Interim Results
INVESCO Asia Trust plc
Preliminary Announcement of Unaudited Interim Results
For the Six Months to 31 October 2006
31 October 30 April %
2006 2006 Change
Net assets (£'000) 100,455 107,209 -6.3
Actual gearing 107 106
Asset gearing 108 105
Net asset value per ordinary share 94.8p 101.2p -6.3
Net asset value (total return) (1) -5.0
Mid-market price per ordinary share 86.3p 96.0p -10.1
Discount per ordinary share 9.0% 5.1%
MSCI (All Country) Far East Free
ex Japan Index (Adjusted for 198.3 209.7 -5.4
sterling) (1)
MSCI (All Country) Far East Free ex 599.6 622.1 -3.6
Japan Total Return Index (Adjusted
for Sterling) (1)
(1) Source: Thomson Financial Datastream
Chairman's Statement
Performance and Prospects
The Company's performance for the six months to 31 October 2006 reflects the
volatile period for equities which we have seen since May 2006. Over the
period, the net asset value per ordinary share decreased from 101.2p to 94.8p,
a fall of 6.3%. The benchmark index, the MSCI (All Country) Far East Free ex
Japan Index (adjusted for Sterling), fell by 5.4%. The Company's share price
fell from 96.0p to 86.3p, while the discount to net asset value at which the
shares trade widened to 9.0% from 5.1%.
Since the management of the Company moved to Henley in March 2004, overall
performance has remained strong. The underperformance over the six-month period
reflects a difficult period for investors during which Stuart Parks and his
team adopted a cautious approach and reduced exposure to the more expensive
Asian growth stocks. The team predicted the overall scenario broadly correctly,
both in terms of the global outlook and of the impact that it would have upon
Asian stockmarkets. They have now adopted a more proactive strategy designed to
take advantage of opportunities in the current environment, but have maintained
their strong focus on generating medium- to-long-term value. It is encouraging
to note that in the last two months of 2006 the Company's share price has risen
and the discount to net asset value has narrowed.
With the high savings rates, cost competitiveness and demographics of the
region making its growth prospects more attractive than those of developed
economies, the Asian equity markets continue to provide attractive investment
opportunities. There are also signs that, in economic and stockmarket terms,
Asia is decoupling from the US, something that it has struggled to do in the
past. At the same time, the Chinese economy, which continues to experience
strong growth, is becoming increasingly influential on the economic prospects
of the rest of the region.
Economic growth remains robust, with recent third-quarter GDP growth figures
highlighting Asia's ability to grow even when the US economy is beginning to
slow. This is obviously a very strong positive for Asia.
Dividend
As usual, no dividend is being declared in respect of the interim period.
Board Appointment
I am delighted to report that Mr James Robinson was appointed to the Board on 3
January 2007. Mr Robinson's extensive experience in investment trusts and fund
management will be of great value to the Company.
Outlook
Although a number of markets in the region have hit new highs, the long-term
outlook remains promising. The region now trades on a forward price to earnings
ratio of around 12 times 2007 earnings which should provide a cushion against
corrections in world stockmarkets.
David Hinde
Chairman
15 January 2007
Income Statement
Six Months to
31 October 2006
(Unaudited)
Revenue Capital Total
return return return
£'000 £'000 £'000
Losses on investments held at
fair
value through profit or loss - (6,067) (6,067)
Losses on foreign currency - (153) (153)
revaluation
Income
UK dividends 26 - 26
Overseas dividends 1,574 - 1,574
Scrip dividends 61 - 61
Deposit interest 6 - 6
Gross return 1,667 (6,220) (4,553)
Investment management (95) (285) (380)
fee - note 2
Other expenses (227) (74) (301)
Net return before finance costs
and taxation 1,345 (6,579) (5,234)
Interest payable and similar
charges -
note 2 (28) (86) (114)
Dividends on ordinary shares - (1,272) - (1,272)
note 3
Return on ordinary activities
before tax 45 (6,665) (6,620)
Tax on ordinary activities (367) 233 (134)
Net return on ordinary
activities
after tax for the period (322) (6,432) (6,754)
Return per ordinary share -
note 4
Basic 0.90p (6.07)p (5.17)p
The total column of this statement represents the Company's profit and loss
account. The supplementary revenue and capital columns are both prepared under
guidance published by the Association of Investment Companies (previously known
as the Association of Investment Trust Companies). All items in the above
statement derive from continuing operations and the Company has no other gains
or losses, therefore no Statement of Total Recognised Gains and Losses is
presented. No operations were acquired or discontinued in the period.
Income Statement
Six Months Year to
to 31 October 30 April
2005 2006
(unaudited) (audited)
Revenue Capital Total Total
return return return return
£'000 £'000 £'000 £'000
Gains on investments held at
fair
value through profit and - 11,028 11,028 36,735
loss
Losses on foreign currency - (62) (62) (125)
revaluation
Income
UK Dividends - - - 6
Overseas dividends 1,442 - 1,442 2,407
Scrip dividends 39 - 39 154
Deposit interest 22 - 22 26
Gross return 1,503 10,966 12,469 39,203
Investment management (82) (247) (329) (736)
fee - note 2
Other expenses (209) (6) (215) (508)
Net return before finance
costs
and taxation 1,212 10,713 11,925 37,959
Interest payable and similar
charges -
note 2 (26) (64) (90) (272)
Dividends on ordinary shares - (954) - (954) (954)
note 3
Return on ordinary activities
before taxation 232 10,649 10,881 36,733
Tax on ordinary activities (409) 239 (170) (372)
Net return on ordinary
activities
after tax for the period (177) 10,888 10,711 36,361
Return per ordinary share -
note 4
Basic 0.73p 10.28p 11.01p 35.22p
Balance Sheet
At At At
31 October 30 April 31 October
2006 2006 2005
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Fixed assets
Investments held at fair value through
profit or loss 108,160 113,101 83,614
Current assets
Amounts due from brokers 101 624 3,122
Tax recoverable 3 - -
VAT recoverable 35 46 39
Prepayments and accrued income 148 162 119
Cash at bank 1,736 1,098 1,419
2,023 1,930 4,699
Creditors: amounts falling due within
one year
Amounts owed to brokers (2,035) (607) (2,165)
Short-term loan (7,300) (6,800) (4,275)
Accruals and deferred income (379) (371) (280)
(9,714) (7,778) (6,720)
Net current liabilities (7,691) (5,848) (2,021)
Total assets less current liabilities 100,469 107,253 81,593
Provisions for liabilities (14) (44) (34)
Total net assets attributable to
Shareholders 100,455 107,209 81,559
Total net assets attributable to
Shareholders are represented by:
Called up share capital 10,596 10,596 10,596
Share premium account 74,588 74,588 74,588
Other reserves
Capital redemption reserve 650 650 650
Special reserve 25,796 25,796 25,796
Capital reserve - realised (26,535) (28,357) (39,937)
Capital reserve - unrealised 13,473 21,727 8,187
Revenue reserve 1,887 2,209 1,679
100,455 107,209 81,559
Net asset value per share - note 5
Basic 94.8p 101.2p 77.0p
Cash Flow Statement
Six months to Year to Six months to
31 October 30 April 31 October
2006 2006 2005
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Cash inflow from operating
activities 857 1,157 914
Servicing of finance
Interest paid on bank loans (118) (301) (117)
Dividends paid to Shareholders (1,272) (954) (954)
Capital expenditure and
financial investment
Purchase of investments (40,466) (124,897) (59,121)
Sale of investments 41,290 117,642 54,708
Net cash inflow/(outflow) before
management of liquid resources
and financing 291 (7,353) (4,570)
Management of liquid resources - 3,588 3,213
Financing 500 3,100 575
Increase/(decrease) in cash in
the period 791 (665) (782)
Reconciliation of cash flow to
movement
in net funds/(debt)
Increase/(decrease) in cash in 791 (665) (782)
the period
Cash inflow from movement in (500) (3,100) (575)
debt
Cash movement from decrease
in liquid resources - (3,588) (3,213)
Translation difference (153) (125) (62)
Movement in net funds/(debt)
in the period 138 (7,478) (4,632)
Net (debt)/funds at beginning of (5,702) 1,776 1,776
period
Net debt at end of period (5,564) (5,702) (2,856)
Notes
1. The accounts of the Company are prepared in accordance with applicable UK
Accounting Standards and with the Statement of Recommended Practice "Financial
Statements of Investment Trust Companies" issued by the Association of
Investment Trust Companies in December 2005.
The Financial Information for the period to 31 October 2006 has been prepared
on the basis consistent with the accounting policies adopted by the Company in
its statutory accounts for the year ended 30 April 2006.
2. Investment management fees and interest payable on borrowings are charged
75% to the capital reserve and 25% to the revenue account.
3. The Company paid a final dividend of 1.2p per ordinary share for the year
ended 30 April 2006 on 28 July 2006 to shareholders on the register on 7 July
2006. The Directors do not propose the payment of an interim dividend (2005:
nil).
As the ordinary shares are classified as liabilities, the dividends payable on
the ordinary shares are now accounted for under finance costs.
4. Return per Ordinary Share
The return per ordinary share is based on 105,962,425 ordinary shares, being
the number of shares in issue throughout the periods and on the following
figures:
Six Months to Six Months to Year to
31 October 2006 31 October 2005 30 April
2006
(Unaudited) (Unaudited) (Audited)
Revenue Capital Total Revenue Capital Total Total
Return Return Return Return Return Return Return
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Return on (322) (6,432) (6,754) (177) 10,888 10,711 36,361
ordinary
activities after
tax for the
period
Dividends paid to 1,272 - 1,272 954 - 954 954
Shareholders
Return 950 (6,432) (5,482) 777 10,888 11,665 37,315
attributable to
Ordinary
Shareholders
Return per 0.90p (6.07)p (5.17)p 0.73p 10.28p 11.01p 35.22p
Ordinary Share -
Basic
5. The basic net asset value per ordinary share of 10p has been calculated on
net assets of £100,455,000 (30 April 2006: £107,209,000; 31 October 2005: £
81,559,000) and on 105,962,425 ordinary share in issue throughout the periods.
6. Reconciliation of Movements in Ordinary Share Capital and Reserves
Capital Capital Capital
Share Share Redemption Special Reserve Reserve - Revenue
-
Capital Premium Reserve Reserve Realised Unrealised Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
For the six
months ended
31 October 2006
(Unaudited)
Balance as at 10,596 74,588 650 25,796 (28,357) 21,727 2,209 107,209
1 May 2006
Net return from - - - - 1,822 (8,254) (322) (6,754)
ordinary
activities
At 31 October 10,596 74,588 650 25,796 (26,535) 13,473 1,887 100,455
2006
For the year
ended
30 April 2006
(Audited)
Balance as at 10,596 74,588 650 25,796 (46,805) 4,167 1,856 70,848
1 May 2005
Net return from - - - - 18,448 17,560 353 36,361
ordinary
activities
At 30 April 2006 10,596 74,588 650 25,796 (28,357) 21,727 2,209 107,209
For the six
months ended 31
October 2005
(Unaudited)
Balance as at 10,596 74,588 650 25,796 (46,805) 4,167 1,856 70,848
1 May 2005
Net return from - - - - 6,868 4,020 (177) 10,711
ordinary
activities
At 31 October 10,596 74,588 650 25,796 (39,937) 8,187 1,679 81,559
2005
7. It is the intention of the Directors to conduct the affairs of the Company
so that it satisfies the conditions for approval as an investment trust company
set out in section 842 of the Income and Corporation Taxes Act 1988.
8. The foregoing information at 30 April 2006 is an abridged version of the
Company's full accounts which carry an unqualified Auditor's report and have
been filed with the Registrar of Companies.
By Order of the Board
INVESCO Asset Management Limited
Secretary
15 January 2007
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