Interim Results

Witan Pacific Investment Trust PLC 29 September 2006 WITAN PACIFIC INVESTMENT TRUST PLC Preliminary announcement of unaudited interim results for the six months to 31 July 2006 Financial Highlights Summary of Unaudited Results attributable to equity shareholders 31 July 2006 31 January 2006 % change Net asset value per share 166.56p 179.20p -7.1% Share price 150.75p 168.00p -10.3% Discount 9.5% 6.3% MSCI AC Asia Pacific Free Index (Â£) - Capital only* -7.2% * Source: Datastream. Chairman's Statement It is a pleasure to present my first Interim Statement to shareholders after my appointment as Chairman in June 2006. Since the beginning of the financial year markets in general, but in the Asia Pacific region in particular, have been on a rollercoaster ride and it has been difficult to judge their direction. However, our Managers were appointed for their long-term approach to investment in the region and they have continued to pursue the individual management styles and strategies for which they were appointed. Over the six months under review markets in the region have generally fallen. The NAV of the Company has performed in line with the benchmark index over the six months. Both the Fund Managers outperformed the Index in the period, Aberdeen returning -5.1% and Nomura somewhat less at -6.2%. The running costs of the Company, including tax, accounted for the difference between the Managers' underlying performance and the final NAV of -7.1% indicated above. Since the new management arrangements were put into place the Aberdeen portfolio has risen 23.6% and Nomura 26.1% against an index return of 24.7%. These varying outcomes show the benefit of having two investment managers with different approaches. The severe setback in markets in May and June 2006 saw investment trust discounts widen, particularly in those trusts invested in Emerging Markets and the Pacific Basin. As a result of this setback the Company's share price declined 10.3% over the reporting period. This occurred as the discount widened to 9.5% from 6.3% as at the end of January 2006. Over the twelve months to end July 2006 and despite the recent market falls, the share price has risen 15.7%. The Board has continued with its policy to buy back the Company's shares expecting that the discount will be comparable to that of its peers. During the six months to 31 July 2006 Aberdeen's strategy in this more volatile period was to take selective profits in shares which they thought had run up too far. They then invested the proceeds in slightly more defensive type companies whose underlying operations will continue to generate strong cash flow and continued earnings growth in the medium term. Nomura reduced their overweight exposure to the Japanese market to an index weighting, believing that they can deploy cash resources more effectively in other regional markets. Aberdeen remains very underweight in Japan. As those of you who invest in the Company through the F&C savings schemes will be aware, F&C will no longer be offering this facility to Witan Pacific shareholders. Your Board has arranged for Witan Investment Services to offer similar savings product plans to those offered by F&C. I hope that those of you to whom this applies and, who are now in receipt of an information pack on this matter, will have made your decision and returned your election form. If you have not, please do so immediately as in the event that you fail to return your completed form by 9 November 2006 F&C will sell your shares on your behalf. I do hope you will choose to remain a Witan Pacific shareholder. After the period of heightened volatility which has brought markets back to lower levels there are some reasons for caution in the current environment. However, the region's economies are still likely to grow faster than the more developed western economies and markets across the region would appear to be reasonably priced. Our Managers remain confident of their respective investment strategies. Gillian Nott Chairman 29 September 2006 Unaudited Income Statement for the six months to 31 July 2006 (Unaudited) (Unaudited) (Audited) Six months to 31 July 2006 Six months to 31 July 2005 Year to 31 January 2006 Revenue Capital Revenue Capital Revenue Capital return return Total return return Total return return Total Notes Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Total (losses)/ - (10,650) (10,650) - 9,770 9,770 - 40,221 40,221 gains from investments held at fair value through profit or loss Exchange (losses)/ - (89) (89) - 119 119 - 82 82 gains Income from 2 2,058 - 2,058 2,620 - 2,620 3,825 - 3,825 investments held at fair value through profit or loss Management fee 3 (172) - (172) (417) - (417) (598) - (598) Performance -related 3 - (62) (62) - (348) (348) - (92) (92) management fee Other expenses (393) (12) (405) (424) (19) (443) (788) (58) (846) ------------------------------------------------------------------------------------------------------- Net return/ (loss) 1,493 (10,813) (9,320) 1,779 9,522 11,301 2,439 40,153 42,592 before finance charges and taxation Finance charges (76) - (76) (139) - (139) (208) - (208) ------------------------------------------------------------------------------------------------------- Return/ (loss) on 1,417 (10,813) (9,396) 1,640 9,522 11,162 2,231 40,153 42,384 ordinary activities before taxation Taxation on (529) 19 (510) (587) 75 (512) (786) (63) (849) ordinary activities ------------------------------------------------------------------------------------------------------- Net return/ (loss) 5 888 (10,794) (9,906) 1,053 9,597 10,650 1,445 40,090 41,535 on ordinary activities after taxation ======================================================================================================= Return/ (loss) per 1.04 (12.66) (11.62) 0.81 7.34 8.15 1.33 36.84 38.17 ordinary share - pence ======================================================================================================= All revenue and capital items in the above statement derive from continuing operations. The total columns of this statement represent the profit and loss account of the Company. The Company had no recognised gains or losses other than those disclosed in the Income Statement and Reconciliation of Movements in Shareholders' Funds. Reconciliation of Movement in Shareholders' Funds for the six months to 31 July 2006 Share Capital Share premium redemption Capital Revenue capital account reserve reserves reserve Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 At 31 January 2006 21,701 5 35,870 89,691 8,286 155,553 Net (loss)/return from ordinary activities - - - (10,794) 888 (9,906) Dividend paid in respect of year ended 31 - - - - (1,130) (1,130) January 2006 Repurchase of 2,453,119 ordinary shares for (613) - 613 (4,023) - (4,023) cancellation ------------------------------------------------------------------- At 31 July 2006 21,088 5 36,483 74,874 8,044 140,494 =================================================================== Purchase transaction costs for the six months to 31 July 2006 were Â£25,000 (six months to 31 July 2005: Â£88,000; year to 31 January 2006: Â£105,000). Sale transaction costs for the six months to 31 July 2006 were Â£39,000 (six months to 31 July 2005: Â£165,000; year to 31 January 2006: Â£243,000). Unaudited Balance Sheet as at 31 July 2006 Note (Unaudited) (Unaudited) (Audited) 31 July 2006 31 July 2005 31 January 2006 Â£'000 Â£'000 Â£'000 Fixed assets Investments held at fair value through profit or 139,859 122,825 153,733 loss ------------- ------------ ------------ Current assets Debtors 1,204 609 2,384 Cash at bank and short-term deposits 4,434 6,190 5,233 ------------- ------------ ------------ 5,638 6,799 7,617 ------------- ------------- ------------- Creditors: amounts falling due within one year: Loans (3,000) - (3,000) Other (1,944) (1,298) (2,759) -------------- ------------ ------------ (4,944) (1,298) (5,759) -------------- ------------ ------------ Net current assets 694 5,501 1,858 -------------- ------------ ----------- 140,553 128,326 155,591 Total assets less current liabilities Provision for liabilities (59) (341) (38) -------------- ------------ ----------- Net assets 140,494 127,985 155,553 ============== ============ =========== Capital and reserves Called up share capital 21,088 22,232 21,701 Share premium account 5 5 5 Capital redemption reserve 36,483 35,339 35,870 Capital reserves 74,874 62,515 89,691 Revenue reserve 8,044 7,894 8,286 ------------- ------------ ------------ Equity shareholders' funds 140,494 127,985 155,553 ============= ============ ============ Net asset value per ordinary share - pence 6 166.56 143.92 179.20 ============= ============= =========== Unaudited Cash Flow Statement for the six months to 31 July 2006 Note (Unaudited) (Unaudited) (Audited) Six months to Six months to Year to 31 July 2006 31 July 2005 31 January 2006 Â£'000 Â£'000 Â£'000 Net cash inflow from operating activities 7 1,148 1,703 2,609 Interest paid (2) (161) (181) Net tax paid (455) (604) (1,028) Net cash inflow from financial investment 3,752 97,330 96,178 Equity dividends paid (1,130) (1,614) (1,614) -------------- -------------- --------------- Net cash inflow before use of liquid resources 3,313 96,654 95,964 and financing Decrease in short-term deposits -- 2,621 2,621 Net cash outflow from financing (4,023) (96,431) (96,661) -------------- -------------- -------------- (Decrease)/increase in cash during the period (710) 2,844 1,924 ============ ============ ============ Reconciliation of net cash flow to movement in net funds (Decrease)/increase in cash (710) 2,844 1,924 Decrease in short-term deposits - (2,621) (2,621) Decrease in loans - 15,205 12,205 ------------- ------------- ------------- Change in net funds resulting from cash flows (710) 15,428 11,508 Foreign exchange movements (89) 119 82 ------------- ------------- ------------- Movement in net funds (799) 15,547 11,590 Net funds/(debt) at the beginning of the period 2,233 (9,357) (9,357) ------------- ------------- ------------- Net funds at the end of the period 1,434 6,190 2,233 ============ ============ ============ Represented by Cash at bank 4,434 6,190 5,233 Loans - short-term (3,000) - (3,000) ------------ ------------- ------------ Net funds at the end of the period 1,434 6,190 2,233 ============ ============= ============ Notes to the Accounts as at 31 July 2006 1 Accounting policies The accounts have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice ' Financial Statements of Investment Trust Companies' ('SORP') revised December 2005. All of the Company's operations are of a continuing nature. The same accounting policies used for the year ended 31 January 2006 have been applied. 2 Income (Unaudited) (Unaudited) (Audited) Six months to Six months to Year to 31 July 2006 31 July 2005 31 January 2006 Â£'000 Â£'000 Â£'000 Overseas dividends 1,975 2,382 3,448 Scrip dividends 13 42 116 Interest on loans and deposits 61 160 225 Stock lending fees 9 36 36 ------------ ------------ ------------ 2,058 2,620 3,825 ============ ============ ============ 3 Management fee and performance related management fee On 27 May 2005, your Board appointed Witan as Executive Manager and Aberdeen and Nomura as the new Investment Managers. Each of the investment managers is entitled to a base management fee, calculated according to the value of the assets under their management, and a performance fee. The performance fee is calculated according to investment performance over a 3 year rolling period and is subject to a cap. Each management agreement can be terminated at one month's notice. The base management fees range from 0.2% to 0.25% per annum and the performance fees range from 10% to 15% per annum of the relevant performance. The provisions included in the Income Statement at 31 July 2006, are calculated based on the performance of each investment manager relative to the benchmark index for the two months to 31 July 2006 and 12 months to 31 May 2006. Each provision assumes that both the benchmark and each manager's assets under management remain unchanged to 31 May 2007, being the date the second performance period ends. 4 Dividends on ordinary shares No interim dividend payment will be made (6 months ended 31 July 2005: nil and year ended 31 January 2006: final of 1.33p per share). 5 Return per ordinary shares The return per ordinary share is based on the net loss attributable to the ordinary shares of Â£9,906,000 (six months to 31 July 2005: return Â£10,650,000; year to 31 January 2006: return Â£41,535,000) and on 85,284,030 ordinary shares (six months to 31 July 2005: 130,705,513; year to 31 January 2006: 108,816,460) being the weighted average number of ordinary shares in issue during the period. (Unaudited) (Unaudited) (Audited) Six months to Six months to Year to 31 July 2006 31 July 2005 31 January 2006 Net revenue return (Â£'000) 888 1,053 1,445 Net capital return (Â£'000) (10,794) 9,597 40,090 -------------- ------------- --------------- Net total return (Â£'000) (9,906) 10,650 41,535 ============== ============= =============== Weighted average number of ordinary shares in issue 85,284,030 130,705,513 108,816,460 during the period Revenue return per ordinary share - pence 1.04 0.81 1.33 Capital return per ordinary share - pence (12.66) 7.34 36.84 ---------------- ---------------- ----------------- Total return per ordinary share - pence (11.62) 8.15 38.17 ============== ============= =============== 6 Net asset value per ordinary share Net asset value per ordinary share is based on 84,352,144 ordinary shares of 25p each in issue at 31 July 2006 (31 July 2005: 88,926,220 and 31 January 2006: 86,805,263). 7 Reconciliation of revenue return before finance costs and taxation to net cash inflow from operating activities (Unaudited) (Unaudited) (Audited) Six months to Six months to Year to 31 July 2006 31 July 2005 31 January 2006 Â£'000 Â£'000 Â£'000 Total (loss)/return before finance charges (9,320) 11,301 42,592 and taxation Less capital return before finance charges 10,813 (9,522) (40,153) and taxation ---------------- ---------------- --------------- Revenue return before finance costs and 1,493 1,779 2,439 taxation Increase in accrued income (54) (169) (11) (Increase)/decrease in debtors of a revenue (23) - 27 nature (Decrease)/increase in creditors of a revenue (193) 135 323 nature Management fee rebate (62) - (53) Scrip dividends (13) (42) (116) ---------------- --------------- ---------------- Net cash inflow from operating activities 1,148 1,703 2,609 ================ =============== =============== 8 Results The results for the six months to 31 July 2006 and 31 July 2005, which are unaudited, constitute non-statutory accounts within the meaning of Section 240 of the Companies Act 1985. The latest published accounts which have been delivered to the Registrar of Companies are for the year ended 31 January 2006. The report of the auditors thereon was unqualified and did not contain a statement under Section 237 of the Companies Act 1985. The comparative figures for the year ended 31 January 2006 have been extracted from those accounts. Copies of the interim report will be sent to shareholders in October 2006 and will be available from the Company Secretary. For further information, please contact: Jyoti Jeetun Company Secretary - Investment Trusts BNP Paribas Secretarial Services Limited Tel: 020 7410 3132 29 September 2006 This information is provided by RNS The company news service from the London Stock Exchange QKBLBBD

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