For immediate release 29 July 2015
THE BRUNNER INVESTMENT TRUST PLC
HALF-YEARLY FINANCIAL REPORT
For the six months ended 31 May 2015
Highlights
· Net asset value (debt at fair value) per share up by 8.3%
· Earnings per ordinary share 8.0p (2014 - 7.8p)
· Interim dividends for the period 6.4p1 (2014 - 6.1p)
Revenue |
At 31 May 2015
|
At 31 May 2014 |
|
% change
|
||||
Available for ordinary dividend |
£3,434,000 |
£3,357,000 |
|
+2.3 |
||||
Earnings per ordinary share |
8.0p |
7.8p |
|
+2.6 |
||||
Interim dividends per ordinary share |
6.4p1 |
6.1p |
|
+4.9 |
||||
Retail price index |
258.5 |
255.9 |
|
+1.0 |
||||
|
|
|
|
|
||||
1first interim 3.2p, second interim 3.2p |
|
|
|
|
||||
Assets
|
At 31 May 2015 |
At 30 November 2014 |
|
% change
|
||||
Net Asset Value per ordinary share (debt at fair value) |
666.2p |
614.9p |
|
+8.3 |
||||
Net Asset Value per ordinary share (debt at par) |
696.8p |
646.0p |
|
+7.9 |
||||
Ordinary share price |
569.5p |
541.0p |
|
+5.3 |
||||
Total net assets (debt at fair value) |
£286,626,000 |
£264,945,000 |
|
+8.2 |
||||
Total net assets (debt at par) |
£299,798,000 |
£278,363,000 |
|
+7.7 |
||||
|
|
|
|
|
||||
|
||||||||
|
|
|
|
|
||||
Net Asset Value relative to Benchmark |
|
|
Capital Return2 |
Total Return3 |
||||
|
|
|
|
|
||||
Change in net asset value |
|
|
8.3% |
9.1% |
||||
Change in benchmark |
|
|
5.2% |
6.8% |
||||
|
|
|
|
|
||||
Performance against benchmark |
|
|
3.1% |
2.3% |
||||
|
|
|
|
|
||||
2 Debt at fair value. |
||||||||
Portfolio relative to Benchmark |
|
|
Capital Return |
Total Return* |
||||
|
|
|
|
|
||||
Net portfolio return (excluding cash & gilts) |
|
|
8.2% |
9.8% |
||||
Change in benchmark |
|
|
5.2% |
6.8% |
||||
|
|
|
|
|
||||
Performance against benchmark |
|
|
3.0% |
3.0% |
||||
3 Total returns are calculated with net dividends reinvested.
Interim Management Report
Net Asset Value
A summary of the results for the six months ended 31 May 2015 is set out below. The net asset value (debt at fair value) attributable to each ordinary share at 31 May 2015 was 666.2p. This compares with 614.9p at 30 November 2014, an increase of 8.3% over the period. The capital return on the benchmark index (50% FTSE All-Share, 50% FTSE World Index (ex UK Sterling), was 5.2% over the period.
Earnings
Earnings increased by 2.6% to 8.0p per ordinary share in the six months to 31 May 2015 (2014 - 7.8p).
Gearing
The gearing at 30 November 2014 was 11.8% and at 31 May 2015 was 6.2%. Gearing is calculated after deducting cash and the value of holdings in government securities held to offset some of the long term debentures issued.
Quarterly Dividends
The board declared a first quarterly dividend of 3.2p per ordinary share which was paid on 30 June 2015. The board has now declared a second quarterly dividend of 3.2p per ordinary share payable on 21 September 2015 to holders on the register of members at the close of business on 21 August 2015. A third quarterly payment will be made in December and the final dividend will be proposed for payment in March 2016.
This is the second year of quarterly dividend payments. It is the intention that dividend increases will be applied to the first three quarterly payments rather than the final dividend with the aim of achieving a more even distribution between the four payments over time.
Material events and transactions
In the six month period ended 31 May 2015 the following material events and transactions have taken place.
· At the annual general meeting of the company held on 17 March 2015, all the resolutions put to shareholders were passed.
· During the period under review the company purchased 67,000 ordinary shares for cancellation.
There were no related party transactions in the period.
Since the period end, a further 5,000 ordinary shares have been purchased for cancellation.
Principal Risks
The principal risks facing the company over the next six months are broadly unchanged from those described in the Annual Financial Report for the year ended 30 November 2014. These are set out in a table in the Strategic Report on page 10 of the annual report, together with commentary on the board's approach to mitigating the risks, under the following headings: Investment Strategy; Market Volatility; and Financial and Liquidity Risk.
Responsibility Statement
The directors confirm to the best of their knowledge that:
· The condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with the Accounting Standards board's Statement 'Half-Yearly Financial Reports'; and
· The interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7 R of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
· The interim management report includes a fair review of the information concerning related parties transactions as required by the Disclosure and Transparency Rule 4.2.8 R.
Chairman
I have been Chairman since March 2004, having joined the board at the beginning of that year. I will be retiring from the board at the conclusion of the Annual General Meeting in 2016 and will be succeeded as Chairman by Carolan Dobson, who joined the board in December 2013 and whose knowledge and experience in the investment management industry will continue to be of great benefit to your company.
The half-yearly financial report was approved by the board on 29 July 2015 and the above responsibility statement was signed on its behalf by the Chairman.
Keith Percy
Chairman
Enquiries:
For further information, please contact:
Allianz Global Investors GmbH, UK Branch
Melissa Gallagher
Head of Investment Trusts
Tel: 020 7065 1539
Investment Managers' Review
Market Review
Global equities posted moderate gains, underpinned by accommodative monetary policies, particularly in Europe and Japan. In local currency terms, Japan led the way higher, followed by Europe. In emerging markets, China outperformed. On a global sector basis, Health Care and Consumer Services outperformed while Utilities and Oil & Gas lagged. Uncertainty over the timing of a Federal Reserve interest rate hike remained and bond market volatility increased.
The UK economy continued to improve and in May equities, gilts and sterling initially rallied in the aftermath of the general election. First quarter GDP growth was revised upward from 0.3% to 0.4%, boosted by stronger construction activity.
In Europe, the European Central Bank initiated its sovereign bond quantitative easing programme, sending bond yields and the euro lower while equity markets rallied. Euro zone first quarter GDP was mixed with disappointing German growth of 0.3% quarter-on-quarter offset by better-than-expected growth from France and Italy. Consumer prices surprised on the upside with a 0.3% rise in May, easing fears over deflation and contributing to a bond market sell-off. The ongoing stalemate between Greece and its international creditors over the terms of continued support for the Greek economy continued to weigh on sentiment.
US macroeconomic data showed that the economy was rebounding from a weak first quarter. Non-farm payrolls rose by 280,000 in May and upward revisions to the previous two monthly reports, plus a jump in wage growth, suggested that the US labour market remained healthy. May consumer spending also rose a robust 0.9% and the housing market remained strong. Despite the plethora of positive economic indicators that raised expectations of a turn in the US interest rate cycle, markets were reassured by relatively dovish comments from the Federal Reserve. Fed chair Janet Yellen acknowledged the improvement in economic momentum but cautioned that policymakers wanted to see firmer evidence that the recovery was sustainable before raising rates.
In Japan the Nikkei 225 index reached a 15 year high as first quarter GDP growth was stronger than anticipated and wage increases in April exceeded inflation for the first time in two years. Equity markets in China continued to move higher although volatility increased and concerns mounted that the liquidity and leverage fuelled buying bubble was about to burst.
Portfolio Review
Over the period the portfolio's NAV rose 8.2%, compared to a 5.2% gain for the benchmark (50% FTSE All-Share, 50% FTSE World ex-UK). Performance benefited from positive stock selection in Consumer Services, Financials and Oil & Gas. The overweight in Industrials and underweights in Utilities and Basic Materials also helped. Stock selection in Health Care and Technology were modest negatives, as was the overweight in Oil & Gas. From a country perspective, stock selection in the UK and US was positive while Japan detracted.
Last year Mothercare was the top detractor and we argued that our valuation work suggested that the market was overly negative on the company's UK business and largely overlooked the strength of the international operations. Last September the company announced a £100 million rights issue in order to accelerate the restructuring of the UK business and recapitalise the balance sheet. The shares have since recovered and the turnaround strategy in the UK seems to be starting to bear fruit. The international business continues to do well and growth is expected to accelerate as new territories are added. The business as a whole is expected to be free cash flow positive by 2017. The shares continue to offer upside particularly if we begin to see gross margin expansion although we anticipate a somewhat volatile ride.
Interbroker dealer Tullet Prebon also contributed. In November of last year the company announced that it had hired a team of brokers in the US which would help leverage the company's existing interdealer broking infrastructure. The company also received a favourable $130 million settlement in a legal case which will be used to consolidate the voice broking market. Additionally, Tullet has rationalised its fixed cost base and introduced a target-based pay structure for its top executives. The shares continue to trade at a significant discount to its peers and we believe the prospects for further interdealer broker consolidation and a pick-up in trading volumes as equity volatility increases provide further upside potential.
Business technology and services company Xchanging was the top detractor. The company has been undergoing a transformation over the last few years and has made a number of acquisitions in technology and procurement and exited non-core areas. 2014 saw a 22.7% decline in revenues offset by an increase in operating margins from 10.5% in 2013 to 13.7%. Now that the restructuring has been completed, the company is well-placed to grow sales, expand margins further and increase profits. There is a meaningful opportunity to grow the high margin Xuber commercial insurance software solutions business. We believe the shares are undervalued.
Brazilian infrastructure company CCR also detracted. The shares have been held back by higher interest rates, currency depreciation and a lacklustre equity market. First quarter results were uninspiring with earnings depressed due to weak toll road revenues as commercial vehicle traffic declined due to the weak economy. However, the Brazilian government recently announced a $65 billion infrastructure package which will heavily involve new private sector concessions to build and operate. While details on the rates of returns on these proposed projects have yet to be released, this should provide a good long-term growth opportunity for CCR. Over the near term, management anticipates a recovery in toll road traffic next year and contributions from a number of projects nearing completion.
New holdings during the period included Antofagasta, John Wood Group and Amphenol, while the most significant sales were UCB, BAE Systems and Spectris.
Outlook
We have noted previously that expansive monetary policies, abundant global liquidity and receding concerns over the pace, size and impact of the US Federal Reserve interest rate tightening need to be considered against a market backdrop of relatively full valuations and weaker earnings growth. The considerable uncertainties around Greece's membership of the Eurozone must be thrown into the mix.
However, the risk of contagion across the euro zone should be relatively limited. The institutional architecture of the euro zone has been strengthened considerably over the last few years with the establishment of financial assistance and stabilisation mechanisms that improve the area's resilience to systemic risk. Nevertheless, it will be important to monitor the situation carefully and maintain vigilance against the possibility of a so far unforeseen event that further destabilises the region.
Volatility has picked up across a variety of asset classes and we anticipate that this will eventually flow through to equities as well. Our view remains that market gains over the near term are likely to be muted and active management is required to augment returns.
As the markets begin to gyrate more, it is worth remembering that volatility is not risk. It has been defined as such primarily because it is measurable, and most of the risk modelling tools used to manage portfolios are based on this definition. Despite the great lesson of the Financial Crisis, this situation persists. As every long term investor knows, true financial risk is permanent reduction in capital value, or the failure to achieve financial objectives.
Managing a concentrated global equity portfolio in an environment of greater uncertainty requires strong fundamentally based conviction, balanced exposure and valuation discipline. Strong fundamental conviction is important to take advantage of heightened market nervousness, particularly if generated by short term factors such as currency adjustments, commodity fluctuations or weather. Balanced exposure in a portfolio means ensuring the returns are not driven by one or two macro or style factors, but rather by a diverse selection of stocks with low correlation. Absolute valuations for equities are at the high end of historic ranges. Extreme valuation plus a rising discount rate can be a dangerous combination, particularly if accompanied by earnings disappointment.
We continue to apply these investment principles to Brunner and favour stocks that can grow their businesses, earnings and dividends independently of the macroeconomic environment. Areas where we are finding companies that meet these criteria include health care, technology and industrials. In health care our focus is on companies with strong franchises in growing therapeutic areas such as oncology and immunology, while in technology we have purchased companies benefiting from the emerging ubiquity of internet connectivity for both consumers and businesses. In industrials many of our holdings are leading companies in niche areas with a high component of aftermarket sales and services, which provide comparatively stable revenue streams.
Maintaining our disciplined focus on buying quality companies at attractive valuations enables us to build upon the meaningful capital gains and 43 year history of consistent dividend growth that Brunner shareholders have enjoyed.
Lucy MacDonald and Jeremy Thomas
Allianz Global Investors
BRUNNER INVESTMENT TRUST PLC
LISTED EQUITY HOLDINGS AS AT 31 MAY 2015
Security Name |
Market Value |
Total Assets |
|
|
£'000s |
% |
Principal Activity |
HSBC |
9,392 |
2.95 |
Banks |
Royal Dutch Shell 'B' Shares |
8,692 |
2.73 |
Oil & Gas Producers |
Vodafone |
8,316 |
2.61 |
Mobile Telecommunications |
Mothercare |
7,965 |
2.50 |
General Retailers |
BP |
7,656 |
2.41 |
Oil & Gas Producers |
Microsoft |
7,264 |
2.28 |
Software & Computer Services |
GlaxoSmithKline |
5,950 |
1.87 |
Pharmaceuticals & Biotechnology |
Roche Holdings |
5,901 |
1.85 |
Pharmaceuticals & Biotechnology |
AbbVie |
5,695 |
1.79 |
Pharmaceuticals & Biotechnology |
UBM |
5,565 |
1.75 |
Media |
Walgreen |
5,520 |
1.73 |
Food & Drug Retailers |
Estee Lauder "A" Shares |
5,515 |
1.73 |
Personal Goods |
BG Group |
5,413 |
1.70 |
Oil & Gas Producers |
Nielsen |
5,131 |
1.61 |
Media |
Monsanto |
5,118 |
1.61 |
Food Producers |
Muenchener Rueckver |
4,852 |
1.52 |
Non-Life Insurance |
United Health |
4,781 |
1.50 |
Health Care Equipment & Services |
UBS |
4,727 |
1.49 |
Banks |
Rio Tinto |
4,724 |
1.48 |
Mining |
Better Capital |
4,663 |
1.47 |
Equity Investment |
Apple |
4,513 |
1.42 |
Technology Hardware & Equipment |
Balfour Beatty |
4,505 |
1.42 |
Construction & Materials |
Boot (Henry) |
4,479 |
1.41 |
Construction & Materials |
Tullett Prebon |
4,478 |
1.41 |
Financial Services |
Unilever |
4,425 |
1.39 |
Food Producers |
Rolls Royce |
4,350 |
1.37 |
Aerospace & Defence |
Fresenius |
4,295 |
1.35 |
Health Care Equipment & Services |
SMC |
4,260 |
1.34 |
Industrial Engineering |
Xchanging |
4,223 |
1.33 |
Support Services |
EOG Resources |
4,186 |
1.32 |
Oil & Gas Producers |
Visa |
4,117 |
1.29 |
Financial Services |
William Hill |
4,081 |
1.28 |
Travel & Leisure |
Wells Fargo |
4,010 |
1.26 |
Banks |
SThree |
3,886 |
1.22 |
Support Services |
Accenture |
3,795 |
1.19 |
Support Services |
United Internet |
3,787 |
1.19 |
Software & Computer Services |
Tyman |
3,722 |
1.17 |
Construction & Materials |
Hansteen Holdings |
3,705 |
1.16 |
Real Estate |
Hays |
3,693 |
1.16 |
Support Services |
Nestle |
3,685 |
1.16 |
Food Producers |
Intertek |
3,676 |
1.16 |
Support Services |
Ameriprise Financial |
3,593 |
1.13 |
Financial Services |
Celgene |
3,515 |
1.10 |
Pharmaceuticals & Biotechnology |
AMETEK |
3,490 |
1.10 |
Electronic & Electrical Equipment |
BHP Billiton |
3,461 |
1.09 |
Mining |
Amadeus |
3,415 |
1.07 |
Support Services |
BOC Hong Kong Holdings |
3,391 |
1.07 |
Banks |
Priceline.com |
3,326 |
1.04 |
Travel & Leisure |
Citigroup |
3,296 |
1.04 |
Banks |
Security Name |
Market Value |
Total Assets |
|
|
£'000s |
% |
Principal Activity |
Itochu |
3,294 |
1.04 |
Support Services |
Agilent Technologies |
3,289 |
1.03 |
Electronic & Electrical Equipment |
Microchip Technology |
3,256 |
1.02 |
Technology Hardware & Equipment |
Schneider Electric |
3,203 |
1.01 |
Electronic & Electrical Equipment |
Adidas |
3,176 |
1.00 |
Personal Goods |
Astellas Pharma |
3,062 |
0.96 |
Pharmaceuticals & Biotechnology |
China Mobile |
3,062 |
0.96 |
Mobile Telecommunications |
Anadarko Petroleum |
3,052 |
0.96 |
Oil & Gas Producers |
Brambles |
3,015 |
0.95 |
General Industrials |
ICAP |
3,011 |
0.95 |
Financial Services |
FirstGroup |
2,756 |
0.87 |
Travel & Leisure |
Aviva |
2,712 |
0.85 |
Life Insurance |
Cielo |
2,689 |
0.84 |
Financial Services |
BASF |
2,644 |
0.83 |
Chemicals |
AMEC Foster Wheeler |
2,599 |
0.82 |
Oil Equipment, Services & Distribution |
Centrica |
2,530 |
0.80 |
Gas, Water & Multiutilities |
Ashmore |
2,480 |
0.78 |
Financial Services |
IG Group |
2,459 |
0.77 |
Financial Services |
Australia & New Zealand Bank |
2,420 |
0.76 |
Banks |
Taiwan Semiconductor (ADS) |
2,377 |
0.75 |
Technology Hardware & Equipment |
AIA |
2,359 |
0.74 |
Life Insurance |
CCR |
2,157 |
0.68 |
Industrial Transportation |
Flowserve |
1,955 |
0.61 |
Industrial Engineering |
Cie Financiere Richemont |
1,835 |
0.58 |
Personal Goods |
Diageo |
1,816 |
0.57 |
Beverages |
Amphenol |
1,704 |
0.54 |
Electronic & Electrical Equipment |
Jiangsu Express |
1,681 |
0.53 |
Industrial Transportation |
Actavis |
1,646 |
0.52 |
Pharmaceuticals & Biotechnology |
Antofagasta |
1,492 |
0.47 |
Mining |
Wood Group |
1,466 |
0.46 |
Oil Equipment, Services & Distribution |
Petroceltic International |
1,309 |
0.41 |
Oil & Gas Producers |
Tesco |
1,275 |
0.40 |
Food & Drug Retailers |
Weir Group |
1,214 |
0.38 |
Industrial Engineering |
Smith & Nephew |
1,160 |
0.36 |
Health Care Equipment & Services |
Technip |
1,095 |
0.34 |
Oil Equipment, Services & Distribution |
South32 |
756 |
0.23 |
Industrial Metals |
|
318,204 |
99.99 |
|
UNLISTED EQUITY HOLDINGS |
|
|
|
at 31 May 2015 |
|
|
|
|
Market Value |
Total Assets |
|
|
£'000s |
% |
Principal Activity |
|
|
|
|
First Debenture Finance |
24 |
0.01 |
Financial Services |
Fintrust Debenture |
4 |
0.00 |
Financial Services |
|
28 |
0.01 |
|
|
|
|
GEOGRAPHICAL ANALYSIS AS AT 31 MAY 2015
|
% |
|
|
United Kingdom |
46.92 |
North America |
28.84 |
Europe |
13.39 |
Pacific Basin |
5.99 |
Japan |
3.34 |
Latin America |
1.52 |
|
|
Total |
100.00 |
SECTORAL ANALYSIS AS AT 31 MAY 2015
|
% |
|
|
Industrials |
21.92 |
Financials |
21.49 |
Health Care |
11.31 |
Consumer Services |
11.19 |
Oil & Gas |
11.15 |
Consumer Goods |
8.03 |
Technology |
6.66 |
Basic Materials |
3.87 |
Telecommunications |
3.58 |
Utilities |
0.80 |
|
|
Total |
100.00 |
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31 May 2015
|
Revenue |
Capital |
Total Return |
|
£'000s |
£'000s |
£'000s |
|
|
|
(Note 2) |
Net gains on investments at fair value |
- |
24,263 |
24,263 |
Net gains on foreign currency |
- |
20 |
20 |
Income from investments |
4,825 |
- |
4,825 |
Other income |
25 |
- |
25 |
Investment management fee |
(229) |
(534) |
(763) |
Administration expenses |
(292) |
(2) |
(294) |
Net return on ordinary activities before finance costs and taxation |
4,329 |
23,747 |
28,076 |
Finance costs: interest payable and similar charges |
(671) |
(1,542) |
(2,213) |
Net return on ordinary activities before taxation |
3,658 |
22,205 |
25,863 |
Taxation |
(224) |
- |
(224) |
|
|
|
|
Net return attributable to ordinary shareholders |
3,434 |
22,205 |
25,639 |
Net return per ordinary share (Note 1) |
|
|
|
(basic and diluted) |
7.97p |
51.54p |
59.51p |
BALANCE SHEET
as at 31 May 2015
|
£'000s |
|
|
Investments held at fair value through profit or loss |
318,232 |
Net current assets |
31,035 |
Total assets less current liabilities |
349,267 |
Creditors: amount falling due after more than one year |
(49,469) |
Total net assets |
299,798 |
|
|
Called up share capital |
10,756 |
Capital redemption reserve |
5,244 |
Capital reserves |
270,121 |
Revenue reserve |
13,677 |
Equity shareholders' funds |
299,798 |
|
|
Net asset value per ordinary share |
696.8p |
|
|
The net asset value is based on 43,024,918 ordinary shares in issue at 31 May 2015 |
|
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31 May 2014
|
Revenue |
Capital |
Total Return |
|
£'000s |
£'000s |
£'000s |
|
|
|
(Note 2) |
Net gains on investments at fair value |
- |
8,482 |
8,482 |
Net gains on foreign currency |
- |
24 |
24 |
Income from investments |
4,683 |
- |
4,683 |
Other income |
50 |
- |
50 |
Investment management fee |
(216) |
(505) |
(721) |
Administration expenses |
(308) |
(3) |
(311) |
Net return on ordinary activities before finance costs and taxation |
4,209 |
7,998 |
12,207 |
Finance costs: interest payable and similar charges |
(672) |
(1,543) |
(2,215) |
Net return on ordinary activities before taxation |
3,537 |
6,455 |
9,992 |
Taxation |
(180) |
- |
(180) |
|
|
|
|
Net return attributable to ordinary shareholders |
3,357 |
6,455 |
9,812 |
Net return per ordinary share (Note 1) |
|
|
|
(basic and diluted) |
7.79p |
14.98p |
22.77p |
BALANCE SHEET
as at 31 May 2014
|
£'000s |
|
|
Investments held at fair value through profit or loss |
312,523 |
Net current assets |
11,601 |
Total assets less current liabilities |
324,124 |
Creditors: amount falling due after more than one year |
(49,721) |
Total net assets |
274,403 |
|
|
Called up share capital |
10,772 |
Capital redemption reserve |
5,228 |
Capital reserves |
244,677 |
Revenue reserve |
13,726 |
Equity shareholders' funds |
274,403 |
|
|
Net asset value per ordinary share |
636.8p |
|
|
The net asset value is based on 43,089,418 ordinary shares in issue at 31 May 2014 |
|
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the year ended 30 November 2014
|
Revenue |
Capital |
Total Return |
|
£'000s |
£'000s |
£'000s |
|
|
|
(Note 2) |
Net gains on investments at fair value |
- |
14,137 |
14,137 |
Net gains on foreign currencies |
- |
27 |
27 |
Income from investments |
8,927 |
- |
8,927 |
Other income |
103 |
- |
103 |
Investment management fee |
(434) |
(1,013) |
(1,447) |
Administration expenses |
(595) |
(7) |
(602) |
Net return on ordinary activities before finance costs and taxation |
8,001 |
13,144 |
21,145 |
Finance costs: interest payable and similar charges |
(1,343) |
(3,081) |
(4,424) |
Net return on ordinary activities before taxation |
6,658 |
10,063 |
16,721 |
Taxation |
(320) |
- |
(320) |
Net return attributable to ordinary shareholders |
6,338 |
10,063 |
16,401 |
Net return per ordinary share (Note 1) |
|
|
|
(basic and diluted) |
14.71p |
23.35 p |
38.06 p |
BALANCE SHEET
as at 30 November 2014
|
£'000s |
|
|
Investments held at fair value through profit or loss |
329,281 |
Net current assets |
(1,319) |
Total assets less current liabilities |
327,962 |
Creditors: amount falling due after more than one year |
(49,599) |
Total net assets |
278,363 |
|
|
Called up share capital |
10,772 |
Capital redemption reserve |
5,228 |
Capital reserves |
248,285 |
Revenue reserve |
14,078 |
Equity shareholders' funds |
278,363 |
|
|
Net asset value per ordinary share |
646.0p |
|
|
The net asset value is based on 43,089,418 ordinary shares in issue at 30 November 2014 |
|
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
|
Called up Share Capital £'000s |
Capital Redemption Reserve £'000s |
Capital Reserve £'000s |
Revenue Reserve £'000s |
Total £'000s |
|
|
|
|
|
|
Six months ended 31 May 2015 |
|
|
|
|
|
Net Assets at 1 December 2014 |
10,772 |
5,228 |
248,285 |
14,078 |
278,363 |
Revenue return |
- |
- |
- |
3,434 |
3,434 |
Ordinary shares repurchased during the period |
(16) |
16 |
(369) |
- |
(369) |
Dividends on ordinary shares (Note 4) |
- |
- |
- |
(3,835) |
(3,835) |
Capital return |
- |
- |
22,205 |
- |
22,205 |
|
|
|
|
|
|
Net assets at 31 May 2015 |
10,756 |
5,244 |
270,121 |
13,677 |
299,798 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended 31 May 2014 |
|
|
|
|
|
Net Assets at 1 December 2013 |
10,772 |
5,228 |
238,222 |
14,032 |
268,254 |
Revenue return |
- |
- |
- |
3,357 |
3,357 |
Dividends on ordinary shares (Note 4) |
- |
- |
- |
(3,663) |
(3,663) |
Capital return |
- |
- |
6,455 |
- |
6,455 |
|
|
|
|
|
|
Net assets at 31 May 2014 |
10,772 |
5,228 |
244,677 |
13,726 |
274,403 |
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended 30 November 2014 |
|
|
|
|
|
Net assets at 1 December 2013 |
10,772 |
5,228 |
238,222 |
14,032 |
268,254 |
Revenue return |
- |
- |
- |
6,338 |
6,338 |
Dividends on ordinary shares (Note 4) |
- |
- |
- |
(6,292) |
(6,292) |
Capital return |
- |
- |
10,063 |
- |
10,063 |
|
|
|
|
|
|
Net assets at 30 November 2014 |
10,772 |
5,228 |
248,285 |
14,078 |
278,363 |
SUMMARY OF UNAUDITED RESULTS
CASH FLOW STATEMENT
|
Six Months ended 31 May 2015 |
|
Six Months ended 31 May 2014 |
|
Year ended 30 November 2014 |
|
£'000s |
|
£'000s |
|
£'000s |
Net cash inflow from operating activities |
4,395 |
|
4,271 |
|
7,564 |
|
|
|
|
|
|
Return on investments and servicing of finance |
|
|
|
|
|
Interest paid |
(2,333) |
|
(2,326) |
|
(4,646) |
Dividends paid on preference stock |
(11) |
|
(11) |
|
(22) |
|
|
|
|
|
|
Net cash outflow from servicing of finance |
(2,344) |
|
(2,337) |
|
(4,668) |
|
|
|
|
|
|
Capital expenditure and financial investment |
|
|
|
|
|
Purchase of fixed asset investments |
(14,995) |
|
(38,671) |
|
(79,721) |
Sale of fixed asset investments |
49,503 |
|
35,328 |
|
65,236 |
|
|
|
|
|
|
Net cash inflow (outflow) from capital expenditure and financial investment |
34,508 |
|
(3,343) |
|
(14,485) |
|
|
|
|
|
|
Equity dividends paid |
(3,835) |
|
(3,663) |
|
(6,292) |
Net cash inflow (outflow) before financing |
32,724 |
|
(5,072) |
|
(17,881) |
|
|
|
|
|
|
Financing |
|
|
|
|
|
Purchase of ordinary shares for cancellation |
(369) |
|
- |
|
(731) |
Increase (decrease) in cash |
32,355 |
|
(5,072) |
|
(17,881) |
|
|
|
|
|
|
Reconciliation of return on ordinary activities before finance costs and taxation to net cash flow from operating activities |
|
|
|
|
|
|
|
|
|
|
|
Total return before finance costs and taxation |
28,076 |
|
12,207 |
|
21,145 |
Add: Net (gains) on investments at fair value |
(24,263) |
|
(8,482) |
|
(14,137) |
Add: Special dividends credited to capital |
491 |
|
1,182 |
|
1,348 |
Add: Effective yield amortisation |
(2) |
|
(104) |
|
(216) |
Less: Stock dividends received as income |
(60) |
|
- |
|
(39) |
Less: Net (gains) on foreign currency |
(20) |
|
(24) |
|
(27) |
Less: Overseas tax suffered |
(224) |
|
(180) |
|
(320) |
|
|
|
|
|
|
|
3,998 |
|
4,599 |
|
7,754 |
|
|
|
|
|
|
Decrease (increase) in debtors |
39 |
|
(301) |
|
(190) |
Increase (decrease) in creditors |
358 |
|
(27) |
|
- |
Net cash inflow from operating activities |
4,395 |
|
4,271 |
|
7,564 |
|
|
|
|
|
|
Reconciliation of net cash flow to movement in net debt |
|
|
|
|
|
Net cash (outflow) inflow |
32,355 |
|
(5,072) |
|
(17,881) |
Net gains (losses) on foreign currency |
20 |
|
24 |
|
27 |
Decrease in long term loans |
130 |
|
122 |
|
244 |
Movement in net funds (debt) |
32,505 |
|
(4,926) |
|
(17,610) |
Net debt brought forward |
(50,424) |
|
(32,814) |
|
(32,814) |
Net debt carried forward |
(17,919) |
|
(37,740) |
|
(50,424) |
NOTES
Note 1
The returns per ordinary share have been calculated using a weighted average number of shares in issue of 43,079,819 (periods to: 31 May 2014 - 43,089,418 shares; 30 November 2014 - 43,089,418 shares).
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 which amounted to £41,000
(periods to: 31 May 2014 - £100,000; 30 November 2014 - £232,000) and transaction costs on sales which amounted to £23,000 (periods to: 31 May 2014 - £35,000; 30 November 2014 - £61,000).
Note 3
Investments are designated as held at fair value through profit or loss in accordance with FRS 26 'Financial Instruments: Recognition and Measurement'. Listed investments are valued at bid market prices.
Note 4
In accordance with FRS21 '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.
Dividends payable on ordinary shares in respect of earnings for each period are as follows:
|
Six months ended 31 May 2015 £'000s |
Six months ended 31 May 2014 £'000s |
Year ended 30 November 2014 £'000s |
Final dividend 5.70p paid 26 March 2015 (2014 - 8.50p) |
2,456 |
3,663 |
3,663 |
First Interim dividend 3.00p paid 27 June 2014 |
- |
- |
1,293 |
Second Interim dividend 3.10p paid 22 September 2014 (2013 - 6.00p) |
- |
- |
1,336 |
Third Interim dividend 3.20p paid 19 December 2014 |
1,379 |
- |
- |
|
3,835 |
3,663 |
6,292 |
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 ended 31 May 2015 £'000s |
Six months ended 31 May 2014 £'000s |
Year ended 30 November 2014 £'000s |
First Interim dividend 3.20p payable 30 June 2015 (2014 - 3.00p) |
1,377 |
1,293 |
- |
Second interim dividend 3.20p payable 21 September 2015 (2014 - 3.10p) |
1,377 |
1,336 |
- |
Third Interim proposed dividend |
- |
- |
1,379 |
Final dividend 5.70p |
- |
- |
2,456 |
|
2,754 |
2,629 |
3,835 |
The final and interim dividends above are based on the number of shares in issue at the period end. However, the dividend payable will be based upon the number of shares in issue on the record date and will reflect any purchase or cancellations of shares by the company settled subsequent to the period end.
Note 5
The directors believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements, as the assets of the company consist mainly of securities which are readily realisable and accordingly, that the company has adequate financial resources to continue in operational existence for the foreseeable future.
Note 6
The half yearly report has neither been audited nor reviewed by the company's auditors. The financial information for the year ended 30 November 2014 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and restated by reference to the changes in accounting policies detailed above. The auditor's report on those accounts was unqualified and did not contain a statement under either section 498(2) or (3) of the Companies Act 2006.
The half yearly financial report will be sent to shareholders in early August 2015 and will be available to members of the public from the company's registered office at 199 Bishopsgate, London EC2M 3TY.