,310
investments
_________ _________ _________ _________ _________ _________
TOTAL REVENUE 4,378 (5,749) (1,371) 4,050 5,967 10,017
_________ _________ _________ _________ _________ _________
EXPENSES
Investment management fees (203) (475) (678) (174) (407) (581)
Other operating expenses (241) - (241) (232) - (232)
FINANCE COSTS (1,751) - (1,751) (1,751) - (1,751)
_________ _________ _________ _________ _________ _________
TOTAL EXPENSES (2,195) (475) (2,670) (2,157) (407) (2,564)
_________ _________ _________ _________ _________ _________
PROFIT BEFORE TAX 2,183 (6,224) (4,041) 1,893 5,560 7,453
TAXATION - 590 590 - (413) (413)
_________ _________ _________ _________ _________ _________
PROFIT FOR THE PERIOD 2,183 (5,634) (3,451) 1,893 5,147 7,040
_________ _________ _________ _________ _________ _________
EARNINGS PER ORDINARY SHARE 4.79 (12.37) (7.58) 4.16 11.30 15.46
(PENCE)
DIVIDENDS PER ORDINARY SHARE 3.70 3.20
(PENCE)
The total column of this statement represents the Group's Income Statement
prepared in accordance with IFRS. The supplementary revenue return and capital
return columns are both prepared under guidance issued by the Association of
Investment Companies. All items in the above statement derive from continuing
operations.
All income is attributable to the equity holders of the parent company. There
are no minority interests.
VALUE AND INCOME TRUST PLC
GROUP INCOME STATEMENT (Cont'd)
Year ended
31 March 2007
(Audited)
Revenue Capital Total
£'000 £'000 £'000
INVESTMENT INCOME
Dividend income 4,010 - 4,010
Interest income 174 - 174
OTHER OPERATING INCOME 3,196 - 3,196
__________ __________ __________
TOTAL INCOME 7,380 - 7,380
GAINS AND LOSSES ON INVESTMENTS
Realised gains on held-at-fair-value investments - 9,073 9,073
Unrealised gains/(losses) on investments - 10,363 10,363
__________ __________ __________
TOTAL REVENUE 7,380 19,436 26,816
__________ __________ __________
EXPENSES
Investment management fees (366) (1,361) (1,727)
Other operating expenses (409) - (409)
FINANCE COSTS (3,502) - (3,502)
__________ __________ __________
TOTAL EXPENSES (4,277) (1,361) (5,638)
__________ __________ __________
PROFIT BEFORE TAX 3,103 18,075 21,178
TAXATION - (713) (713)
__________ __________ __________
PROFIT FOR THE PERIOD 3,103 17,362 20,465
__________ __________ __________
EARNINGS PER ORDINARY SHARE (PENCE) 6.81 38.12 44.93
DIVIDENDS PER ORDINARY SHARE (PENCE) 6.40
VALUE AND INCOME TRUST PLC
STATEMENT OF CHANGES IN EQUITY
for the 6 months ended 30 September 2007
6 months ended 30 September 2007 Year ended 31 March 2007
(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 March 2007 4,555 18,446 113,189 136,190 4,555 18,446 95,685 118,686
Net profit for the period - - (3,451) (3,451) - - 20,465 20,465
Dividends paid - - (1,594) (1,594) - - (2,961) (2,961)
_______ ________ _______ _______ _______ _______ _______ _______
NET ASSETS AT 30 SEPTEMBER 2007 4,555 18,446 108,144 131,145 4,555 18,446 113,189 136,190
_______ ________ _______ _______ _______ _______ _______ _______
VALUE AND INCOME TRUST PLC
STATEMENT OF CHANGES IN EQUITY (Cont'd)
Group 6 months ended 30 September 2006
(Unaudited)
Share Share Retained Total
capital premium earnings
£'000 £'000 £'000 £'000
Net assets at 31 March 2007 4,555 18,446 95,685 118,686
Net profit for the period - - 7,040 7,040
Dividends paid - - (1,503) (1,503)
_________ _________ _________ _________
NET ASSETS AT 30 SEPTEMBER 2007 4,555 18,446 101,222 124,223
_________ _________ _________ _________
VALUE AND INCOME TRUST PLC
GROUP BALANCE SHEET
as at 30 September 2007
As at As at As at
30 September 31 March 30 September
2007 2007 2006
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000 £'000 £'000 £'000
ASSETS
NON CURRENT ASSETS
Investments held at fair value through 112,225 118,716 105,239
profit or loss
Investment properties held at fair value 53,825 54,525 54,725
through profit or loss
________ ________ ________
166,050 173,241 159,964
CURRENT ASSETS
Cash and cash equivalents 5,061 2,266 2,996
Other receivables 498 1,556 1,419
________ ________ ________
5,559 3,822 4,415
________ ________ ________
TOTAL ASSETS 171,609 177,063 164,379
CURRENT LIABILITIES
Other payables (2,244) (2,051) (1,623)
________ ________ ________
169,365 175,012 162,756
NON-CURRENT LIABILITIES
Debenture stock (35,456) (35,468) (35,480)
Deferred tax (2,764) (3,354) (3,053)
________ ________ ________
(38,220) (38,822) (38,533)
________ ________ ________
131,145 136,190 124,223
________ ________ ________
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Ordinary called up share capital 4,555 4,555 4,555
Share premium 18,446 18,446 18,446
Retained earnings 108,144 113,189 101,222
________ ________ ________
131,145 136,190 124,223
________ ________ ________
NET ASSET VALUE PER ORDINARY SHARE 287.91p 298.99p 272.72p
VALUE AND INCOME TRUST PLC
GROUP CASH FLOW STATEMENT
for the 6 months ended 30 September 2007
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000 £'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Dividend income received 2,778 2,372 3,903
Rental received 1,480 1,272 3,117
Interest received 81 79 174
Operating expenses paid (1,419) (1,231) (2,020)
________ ________ ________
NET CASH INFLOW FROM OPERATING ACTIVITIES 2,920 2,492 5,174
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments (8,749) (15,947) (28,207)
Sale of investments 11,981 17,612 29,680
________ ________ ________
NET CASH INFLOW FROM
INVESTING ACTIVITIES 3,232 1,665 1,473
CASH FLOW FROM FINANCING ACTIVITIES
Interest paid (1,763) (1,763) (3,525)
Dividends paid (1,594) (1,503) (2,961)
________ ________ ________
NET CASH USED IN FINANCING ACTIVITIES (3,357) (3,266) (6,486)
________ ________ ________
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,795 891 161
Cash and cash equivalents at the start of the 2,266 2,105 2,105
period
________ ________ ________
CASH AND CASH EQUIVALENTS AT THE END OF THE 5,061 2,996 2,266
PERIOD
________ ________ ________
VALUE AND INCOME TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS
(1) Accounting policies
(a) 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) and International Accounting Standards and
Standing Interpretations Committee interpretations 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.
The financial statements have been prepared on the historical cost
basis, except for the revaluation of certain financial assets. 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 is consistent with the
requirements of IFRS, the directors have sought to prepare the
financial statements on the basis compliant with the recommendations
of the SORP.
(b) Dividends payable
Interim dividends are recognised as a liability in the period in
which they are declared by the board of directors and 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.
(c) Investments
All investments have been designated upon initial recognition as fair
value though 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.
Investments designated as at fair value are measured at subsequent
reporting dates at fair value, which is either the bid price or the
last traded price, depending on the convention of the exchange on
which the investment is quoted. In respect of property investments,
fair value is established by a 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.
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.
(2) Return per ordinary share
The return per ordinary share is based on the following figures:
6 months ended 6 months ended Year ended
30 September 2007 30 September 2006 31 March 2007
£'000 £'000 £'000
Revenue return 2,183 1,893 3,103
Capital return (5,634) 5,147 17,362
Weighted average ordinary
shares
in issue 45,549,975 45,549,975 45,549,975
Return per share - revenue 4.79p 4.16p 6.81p
Return per share - capital (12.37p) 11.30p 38.12p
_________ _________ _________
Total return per share (7.58p) 15.46p 44.93p
_________ _________ _________
6 months ended 6 months ended Year ended
September 2007 September 2006 March 2007
(3) Dividends paid £'000 £'000 £'000
Ordinary dividends on equity shares deducted from reserves are as follows:-
Dividends on ordinary shares:
Final dividend of 3.5p per share (2006 - 3.3p) 1,594 1,503 1,503
paid 12 July 2007
Interim dividend of 3.2p per share (2006 - 3.1p) - - 1,458
paid 5 January 2007 ____________ ____________ ____________
1,594 1,503 2,961
____________ ____________ ____________
(4) Interim dividend
The Directors have declared an interim dividend of 3.7p (2007 - 3.2p) per
ordinary share, payable on 11 January 2008 to shareholders registered on 14
December 2007. The shares will be quoted ex- dividend on 12 December 2007.
(5) Retained earnings
The table below shows the movement in the retained earnings analysed
between revenue and capital items.
Revenue Capital Total
£'000 £'000 £'000
At 31 March 2007 2,850 110,339 113,189
Movement during the period:-
Profit for the period 2,183 (5,634) (3,451)
Dividends paid on ordinary shares (1,594) - (1,594)
________ ________ ________
At 30 September 2007 3,439 104,705 108,144
________ ________ ________
6 months 6 months Year
ended ended ended
September September March
2007 2006 2007
£'000 £'000 £'000
Transaction costs
Incurred during the period were
transaction costs of:-
Purchases 60 99 181
Sales 16 32 50
________ ________ ________
76 131 231
_________ _________ _________
(7) Comparative information
The financial information in this Half-Yearly Financial Report comprises
non-statutory financial statements within the meaning of s240 of the
Companies. The financial information for the year ended 31 March 2007 has
been extracted from published audited financial statements Act 1985 that
have been delivered to the Registrar of Companies. The report of the
auditors on those financial statements was unqualified under Section 235 of
the Companies Act 1985. This Half-Yearly Financial Report has not been
audited.
(8) Interim Report
The Interim Report will be issued to shareholders in November 2007 and
copies may be obtained from the Manager, OLIM Limited, Pollen House, 10/12
Cork Street, London W1S 3NP (Tel. 020 7439 4400) or by download from the
Trust's section of the Manager's website - www.olim.co.uk or from the
Company Secretary, Edinburgh Fund Managers PLC, Donaldson House,
97 Haymarket Terrace, Edinburgh, EH12 5HD.
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