Interim Results
British Portfolio Trust PLC
26 June 2006
For Immediate Release 26th June 2006
BRITISH PORTFOLIO TRUST plc
ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
For the period from 1st November 2005 to 30th April 2006
Net Asset Value
A summary of the results for the period from 1st November 2005 to 30th April
2006 is set out below. The Net Asset Value (NAV) per Ordinary Share as at 30th
April 2006 was 187.5p. This represents an increase of 16.8% over the NAV as at
31st October 2005. Over the same period the Company's benchmark index, the FTSE
All-Share Index, rose by 15.4%.
Interim Dividend
The Board has declared an interim dividend of 1.75p per Ordinary Share (compared
to 1.60p last year), which will absorb £741,749 and is payable on 6th September
2006 to all holders of Ordinary Shares on the Register of Members at the close
of business on 4th August 2006.
Share Buybacks
During the period under review 3,073,333 Ordinary Shares were purchased for
cancellation at a cost of £4,810,243, (including 2,333,333 Ordinary Shares
purchased into treasury at a cost of £3,594,991), at an average discount of
around 5.0%. In the period from 1st May 2006 until 26th June 2006 a further
95,000 Ordinary Shares have been purchased for cancellation at a cost of
£160,727 and a further 110,000 Ordinary Shares have been purchased into treasury
at a cost of £166,212.
Outlook
The UK equity market performed extremely well in the period up to the end of
April, with investors comfortable about the level of world economic growth and
the outlook for inflation. However, more recently, comments from the new
Chairman of the Federal Reserve, Ben Bernanke, have highlighted the risks of a
upturn in inflation and the possibility of further increases in US interest
rates. At present, the bond markets appear to have faith that Mr Bernanke will
be successful in restraining inflation, with long term bonds in the US trading
at similar yields to shorter maturities. This has traditionally been a sign that
markets expect slower growth and stable inflation. The implications for the UK
equity market are significant because a large component of UK company earnings
come from the US, and global economic growth prospects are to a large extent
dependent upon the continuing health of US consumer expenditure.
The outlook for UK interest rates looks confused with interest rate futures
markets pointing to rate hikes later in the year, but recent mortgage approvals
for April were below expectations. The World Cup will distort statistics in the
short term, but if the trend of a slowing housing market continues, which we
expect, it is likely that interest rates will remain unchanged.
Commodity exposed sectors have been the biggest gainers in the Stock Market over
the last year on the back of dramatic underlying commodity price rises. After
such big rises, a period of consolidation can probably be expected but the long
term supply and demand dynamics still remain favourable for the resources
sectors. We will continue to monitor any merger and acquisition activity within
the sector to make sure that the companies are maintaining financial discipline.
Equities still look attractively valued compared to bonds and reasonable value
in absolute terms. With low interest rates likely to continue in the UK,
funding new corporate acquisitions will remain attractive for many companies. As
a consequence, the UK equity market looks reasonably well supported in the
medium term despite the nervousness brought about by recent volatility.
155 Bishopsgate By Order of the Board
London EC2M 3AD P W I Ingram
26th June 2006 Secretary
SUMMARY OF RESULTS
INCOME STATEMENT
Six months ended 30th April 2006
Revenue Capital Total
£'000s £'000s £'000s
(Note 2)
Net gains on investments at fair value - 11,665 11,665
Income 1,426 - 1,426
Investment management fee (149) (358) (507)
Expenses of administration (83) (2) (85)
Return on ordinary activities before finance costs and
taxation 1,194 11,305 12,499
Finance costs : interest payable and similar charges (47) (140) (187)
Return on ordinary activities before taxation 1,147 11,165 12,312
Taxation (1) - (1)
Return attributable to Ordinary Shareholders 1,146 11,165 12,311
Return per Ordinary Share (Note 1) 2.66p 25.96p 28.62p
(basic and undiluted)
BALANCE SHEET
As at 30th April 2006
£'000s
Investments at fair value through profit or loss 80,897
Interest Rate Swaps at fair value through profit or loss 85
Net Current Assets 4,485
Total Assets less Current Liabilities 85,467
Creditors - Amounts falling due after one year (6,000)
Total Net Assets 79,467
Called up Share Capital 453
Share Premium Account 12,378
Special Reserve 46,260
Capital Redemption Reserve 91
Capital Reserves - Realised 2,010
Unrealised 16,444
Hedging Reserve 85
Revenue Reserve 1,746
Shareholders' Funds 79,467
Net Asset Value per Ordinary Share 187.5 p
The net asset value is based on 42,385,669 Ordinary Shares in issue.
An additional 2,887,333 Ordinary Shares were held in treasury.
SUMMARY OF RESULTS
INCOME STATEMENT
Six months ended 30th April 2005
Revenue Capital Total
£'000s £'000s £'000s
(Note 2)
Net gains on investments at fair value - 4,127 4,127
Income 1,305 - 1,305
Investment management fee (134) (316) (450)
Expenses of administration (80) (3) (83)
Return on ordinary activities before finance costs and
taxation 1,091 3,808 4,899
Finance costs: interest payable and similar charges (47) (137) (184)
Return on ordinary activities before taxation 1,044 3,671 4,715
Taxation (1) - (1)
Return attributable to Ordinary Shareholders 1,043 3,671 4,714
Return per Ordinary Share (Note 1) 2.23p 7.86p 10.09p
(basic and diluted)
BALANCE SHEET
As at 30th April 2005
(restated)
£'000s
Investments at fair value through profit or loss 67,050
Net Current Assets 5,318
Total Assets less Current Liabilities 72,368
Creditors - Amounts falling due after one year (6,000)
Total Net Assets 66,368
Called up Share Capital 462
Share Premium Account 12,378
Special Reserve 52,170
Capital Redemption Reserve 82
Capital Reserves - Realised (4,465)
Unrealised 4,437
Revenue Reserve 1,304
Shareholders' Funds 66,368
Net Asset Value per Ordinary Share 143.6p
The net asset value is based on 46,226,502 Ordinary Shares in issue.
No Ordinary Shares were held in treasury.
SUMMARY OF RESULTS
INCOME STATEMENT
for the year to 31st October 2005
Revenue Capital Total
£'000s £'000s £'000s
(Note 2)
Net gains on investments at fair value - 11,989 11,989
Income 2,642 - 2,642
Investment management fee (281) (667) (948)
Expenses of administration (171) (4) (175)
Return on ordinary activities before finance costs
and taxation 2,190 11,318 13,508
Finance costs: interest payable and similar (93) (278) (371)
charges
Return on ordinary activities before taxation 2,097 11,040 13,137
Taxation (2) - (2)
Return attributable to Ordinary Shareholders 2,095 11,040 13,135
Return per Ordinary Share (Note 1) 4.53p 23.88p 28.41p
BALANCE SHEET
As at 31st October 2005
(restated)
£'000s
Investments at fair value through profit or loss 72,302
Net Current Assets 6,655
Total Assets less Current Liabilities 78,957
Creditors- Amounts falling due after one year (6,000)
Total Net Assets 72,957
Called up Share Capital 460
Share Premium Account 12,378
Special Reserve 51,068
Capital Redemption Reserve 84
Capital Reserves - Realised (1,055)
Unrealised 8,396
Revenue Reserve 1,626
Shareholders' Funds 72,957
Net Asset Value per Ordinary Share 160.5p
The net asset value is based on 45,459,002 Ordinary Shares in issue.
An additional 554,000 Ordinary Shares were held in treasury.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the six months ended 30th April 2006 and comparative periods
Called up Share Capital Capital Capital
Share Premium Special Redemption Reserve Reserve Hedging Revenue
Capital Account Reserve Reserve Realised Unrealised Reserve Reserve Total
(£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s)
Six months ended 30th April
2006
Net Assets at 31st October
2005 460 12,378 51,068 84 (1,055) 8,396 - 535 71,866
as previously stated
Dividends on Ordinary
Shares not recognised as a
current liability - - - - - - - 1,091 1,091
Net Assets at 31st October 460 12,378 51,068 84 (1,055) 8,396 - 1,626 72,957
2005 (restated)
Adjustment to record
investments at bid value - - - - - (52) - - (52)
Recognition of Interest - - - - - - 85 - 85
Rate Swaps
Revenue Return - - - - - - - 1,146 1,146
Shares repurchased during
the period (7) - (4,808) 7 - - - - (4,808)
Dividends on Ordinary - - - - - - - (1,026) (1,026)
Shares
Capital Return - - - - 3,065 8,100 - - 11,165
Net Assets at 30th April 453 12,378 46,260 91 2,010 16,444 85 1,746 79,467
2006
Six months ended 30th April
2005
Net Assets at 31st October 472 12,378 53,456 72 (6,487) 2,788 - 252 62,931
2004
As previously stated
Dividends on Ordinary
Shares not recognised as a
current liability - - - - - - - 944 944
Net Assets at 31st October
2004 (restated) 472 12,378 53,456 72 (6,487) 2,788 - 1,196 63,875
Revenue Return - - - - - - - 1,043 1,043
Shares repurchased during
the period (10) - (1,286) 10 - - - - (1,286)
Dividends on Ordinary - - - - - - - (935) (935)
Shares
Capital Return - - - - 2,022 1,649 - - 3,671
Net Assets at 30th April
2005 (restated) 462 12,378 52,170 82 (4,465) 4,437 - 1,304 66,368
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
continued
Called up Share Capital Capital Capital
Share Premium Special Redemption Reserve Reserve Hedging Revenue
Capital Account Reserve Reserve Realised Unrealised Reserve Reserve Total
(£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s) (£'000s)
Year ended 31st October
2005
Net Assets at 31st October
2004 as previously stated 472 12,378 53,456 72 (6,487) 2,788 - 252 62,931
Dividends on Ordinary
Shares not recognised as a
current liability - - - - - - - 944 944
Net Assets at 31st October
2004 (restated) 472 12,378 53,456 72 (6,487) 2,788 - 1,196 63,875
Revenue Return - - - - - - - 2,095 2,095
Shares repurchased during (12) - (2,388) 12 - - - - (2,388)
the year
Dividends on Ordinary - - - - - - - (1,665) (1,665)
Shares
Capital Return - - - - 5,432 5,608 - - 11,040
Net Assets at 31st October
2005 (restated) 460 12,378 51,068 84 (1,055) 8,396 - 1,626 72,957
SUMMARY OF RESULTS
CASH FLOW STATEMENT
For the six months ended 30th April 2006 and comparative periods
Six Months to Six Months to Year to
30th April 30th April 31st October
2006 2005 2005
£'000s £'000s £'000s
Net cash inflow from operating activities 736 350 1,805
Servicing of finance
Interest paid (202) (182) (366)
Investing activities
Purchases of fixed asset investments (13,734) (11,028) (24,223)
Sales of fixed asset investments 15,070 13,081 28,875
Net cash inflow from investing activities 1,336 2,053 4,652
Equity dividends paid (1,026) (935) (1,665)
Net cash inflow before financing 844 1,286 4,426
Financing
Purchase of Ordinary Shares for cancellation and held
in treasury (4,808) (1,286) (2,388)
Capital distribution from Jos Holdings plc - 1 1
Net cash outflow from financing (4,808) (1,285) (2,387)
(Decrease) Increase in cash (3,964) 1 2,039
TWENTY LARGEST EQUITY HOLDINGS
As at 30th April 2006
Valuation % of Total Principal Activities
£'000s Assets*
BP 5,977 6.99 Oil & Gas
GlaxoSmithKline 4,311 5.04 Pharmaceuticals & Biotechnology
HSBC Holdings 4,129 4.83 Banks
Royal Dutch Shell 'B' Shares 4,113 4.81 Oil & Gas
Vodafone Group 3,556 4.16 Telecommunication Services
Royal Bank of Scotland 2,672 3.13 Banks
AstraZeneca 2,300 2.69 Pharmaceuticals & Biotechnology
Barclays 2,207 2.58 Banks
Anglo American 1,932 2.26 Mining
HBOS 1,723 2.02 Banks
Energy XXI 1,399 1.64 Speciality & Other Finance
Prudential 1,384 1.62 Life Assurance
Aberdeen Asset Management 1,376 1.61 General Financial
BT Group 1,371 1.60 Telecommunication Services
British American Tobacco 1,341 1.57 Tobacco
Land Securities 1,242 1.45 Real Estate
Lloyds TSB 1,239 1.45 Banks
Mulberry Group 1,208 1.41 General Retailers
BHP Billiton 1,207 1.41 Mining
BG Group 1,161 1.36 Oil & Gas
45,848 53.63
PORTFOLIO ANALYSIS
As at 30th April 2006
Sector Valuation % of Total Assets*
£000s
Cyclical Consumer Goods 1,795 2.10
Cyclical Services 7,135 8.35
Financials 25,326 29.63
Non Cyclical Services 5,758 6.74
Non Cyclical Consumer Goods 9,372 10.96
Resources 17,733 20.75
Information Technology 2,297 2.69
Utilities 5,308 6.21
Basic Industries 1,615 1.89
General Industrials 4,558 5.33
Interest Rate Swap (see Note 3) 85 0.10
Net Current Assets 4,485 5.25
85,467 100.00
* Total Assets are stated net of Current Liabilities.
Note 1
The return per Ordinary Share is based on a weighted average number of shares in
issue of 43,015,328 (30th April 2005: 46,731,463; 31st October 2005:
46,234,631).
Note 2
The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items derive from continuing operations. No operations
were acquired or discontinued in the period.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the Income Statement.
Included in the cost of investments are transaction costs on purchases amounting
to £82,618 (30th April 2005: £70,404; 31st October 2005: £138,556) and
transaction costs on sales amounting to £21,533 (30th April 2005: £22,288; 31st
October 2005: £50,207).
Note 3
Investments are designated as held at fair value through profit or loss in
accordance with FRS 26 'Financial Instruments: Measurement'. Listed investments
are valued at bid market prices. This represents a change in accounting policy.
However, in accordance with the exemption conferred by paragraph 108D of FRS
26, comparatives have not been restated. In prior periods listed investments
were valued at mid-market prices. As a consequence the adoption of bid prices
on 1st November 2005 decreased the value of listed investments by £52,256 to
£72,249,871.
Interest rate swaps are now also held at fair value through profit or loss.
Previously, they were stated at nil.
Note 4
In accordance with FRS 21 'Events after the Balance Sheet Date', the final
dividend payable on Ordinary Shares is recognised as a liability when approved
by shareholders. Interim dividends are recognised only when paid. This is a
change of accounting policy and results in a restatement of the prior year
creditors and a consequential increase in the prior year net asset value.
Dividends paid on Ordinary Shares in respect of earnings for each period are as
follows:
Six months to Six months to Year to
30th April 2006 30th April 2005 31st October 2005
Interim dividend 1.60p paid 3rd September 2005 - - 730
Final dividend 2.40p paid 3rd March 2006 1,026 935 935
(2004-2.00p)
1,026 935 1,665
Dividends payable at the period end are not recognised as a liability under FRS
21 'Events after The Balance Sheet Date'. Details of these dividends are set
out below.
Six months to Six months to Year to
30th April 2006 30th April 2005 31st October 2005
Interim dividend 1.75p payable 6th September 2006 742 740 -
(2005-1.60p)
Final dividend 2.40p - - 1,091
The interim dividend above is based on the number of shares in issue at the
period end. However, the dividend payable will be based on the number of shares
in issue on the record date and will reflect any purchases and cancellations of
shares by the Company settled subsequent to the period end.
Note 5
Restatement of opening balances
As previously stated Restated
30 April 2005 Adjustment 30 April 2005
£'000s £'000s £'000s
Fixed Assets Investments 67,050 - 67,050
Net Current Assets 4,578 740 1 5,318
Total Assets less Current Liabilities 71,628 740 72,368
Less: Creditors-amounts falling due after
more than one year (6,000) - (6,000)
Total Net Assets 65,628 740 66,368
Capital and Reserves
Called up Share Capital 462 - 462
Share Premium Account 12,378 - 12,378
Special Reserve 52,170 - 52,170
Capital Redemption Reserve 82 - 82
Capital Reserves: Realised (4,465) - (4,465)
Unrealised 4,437 - 4,437
Revenue Reserve 564 740 1 1,304
Shareholders' Funds 65,628 740 66,368
Net asset value per Ordinary Share 142.0p 1.6p 143.6p
As previously stated Restated
31 October 2005 Adjustment 31 October 2005
£'000s £'000s £'000s
Fixed Assets Investments 72,302 - 72,302
Net Current Assets 5,564 1,091 2 6,655
Total Assets less Current Liabilities 77,866 1,091 78,957
Less: Creditors-amounts falling due after
more than one year (6,000) - (6,000)
Total Net Assets 71,866 1,091 72,957
Capital and Reserves
Called up Share Capital 460 - 460
Share Premium Account 12,378 - 12,378
Special Reserve 51,068 - 51,068
Capital Redemption Reserve 84 - 84
Capital Reserves: Realised (1,055) - (1,055)
Unrealised 8,396 - 8,396
Revenue Reserve 535 1,091 2 1,626
Shareholders' Funds 71,866 1,091 72,957
Net asset value per Ordinary Share 158.1p 2.4p 160.5p
1 Represents the effect of not recognising the interim dividend (FRS 21)
2 Represents the effect of not recognising the final dividend (FRS 21)
Note 6
The interim statement has neither been audited nor reviewed by the Company's
auditors. The financial information for the year ended 31st October 2005 has
been extracted from the statutory accounts of the Company at that date which
have been delivered to the Registrar of Companies and restated by reference to
the changes in accounting policies detailed above. The Auditors' report on those
accounts was unqualified and did not contain a statement under Section 237 (2)
or (3) of the Companies Act 1985.
The Interim Report will be sent to Shareholders shortly and made available to
the public at the Registered Office of the Company, 155 Bishopsgate, London EC2M
3AD.
For further information, please contact:-
Simon White
RCM (UK) Limited
Tel: 020 7065 1539
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