Final Results

Jupiter Second Enhanced Inc.Tst.PLC 23 December 2005 JUPITER SECOND ENHANCED INCOME TRUST Plc Preliminary announcement of the audited results for the period ended 31st October 2005. CHAIRMAN'S STATEMENT In my annual Chairman's Statement it gives me great pleasure to present your Company's first financial statements for the period ended 31st October 2005. The net asset value of your Company's Geared Income shares rose by 18.5 per cent. over the period under review from 39.60p per share at launch to 46.94p. This compares with the performance of the Company's benchmark, the FTSE All-Share Index, which appreciated by 16.0 per cent. (in capital terms) over the same period. After taking into account the dividends paid to Geared Income shares in respect of the period, their total return has been 26.2 per cent., which compares with a total return on the FTSE All-Share of 20.3 per cent. over the same period. The Company's ungeared packaged units (each comprising one Geared Income share and one Zero Dividend Preference share) achieved an increased net asset value of 11.9 per cent. since inception (and a total return of 15.0 per cent. after taking into account dividends declared in respect of the period). Your Company has been able to declare dividends totalling 3.05p per Geared Income share for the period under review, which is above the estimated dividend of between 2.8p and 3.0p outlined in the launch Prospectus. It is anticipated that next year UK listed companies will provide strong dividend growth and will continue to provide opportunities for income generation, offering good prospects for dividend returns to shareholders. As outlined in the Manager's Review, which follows this Statement, there is a balance to be struck and investments will be made not solely in relation to income but also with regard to sound financial management by the companies in which we invest. In 2006 we hope to smooth the levels of the Company's quarterly interim dividends to the extent practicable. As I reported in the Company's Interim Report, the Company was offered as a recommended rollover vehicle for the shareholders in Martin Currie Enhanced Income Investment Trust plc at the end of its life on 30th June 2005. The offer received support from shareholders in the Martin Currie trust and, as a result, some £7.3m was rolled over into the Company. We issued approximately 13.3m new shares as a result of this rollover, thereby increasing the Company's liquidity on the London Stock Exchange. I would like to take this opportunity, on behalf of the Board, to welcome these new investors as shareholders in the Company. We will continue to seek such opportunities to expand the Company if it is thought that it would be of benefit to our shareholders. Turning to the business of the Annual General Meeting we are seeking to renew powers to buy back shares for cancellation. This can be a useful tool in both enhancing the net asset value of Geared Income shares and/or, enhancing the cover on Zero Dividend Preference shares and managing the liquidity of both classes of shares on the London Stock Exchange. This power will only be exercised after taking into consideration the interests of both classes of the Company's shares at the time that any such opportunity arises. As this is the first Annual General Meeting of the Company, all of the Directors are seeking election at this meeting. In conclusion, the Company has performed well in its first year despite a number of uncertainties in both the UK and Global markets concerning oil and gas prices and sluggish economic growth. Your Board remains confident that the performance of your Company can be sustained in 2006. Jimmy West Chairman 23rd December 2005 MANAGER'S REVIEW The Company has performed well during the period under review declaring four interim dividends of 0.45p, 1.0p, 0.45p and 0.70p and a special dividend of 0.45p amounting to a total dividend of 3.05p for the financial period. Revenues after tax for the period amounted to £1,899,000. Equities have performed substantially better than either cash or bonds over the year. Within the equity market the strongest returns have been made in the mid-cap stocks while smaller capitalisation companies have performed in line with the market as a whole. Among the constituent sectors mining and oil have made the strongest relative contribution to the All-Share's performance while in relative terms the worst negative contribution was made by the telecom sector, closely followed by the banking sector. Market Review The UK stock market has made excellent progress during the first year of the Company's life. The FTSE All-Share Index rose by 16.0 per cent. to 2,664.40 during the period under review - a strong performance considering the weakening economic picture, both in the UK and overseas. The UK economy has not performed well over the past year and the Chancellor has been forced to halve his growth forecasts for the fiscal year ending 4th April 2006 to just 1.75per cent. There has been some public dispute over the root cause for the economy's poor performance but the price of fuel has undoubtedly been a factor as for much of the past six months crude oil has been priced above $60 a barrel. Other factors affecting the economy have been the lag effects of the interest rate rises in 2004 and higher levels of taxation. The global economic picture has also weakened, acting as a further drag on the UK's economic performance and investor sentiment. Of particular concern to investors over the year has been the increasing interest rate environment in the US and the effect this will have on consumer spending. Despite these economic pressures, the UK stock market has made progress during the year. The market did suffer significant setbacks in April and October as concerns about the global economic picture took hold. It is, however, notable that on both occasions, investors used these corrections to buy back into equities at more attractive levels. Since 31st October 2005 the FTSE 100 has shrugged off these UK economic worries to climb above 5500 although the better performance has tended to be among those companies with a high degree of international exposure. The oil and mining sectors, driven by the high commodity prices, have led the market. Meanwhile, consumer goods producers have suffered due to a higher cost base and the retail sector within the UK has suffered from the decline in the consumer's willingness to spend, especially on credit. There are early signs that the worst of the cutback in consumer spending may have passed, spurred perhaps by recent stronger data from the housing market, but their sales over Christmas will determine whether this is actually the case. The stock market's strong performance has largely been driven by the continued strength in corporate balance sheets. Many companies have been reporting excellent profits growth and have been using this cashflow to return cash to shareholders through increased dividend payments and to embark on acquisitions. The low cost of debt has also encouraged merger and acquisition activity from private equity houses, seeking to buy good quality companies at attractive prices. Meanwhile, a number of new companies have come to the market, albeit offering limited dividend prospects at this stage. The forecast for dividend growth within the UK market is healthy and, despite higher valuations, there remain attractive opportunities within higher yielding stocks. Notable acquisitions were made in Vodafone, Diageo, BBA Group, Pearson, and Premier Farnell. Disposals made during the period included Premier Foods, Bovis Homes Group, Raymarine and Gallaher Group. Outlook The current Treasury economic forecast for 2006 predicts that economic growth will recover slightly from this year's levels before making more substantive gains in 2007. It appears that the intention is to slow significantly the growth of public expenditure rather than to introduce the substantial increases in taxation that some had predicted. The outlook for interest rates is probably biased towards increases - the quarter point cut in August has not yet been followed up, and with the housing market apparently strengthening as well as OPEC's declared satisfaction with a crude oil price above $50 a barrel, energy prices are unlikely to come down. These factors all point to rising rates. Despite these economic concerns, we are not bearish on the outlook for the UK stock market. While some companies will suffer from the downturn in economic growth, the overall trend for healthy profits growth remains in place. Equities, in our view, continue to look more attractive than other asset classes - cash, bonds and property - and within that, UK equities remain on attractive valuations. We are likely, therefore, to see a continuation of the merger and acquisitions activity that has driven markets higher during the past year. Nonetheless through merger and acquisition activity by private equity houses, the tendency for companies with strong levels of free cashflow to be taken private is a frustration to those looking to generate income returns from the stock market. Dividend forecasts for the UK market remain strong and, therefore, the availability of stocks with high levels of income distribution should remain good. But we would maintain that simply seeking out those companies that pay high dividends is not the route to success. Investors need to select businesses with strong balance sheets, cash flow, quality managements and attractive valuations to make money. While strong dividend growth is good news for income investors, we do believe companies need to balance that with the need to reinvest in their own businesses. As investors we have to be aware that the focus on growing dividends could, in some cases, damage a business's longer term growth prospects. For many companies, however, it reflects the fact that outsourcing their operations overseas means that the requirement to reinvest to the same degree as in the past, is simply not there. Tony Nutt Manager Jupiter Asset Management Limited Statement of Total Return (Incorporating the Revenue Account) for the period 17th August 2004 to 31st October 2005 Revenue Capital Total £'000 £'000 £'000 -------- -------- -------- Realised gains on investments - 2,148 2,148 Unrealised appreciation of investments - 4,867 4,867 -------- -------- -------- Total capital gains on investments - 7,015 7,015 Income 2,901 - 2,901 Investment management fee (643) - (643) Investment performance fee - (560) (560) Other expenses (352) - (352) -------- -------- -------- Return on ordinary activities before finance costs and taxation 1,906 6,455 8,361 Interest payable (6) - (6) -------- -------- -------- Return on ordinary activities before taxation 1,900 6,455 8,355 Tax on ordinary activities (1) - (1) -------- -------- -------- Return on ordinary activities after taxation 1,899 6,455 8,354 Dividends in respect of equity shares (1,789) - (1,789) Other appropriations in respect of non-equity shares - (2,528) (2,528) -------- -------- -------- Transfer to reserves 110 3,927 4,037 ======== ======== ======== Return per Geared Income share 3.25p 6.73p 9.98p The revenue column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period. The financial information does not constitute 'accounts' as defined in section 240 of the Companies Act 1985. The Company was incorporated on 17th August 2004 and its shares were listed on the London Stock Exchange on 1st November 2004, on which date it commenced business. Consequently, the Statement of Total Return above reflects the returns from 1st November 2004 to 31st October 2005. Balance Sheet at 31st October 2005 £'000 --------- Fixed asset investments 69,220 Investments --------- Current assets 133 Debtors 1,544 Cash at bank --------- Creditors: amounts falling due within one year 1,677 (1,814) --------- Net current liabilities (137) --------- Total assets less current liabilities 69,083 --------- Capital and reserves 1,256 Called up share capital 7,180 Share premium 54,082 Special reserve (940) Capital reserve - realised 4,867 Capital reserve - unrealised 2,528 Redemption reserve 110 Revenue reserve Total shareholders' funds 69,083 ========= Total shareholders' funds are attributable to: 29,487 Equity shareholders 39,596 Non-equity shareholders ________ 69,083 --------- Net asset value per share 46.94p Geared Income 63.03p Zero Dividend Preference Cash Flow Statement for the period from 17th August 2004 to 31st October 2005 £'000 --------- Operating activities 2,028 Net cash inflow from operating activities --------- Servicing of finance (6) Interest paid --------- Net cash outflow from servicing of finance (6) --------- Taxation (5) Net tax paid --------- Capital expenditure and financial investment (80,037) Purchase of fixed asset investments 18,395 Sale of fixed asset investments --------- Net cash outflow from capital expenditure and financial investment (61,642) Equity dividends paid (1,349) --------- Net cash outflow before financing (60,974) --------- Financing 63,470 Share issue (952) Cost of share issue --------- Net cash inflow from financing 62,518 --------- Increase in cash 1,544 ========= NOTES: 1. Income 17th August 2004 to 31st October 2005 £'000 Income from investments UK dividend income (net) 2,618 Dividends from overseas companies 68 Bond interest 19 _______ 2,705 Other income Deposit interest 188 Underwriting commission 8 _______ Total income 2,901 ====== Total income comprises: Dividends 2,686 Interest 207 Other income 8 _______ 2,901 ====== Income from investments Listed in the UK 2,705 Listed overseas _______ 2,705 ====== 2. Reconciliation of consolidated operating profit to net cash inflow from operating activities Group £'000 Net revenue before finance costs and taxation 1,906 Increase in prepayments and accrued income (129) Increase in other creditors and accruals 811 Performance fee charged to capital (560) ______ 2,028 3. Analysis of changes in net cash Cashflow 31stOctober 2005 £'000 £'000 Cash: Cash at bank 1,544 1,544 Reconciliation of net cash flow to movement in net debt £'000 Increase in cash for the year 1,544 4. Reconciliation of movements in shareholders' funds 31st October 2005 £'000 New share capital subscribed 63,470 Cost of share issue (952) Revenue return 1,899 Dividends (1,789) Capital return 6,455 ----------- Closing shareholders' funds 69,083 ----------- The preliminary announcement is prepared on the same basis as set out in the statutory accounts of the period ended 31st October 2005 and was approved by the Board of Directors on 23rd December 2005. The above financial information does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The Auditors have reported on the statutory accounts for the period ended 31st October 2005; their report was unqualified and did not contain statements under S237(2) or (3) of the Companies Act 1985. Statutory accounts for the period ended 31st December 2005 including an unqualified audit report will be delivered to the Registrar of Companies before the 31st December 2005. The interim report will be sent to all registered shareholders and copies may be obtained from the registered office of the Company at 1 Grosvenor Place, London, SW1X 7JJ By order of the Board Jupiter Asset Management Limited Secretaries Enquiries: Richard Pavry Jupiter Asset Management Limited 020 7412 0703 This information is provided by RNS The company news service from the London Stock Exchange

Companies

Jadestone Energy (JSE)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today