Annual Financial Report

RNS Number : 6749M

Utilico Investments Limited

19 September 2012

 



Date:                19 September 2012

Contact:           Charles Jillings                                              

                        Utilico Investments Limited                             

                        01372 271 486                                               

Utilico Investments Limited

Audited Statement of Results

for the year to 30 June 2012

Financial Highlights

·     Revenue return per ordinary share 11.99p (7.65p)

·     Capital return per ordinary share 2.73p (26.05p)

·     Total return per ordinary share 14.72p (33.70p)

·     Ordinary dividend per share 7.00p (6.50p plus a special dividend of 1.75p per share)

·     Cash raised from ZDP share placings of £41.2m

              Figures in brackets are for the prior year

CHAIRMAN'S STATEMENT

I am pleased to report that Utilico Investments Limited ("Utilico" or "the Company") achieved a total return per ordinary share of 7.3% in the twelve months to 30 June 2012. This is a good performance in challenging markets and ahead of the FTSE All-Share Total Return Index, which declined 3.1% over the twelve months.

Since August 2003 Utilico's net asset value ("NAV") per ordinary share plus cumulative dividends of 28.45p has increased 139.4%, resulting in an average annual compound total return per ordinary share of 10.8%. The FTSE All-Share Total Return Index achieved a 7.5% compound annual growth during the same period. The increase in Utilico's NAV over the twelve months under review was driven by continued gains on the portfolio, which amounted to £13.4m at 30 June 2012.

Much of the portfolio gains were from Resolute Mining Limited ("Resolute") and Infratil Limited ("Infratil") whose share prices were up 16.0% and 12.5% respectively. Resolute continues to make progress improving gold production and lowering average cash cost per ounce. Having seen its share price rise to A$2.30 it was unfortunate that the events in Mali weakened its market value considerably. The weakness in gold prices have also contributed to the recent share price setbacks. While Resolute looks good value longer term, the short term is likely to remain volatile.

The decision was taken to reduce the investment in Infratil which had risen to 25.7% of Utilico's portfolio as at 30 June 2011. During the year the Investment Manager placed out 20.0m Infratil shares representing 17.6% of the shareholding. This realised £28.2m for Utilico. At 30 June 2012 Utilico's holding in Infratil represented 20.4% of the portfolio.

The revenue income has risen strongly to £15.9m mainly as a result of substantial dividend distributions from our unlisted transport ticketing related investments. This, together with reduced funding costs, has resulted in the revenue earnings per share ("EPS") rising to 11.99p in the twelve months to 30 June 2012 (June 2011: 7.65p). The Directors have decided to declare a final dividend of 3.50p, making a total of 7.00p for the year (2011: 6.50p per share plus a special dividend of 1.75p per share). The revenue reserves carried forward are 7.85p per ordinary share, excluding the final declared dividend of 3.50p.

Utilico has secured an increased £50.0m bank facility with its existing bankers, Scotiabank Europe plc, with a maturity date of 22 March 2014. This is a positive step and reflects well on Utilico's relationship with Scotiabank.

Utilico is seeking to place out further 2018 ZDP shares next month. The funds raised from the issue of these shares, together with the increased bank facility, will give us flexibility in funding the redemption of the 2012 ZDP shares, which is due on 31 October 2012.

I would like to thank the Directors for their contribution and valued input and support, especially in these difficult markets.

Outlook

Most of our investee companies continue to make good progress with improving results. The economic challenges which we have outlined over the last three years remain a deep concern. A number of developed markets remain overleveraged both at a bank and sovereign level with artificially low interest rates, weakening economic activity and high political and central bank intervention. However, our portfolio looks well positioned to meet these challenges and deliver value longer term.

Dr R J Urwin
19 September 2012

INVESTMENT MANAGER'S REPORT

Utilico has performed well over the last twelve months achieving a total return of 7.3% in the year to 30 June 2012. This is ahead of the FTSE All-Share Total Return Index which was down 3.1% over the twelve months.

Since the inception of Utilico Investment Trust plc in August 2003, Utilico's total return (NAV per share adding back dividends and other distributions) has increased by 139.4%. This equates to an average annual compound return of 10.8% per annum. This compares well with the FTSE All-Share Total Return Index which has a compound average annual growth rate of 7.5% over the same period.

The last year has seen the markets' volatility increase with risk on to risk off back to risk on positions resulting in many asset classes and exchange rates showing significant movements over short time frames. This has clearly been challenging to most investors.

Portfolio

Utilico's portfolio continues to reflect a strong bias towards infrastructure and utilities, although the move away from this theme continued in the twelve months to 30 June 2012. Gold mining increased from 22.0% to 26.0% and we invested further into Oil & Gas, which expanded to 5.0% at year end. Over time and in line with the widened investment mandate, this increased diversity is expected to continue.

During the year we invested £47.5m. This included investing £6.8m into Resolute and £1.2m into Bermuda Commercial Bank Limited ("BCB"), both on the exercise of options held by Utilico. Utilico made purchases of £2.8m in Renewable Energy Generation Ltd ("REG") and £8.2m in Vix Group ("Vix") following the settlement of the litigation surrounding the Sydney ticketing contract. In addition, Utilico invested £10.0m in NZ Oil and Gas Company Ltd ("NZOG"), a new investment in the portfolio.

Disposals amounted to £45.3m and included £28.2m from the reduction of Utilico's position in Infratil and £1.6m from a reduction in Utilico's position in Jersey Electricity plc ("JEL").

There was minimal change in the geographic allocation of the portfolio as a result of the purchases and sales during the year. Gold mining was up 4.0% to 26.0%, mainly due to share price gains of Resolute and New Zealand reduced by 2.0% to 19.0% mainly as a result of the Infratil disposals.

On a sectoral basis gold mining was up 4.0% and renewables reduced from 19.0% to 13.0% as a result of the Infratil disposal and its renewables exposure.

At the year-end Utilico held unlisted and untraded investments of £32.3m, equal to 7.4% of gross assets. These types of investments amounted to £30.7m or 7.5% at 30 June 2011, £39.2m or 11.7% in 2010 and £49.8m or 17.2% in 2009.

Major Investments

Utilico's three largest investments Resolute, Utilico Emerging Markets Limited ("UEM") and Infratil accounted for 69.1% of the gross assets. This was a marginal reduction from 71.8% last year. Adding back realisations and dividend income (totalling £34.8m) these three investments returned 14.6% last year.

Resolute is now our largest holding at £110.7m. This has arisen as a result of additional investment of £6.8m and gains of £13.5m. Resolute continues to make significant progress and looks well placed to deliver further gains to investors.

WhilstUEM outperformed the markets during the twelve months to 30 June 2012, the value of the holding in UEM reduced by £1.9m, which was a reduction of 2.0% on the opening position of £97.3m. UEM's NAV total return in its financial year to 31 March 2012 was 3.1%, while the MSCI Emerging Markets Total Return Index (GBP adjusted) performance over that period was a negative 8.2%. UEM has been a top quartile performing closed-end investment fund over one and three years, a credible performance in these volatile markets. During the year, UEM migrated to the main market of the London Stock Exchange and was included in several indices including the FTSE 250 All-Share Index.

Infratil performed well during the year with its share price appreciating from NZ$1.80 to NZ$2.03, an increase of 12.8%. Added to the stronger New Zealand Dollar, those gains amounted to £22.2m in our portfolio. In addition, Infratil paid a dividend of 8.0¢ resulting in a payment to Utilico of £3.3m. During the year we reduced our holding by 17.6% through a placing to a US institution and to Infratil's investment manager. This resulted in a return of £28.2m to Utilico.

As with prior years, we have reviewed the major sectors that Utilico is exposed to, and the major holdings therein. In order to provide a better understanding of Utilico's underlying investments, the ten largest holdings and the sector and geographical analysis are presented on a "look through" basis as though investments held indirectly through Infratil and UEM were held on a proportionate basis directly by Utilico itself. We have only looked at subsectors of investments in the top ten. Further details on the top ten investments are set out on pages  13 to 17.

Gold mining - 26%

Our sole investment in gold mining is in Resolute. Resolute continues to make significant progress at an operational level. For the year to 30 June 2012 Resolute reported increased gold sales up 30% to A$576.7m and saw net profit rise to A$105.1m up 76% on the previous year. A strong increase in production at its Syama mine in Mali enabled the average cost of production to decrease in the year to A$761 per ounce. At the same time the average gold price realised was A$1,627 per ounce. At end-December 2011 Resolute completed a balance sheet restructuring with the exercise of its convertible bonds, dramatically reducing outstanding debt. Since that point it has initiated a share buyback program, buying back 21.3m shares for A$31.9m as at 30 June 2012. In July 2012, Resolute forecast that production would rise to 415,000 ounces at an average net cost of A$830 per ounce for the year to 30 June 2013.

In March 2012 a military coup was staged in Mali, which resulted in the resignation of President Toure and the Tuareg insurgency in Northern Mali. This has led to a significant decline in Resolute's share price, notwithstanding the fact that its Syama mine is in the far south of the country and operations were, and continue to be, unaffected by the civil unrest. Resolute's total market capitalisation is A$856m and its net cash, not including restricted cash, is A$43.1m. We continue to regard Resolute as being fundamentally undervalued.

Renewables - 13%

Climate change commitments for reducing greenhouse gases within the decade are prevalent in energy policy. This is at a time when support for nuclear energy has diminished in many major economies. While the poor economic backdrop in many developed countries (particularly Europe) has increased uncertainty over renewable subsidies, we continue to see the sector as offering attractive investment opportunities.

Utilico's main exposure to renewables is through TrustPower Limited ("TrustPower") and Renewable Energy Generation Limited ("REG").

TrustPower continues to make sound progress, delivering earnings growth of 17.4% in the twelve months to March 2012. The company has steadily increased generation capacity, and currently operates 730MW of hydro and wind capacity in New Zealand and Australia. TrustPower is well underway in progressing the 270MW Snowtown II wind farm project in Australia which will significantly increase its generating capacity in the medium term.

REG continues to make strong operational progress. During the year to 30 June 2012 REG increased its wind generation capacity by 24% to 51.2MW, which is expected to deliver another 28,500MWh per annum. Significantly, REG reported an increase in EBITDA and maiden bottom-line profits in its six-month results to December 2011. REG continues to add to its consented portfolio, with another 10MW wind capacity due to be commissioned during the year to June 2013. REG's current market capitalisation is only £47.1m, which we believe substantially undervalues the business given the installed asset base and prospective cash flow of these assets.

Electricity - 11%

Jersey Electricity plc ("JEL") has been experiencing tough operating conditions as a lack of tariff increases resulted in its normalised earnings falling by 12.3% in the year to September 2011 and by 7.3% in the six months to March 2012. While a tariff increase of 2.9% was implemented in May 2012, we remain concerned about the company's ability to procure an adequate return on new investments - notably JEL's proposals to build a third electricity interconnector to France at a cost of £60m. Indeed the recent outage of its oldest interconnector could require the company to rely more heavily on more expensive backup diesel generators until 2015. We are disappointed that the regulatory environment has not provided a clear investment framework to mitigate these issues, and ensure adequate long-term investment and returns in the Jersey electricity market. In our view JEL remains stubbornly undervalued with a market cap of £98m, inferring an EV/EBITDA multiple of only 4.1x and JEL should address this with more shareholder-friendly policies.

Infratil Energy Australia Pty Ltd ("IEA") has delivered a strong performance during the year. Customer numbers grew by 11% on last year to 457,000, and generation capacity increased by 3.6% to 285MW. This saw profits rise strongly to A$50m, up 16.3%. A very solid result.

Infrastructure IT - 5%

Vix Group - comprising Vix Technology (Australia) Pty Ltd and Vix Technology (Bermuda) Ltd ("Vix") has made progress over the last twelve months. The court case in Sydney, Australia has been settled and the mobility business and OneLink Company have been boosted by the extension of the OneLink contract. OneLink runs the Melbourne transport ticketing system. The board of "Mobility" has also been strengthened with the addition of Graham Cole (Chairman of AgustaWestland Helicopters) who is now non-executive Chairman of Vix. Cash of A$11.3m has been returned to shareholders (A$4.5m to Utilico) and new investments have been made by Vix in CloudTc and Mastersoft. Utilico made investments of A$12.3m into Vix during the year to 30 June 2012 mainly to fund the settlement and court costs.

Airports - 5%

Wellington International Airport Ltd ("WIAL") performed solidly over the year, seeing passenger numbers increase by 1.2%, with international growth benefiting from the Rugby World Cup and expanded service offering from Air NZ and Qantas. Domestic passenger growth however remained flat.

During the course of the year, the company also finalised a new schedule of aeronautical prices for the next five years, which will ensure that Wellington remains competitive among its peers.

Financial Services - 5%

Bermuda Commercial Bank Limited ("BCB"), established in 1969, is one of Bermuda's four licensed banks and is regulated by the Bermuda Monetary Authority. It is Bermuda's only bank focused purely on corporate and private wealth clients, offering a range of financial solutions. Utilico holds 34.0% of BCB's ordinary shares. BCB has made good progress this year in a challenging environment and recorded a profit in the year to 30 September 2011 of US$2.6m and in the half year to 31 March 2012 a profit of US$3.2m, with shareholders funds of US$93.6m. Significant steps continue to be made in strengthening the operating environment and capabilities of the bank, including developing software systems, as well as continuing to expand its product offering.

BCB has an enviable balance sheet and strong capital ratios resulting in a Tier 1 capital adequacy ratio as at 31 March 2012 of 25.5%.

Oil and Gas - 5%

Z Energy Limited ("Z Energy") is the company that owns and manages the former Shell New Zealand downstream assets, acquired by Infratil in 2010. We expect Z Energy to achieve above average returns over the coming few years.

New Zealand Oil & Gas Limited ("NZOG") is an independent New Zealand oil and gas exploration and production company. NZOG has exposure to two low cost production assets in New Zealand: the Kupe gas and oil field (15% partner) and Tui area oil fields (12.5% partner). In addition, NZOG also has an exploration portfolio in New Zealand and in other regions in the world, including Indonesia and Tunisia. NZOG has substantial cash reserves to fund its exploration programme, provided that the company is able to find the right joint venture partners to reduce the financial risk of any one drilling programme being unsuccessful. In the year to 30 June 2012, NZOG reported revenue increases of 9.3% and net income of NZ$19.9m, against a loss of NZ$(76.5m) in the previous year.

Derivatives

Over the years there have been two parts to Utilico's derivatives position. First, portfolio derivatives, mainly through S&P500 Index options. Second, currency positions within Utilico's portfolio. Utilico's S&P500 Index market position has been increased in the year under review although it remains modest. Utilico has maintained significant currency positions to partially protect the Sterling value of certain investments. At the period end, forward currency sale contracts were in place for nominal NZ$101.0m, €11.9m and A$11.3m.

Debt

The level of bank debt utilised by Utilico reduced to nil by 30 June 2012, down from £31.0m at the previous year-end. Since the year-end the Company has negotiated an increase in the bank facility with Scotiabank Europe plc from £30.0m to £50.0m, with an expiry date in March 2014.

ZDP Shares

In December 2011 Utilico Finance Limited offered holders of the 2012 ZDP shares the opportunity to elect to roll part of their investment into new 2018 ZDP shares. This offer closed on 13 January 2012 with holders of 6.1m 2012 ZDP shares electing to roll into the 2018 ZDP shares. The Company issued £11.9m 2018 ZDP shares for cash to new investors and placed 10.0m 2014 ZDP shares and 10.0m 2016 ZDP shares raising £29.3m. The cash raised from the issue of 2014, 2016 and 2018 ZDP shares of £40.2m was used to reduce the bank debt at that time to nil.

The remaining 39.3m 2012 ZDP shares will be redeemed on 31 October 2012 for cash. The redemption cost net of the 1.26m 2012 ZDP shares held by Utilico is £67.6m. Utilico has authorised capacity to place a further 27.6m 2018 ZDPs which, together with the increased bank facility of £50.0m, can be used to meet the 2012 redemptions.

Revenue Returns

The revenue returns are up significantly in the twelve months to 30 June 2012 compared to the prior year, as a result of the dividend distributions from Utilico's unlisted transport ticketing related investments. Other dividends remained strong, with UEM increasing its dividends to Utilico by 5.8% to 5.5p per UEM share and Infratil increasing its dividends by 18.5% to 8.0c per Infratil share.

Management and administration fees and other expenses increased as a result of higher gross assets. Finance costs decreased as a result of reduced usage of the bank facility.

The combined effect of the above resulted in the revenue EPS increasing by 56.7% from 7.65p to 11.99p.

Capital Return

Capital returns reduced to £2.7m versus £24.1m in the year to June 2011 mostly due to reduced gains on investments of £13.4m, compared to £50.2m in the year to June 2011. The resulting capital EPS return was 2.73p, down from 26.05p last year.

ICM Limited
Investment Manager
19 September 2012

PRINCIPAL RISKS AND RISK MITIGATION 

The Company's assets consist mainly of listed and quoted securities and its principal risks are therefore market related or currency related. The large number of investments held, together with the geographic and sector diversity of the portfolio, enables the Company to spread its risk with regard to liquidity, market volatility, currency movements, counter party and revenue streams. 

Other key risks faced by the Company relate to investment strategy, management and resources, regulatory issues, operational matters, financial controls and external events.

These risks, and the way in which they are managed, are described in more detail under the heading "Principal risks and risk mitigation" within the Report of the Directors contained within the Group's Report and Accounts for the year ended 30 June 2012. The Annual Report and Accounts is published on the Company's website, www.utilico.bm.

DIRECTOR'S STATEMENT OF  RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Accounts of the Group and Company in accordance with applicable Bermuda law and IFRSs, as adopted by European Union.

The Directors are required to prepare accounts for each financial period which present fairly the financial position, the financial performance and cash flows of the Group and the Company for that period. In preparing the accounts the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgements and estimates that are reasonable and prudent;

·      state whether IFRSs have been followed subject to any material departure disclosed and explained In the accounts; and

·      prepare the accounts on a going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Group and Company accounts comply with Bermuda law. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

To the best of the knowledge of the Directors: (i) the accounts which have been prepared in accordance with IFRS, as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group, including its special purpose entity included in the consolidation, and the Company; (ii) the Chairman's Statement and Investment Manager's report includes a fair review of development and performance of the business and the Report of the Directors contains a description of the principal risks and uncertainties that the Group and the Company face. The financial risks are also provided in note 31 to the accounts. 

Insofar as the Directors are aware:

• there is no relevant audit information of which the Company's auditor is unaware; and

• the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The accounts are published on the Company's website, www.utilico.bm, the maintenance and integrity of which is the responsibility of the Company. The work carried out by the auditor does not involve consideration of the maintenance and integrity of the website and accordingly, the auditor accepts no responsibility for any changes that have occurred to the accounts since they were originally presented on the website. Visitors to the website need to be aware that the legislation governing the preparation and dissemination of the accounts may differ from legislation in their jurisdiction.

Approved by the Board on 19 September 2012 and signed on its behalf by:

Dr R J Urwin

Chairman

consolidated PERFORMANCE SUMMARY

	30 June 2012	30 June 2011	Change 2011/12
Ordinary shares
Total return (annual) (1)	7.3%	24.2%	n/a
Annual compound total return (since inception)	10.8%	11.2%	n/a
Net asset value per ordinary share	209.67p	201.63p	4.0%
Share prices and indices
Ordinary share price	144.00p	147.25p	(2.2%)
Discount	31.3%	27.0%	n/a
FTSE All-Share Total Return Index	4,101	4,234	(3.1%)
Returns and dividends
Revenue return per ordinary share	11.99p	7.65p	56.7%
Capital return per ordinary share	2.73p	26.05p	(89.5%)
Total return per ordinary share	14.72p	33.70p	56.3%
Dividend per ordinary share	7.00p	8.25p(2)	(15.2%)
Zero dividend preference (ZDP) shares(3)
2012 ZDP Shares
Capital entitlement per ZDP share	173.52p	162.15p	7.0%
ZDP share price	175.50p	168.50p	4.2%
2014 ZDP Shares
Capital entitlement per ZDP share	142.33p	132.69p	7.3%
ZDP share price	154.00p	142.75p	7.9%
2016 ZDP Shares
Capital entitlement per ZDP share	142.33p	132.69p	7.3%
ZDP share price	148.50p	133.50p	11.2%
2018 ZDP Shares
Capital entitlement per ZDP share	103.03p	-	n/a
ZDP share price	104.00p	-	n/a
Warrants
2012 warrant price - expired 30 April 2012	-	0.55p	n/a
Equity holders funds (£m)
Gross Assets(4)	434.5	408.7	6.3%
Bank debt	-	30.9	n/a
ZDP shares	224.4	172.8	29.9%
Other debt	1.2	3.5	(65.7%)
Equity holders' funds	208.9	201.5	3.7%
Revenue account (£m)
Income	15.9	11.9	33.6%
Costs (management and other expenses)	3.0	2.9	3.4%
Finance costs	0.8	2.0	(60.0%)
Financial ratios of the Group
Revenue yield on average gross assets	4.0%	3.1%	n/a
Ongoing charges figure(5)	1.7%	2.0%	n/a
Bank loans, ZDP shares and other loans gearing on gross  assets	61.3%	50.7%	n/a

(1) Total return is calculated as change in NAV per ordinary share plus dividends re-invested.

(2) Includes special dividend of 1.75p per share

(3) Issued by Utilico Finance Limited, a wholly owned subsidiary of Utilico Investments Limited.

(4) Gross assets less current liabilities excluding loans and ZDP shares.

(5) Expressed as a percentage of average net assets. Ongoing charges comprise all operational, recurring costs that are payable by the Company or suffered within underlying investee funds, in the absence of any purchases or sales of investments.

GROUP STATEMENT of comprehensive income

	Year to 30 June 2012			Year to 30 June 2011
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	Return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Gains on investments	-	13,403	13,403	-	50,200	50,200
Gains/(losses) on derivative instruments	-	942	942	-	(12,960)	(12,960)
Exchange gains/(losses)	-	1,792	1,792	(1)	(1,594)	(1,595)
Investment and other income	15,850	-	15,850	11,935	43	11,978
Total income	15,850	16,137	31,987	11,934	35,689	47,623
Income not receivable	(126)	-	(126)	-	-	-
Management and administration fees	(2,022)	-	(2,022)	(1,796)	-	(1,796)
Other expenses	(928)	(7)	(935)	(1,085)	(13)	(1,098)
Profit before finance costs and taxation	12,774	16,130	28,904	9,053	35,676	44,729
Finance costs	(783)	(13,401)	(14,184)	(1,962)	(11,602)	(13,564)
Profit before taxation	11,991	2,729	14,720	7,091	24,074	31,165
Taxation	(21)	-	(21)	(18)	-	(18)
Profit for the year	11,970	2,729	14,699	7,073	24,074	31,147
Earnings per ordinary share (basic) - pence	11.99	2.73	14.72	7.65	26.05	33.70
Earnings per ordinary share (diluted) - pence	11.99	2.73	14.72	7.65	26.05	33.70

The total column of this statement represents the Group's Income Statement and the Group's Statement of Comprehensive Income, prepared in accordance with IFRS.

The supplementary revenue return and capital return are prepared under guidance published by the Association of Investment Companies in the UK.

The Group does not have any income or expense that is not included in the profit for the year, and therefore the 'profit for the year' is also the 'total comprehensive income for the year', as defined in International Accounting Standard 1 (revised).

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the Company. There are no minority interests.

COMPANY STATEMENT of comprehensive income

	Year to 30 June 2012			Year to 30 June 2011
	Revenue	Capital	Total	Revenue	Capital	Total
	return	return	return	return	return	return
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Gains on investments	-	13,338	13,338	-	45,113	45,113
Gains/(losses) on derivative instruments	-	1,002	1,002	-	(7,810)	(7,810)
Exchange gains/(losses)	-	1,772	1,772	-	(1,626)	(1,626)
Investment and other income	15,850	-	15,850	11,928	43	11,971
Total income	15,850	16,112	31,962	11,928	35,720	47,648
Income not receivable	(126)	-	(126)	-	-	-
Management and administration fees	(2,022)	-	(2,022)	(1,796)	-	(1,796)
Other expenses	(899)	(7)	(906)	(1,053)	(13)	(1,066)
Profit before finance costs and taxation	12,803	16,105	28,908	9,079	35,707	44,786
Finance costs	(783)	(13,388)	(14,171)	(2,028)	(11,602)	(13,630)
Profit before taxation	12,020	2,717	14,737	7,051	24,105	31,156
Taxation	(21)	-	(21)	(9)	-	(9)
Profit for the year	11,999	2,717	14,716	7,042	24,105	31,147
Earnings per ordinary share (basic) - pence	12.02	2.72	14.74	7.62	26.08	33.70
Earnings per ordinary share (diluted) - pence	12.02	2.72	14.74	7.62	26.08	33.70

The total column of this statement represents the Company's Income Statement and the Company's Statement of Comprehensive Income, prepared in accordance with IFRS.

The supplementary revenue return and capital return are prepared under guidance published by the Association of Investment Companies in the UK.

The Company does not have any income or expense that is not included in the profit for the year, and therefore the 'profit for the year' is also the 'total comprehensive income for the year', as defined in International Accounting Standard 1 (revised).

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the Company.

GROUP STATEMENT OF CHANGES IN EQUITY

for the year to 30 June 2012
	Ordinary	Share			Non-
	share	premium	Special	Warrant	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2011	9,993	30,250	233,866	3,049	32,069	(113,833)	6,083	201,477
Profit for the year	-	-	-	-	-	2,729	11,970	14,699
Ordinary dividends paid	-	-	-	-	-	-	(6,745)	(6,745)
Conversion of warrants	-	2	-	-	-	-	-	2
Transfer on cancellation of warrants	-	-	-	(3,049)	-	3,049	-	-
Shares purchased by the Company	(30)	(509)	-	-	-	-	-	(539)
Balance at 30 June 2012	9,963	29,743	233,866	-	32,069	(108,055)	11,308	208,894

for the year to 30 June 2011
	Ordinary	Share			Non-
	share	premium	Special	Warrant	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2010	8,637	223,501	10,365	3,050	32,068	(138,218)	4,317	143,720
Profit for the year	-	-	-	-	-	24,074	7,073	31,147
Ordinary dividends paid	-	-	-	-	-	-	(4,996)	(4,996)
Conversion of warrants	-	2	-	(1)	1	-	-	2
Transfer to special reserve	-	(223,501)	223,501	-	-	-	-	-
Issue of ordinary shares	1,356	30,867	-	-	-	-	-	32,223
Issue costs of ordinary share capital	-	(619)	-	-	-	-	-	(619)
Transfer on loss of control of subsidiary	-	-	-	-	-	311	(311)	-
Balance at 30 June 2011	9,993	30,250	233,866	3,049	32,069	(113,833)	6,083	201,477

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year to 30 June 2012
	Ordinary	Share			Non-
	share	premium	Special	Warrant	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2011	9,993	30,250	233,866	3,049	32,069	(113,938)	6,188	201,477
Profit for the year	-	-	-	-	-	2,717	11,999	14,716
Ordinary dividends paid	-	-	-	-	-	-	(6,745)	(6,745)
Conversion of warrants	-	2	-	-	-	-	-	2
Transfer on cancellation of warrants	-	-	-	(3,049)	-	3,049	-	-
Shares purchased by the Company	(30)	(509)	-	-	-	-	-	(539)
Balance at 30 June 2012	9,963	29,743	233,866	-	32,069	(108,172)	11,442	208,911

for the year to 30 June 2011
	Ordinary	Share			Non-
	share	premium	Special	Warrant	distributable	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserves	reserve	Total
	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s	£'000s
Balance at 30 June 2010	8,637	223,501	10,365	3,050	32,068	(138,043)	4,142	143,720
Profit for the year	-	-	-	-	-	24,105	7,042	31,147
Ordinary dividends paid	-	-	-	-	-	-	(4,996)	(4,996)
Conversion of warrants	-	2	-	(1)	1	-	-	2
Transfer to special reserve	-	(223,501)	223,501	-	-	-	-	-
Issue of ordinary shares	1,356	30,867	-	-	-	-	-	32,223
Issue costs of ordinary share capital	-	(619)	-	-	-	-	-	(619)
Balance at 30 June 2011	9,993	30,250	233,866	3,049	32,069	(113,938)	6,188	201,477

BALANCE SHEETs

At 30 June		GROUP		COMPANY
	2012	2011	2012	2011
	£'000s	£'000s	£'000s	£'000s
Non-current assets
Investments	423,243	407,560	432,165	408,005
Current assets
Other receivables	6,056	1,623	2,020	1,623
Derivative financial instruments	4,739	1,625	927	1,251
Cash and cash equivalents	8,246	1,293	7,908	1,206
	19,041	4,541	10,855	4,080
Current liabilities
Loans	(1,253)	(3,555)	(1,253)	(3,555)
Other payables	(5,437)	(1,362)	(231,813)	(174,108)
Zero dividend preference shares	(66,275)	-	-	-
Derivative financial instruments	(2,304)	(2,002)	(1,043)	(2,002)
	(75,269)	(6,919)	(234,109)	(179,665)
Net current liabilities	(56,228)	(2,378)	(223,254)	(175,585)
Total assets less current liabilities	367,015	405,182	208,911	232,420
Non-current liabilities
Bank loans	-	(30,943)	-	(30,943)
Zero dividend preference shares	(158,121)	(172,762)	-	-
Net assets	208,894	201,477	208,911	201,477
Equity attributable to equity holders
Ordinary share capital	9,963	9,993	9,963	9,993
Share premium account	29,743	30,250	29,743	30,250
Special reserve	233,866	233,866	233,866	233,866
Warrant reserve	-	3,049	-	3,049
Non-distributable reserve	32,069	32,069	32,069	32,069
Capital reserves	(108,055)	(113,833)	(108,172)	(113,938)
Revenue reserve	11,308	6,083	11,442	6,188
Total attributable to equity holders	208,894	201,477	208,911	201,477
Net asset value per ordinary share
Basic - pence	209.67	201.63	209.68	201.63

CASH FLOW STATEMENTs

for the year to 30 June		GROUP		COMPANY
	2012	2011	2012	2011
	£'000s	£'000s	£'000s	£'000s
Cash flows from operating activities	2,453	(3,919)	215	(3,874)
Cash flows from investing activities	-	-	-	-
Cash flows before financing activities	2,453	(3,919)	215	(3,874)
Financing activities
Equity dividends paid	(6,745)	(4,996)	(6,745)	(4,996)
Movement on loans	(31,551)	1,758	(31,551)	1,758
Cash flow from ZDP shares	(2,007)	-	-	-
Proceeds from warrants exercised	2	2	2	2
Proceeds from issue of ordinary shares	-	126	-	126
Proceeds from issue of zero dividend preference shares	40,240	-	40,240	-
Cost of share buy back	(539)	-	(539)	-
Cash flows from financing activities	(600)	(3,110)	1,407	(3,110)
Net increase/ (decrease) in cash  and cash equivalents	1,853	(7,029)	1,622	(6,984)
Cash and cash equivalents at the beginning of the year	1,293	6,495	1,206	6,362
Effect of movement in foreign exchange	1,733	1,827	1,713	1,828
Cash and cash equivalents at the end of the year	4,879	1,293	4,541	1,206

Comprised of:
Cash	8,246	1,293	7,908	1,206
Bank overdraft	(3,367)	-	(3,367)	-
Total	4,879	1,293	4,541	1,206

NOTES

The Directors have declared a final dividend of 3.50p per ordinary share in respect of the year to 30 June 2012 payable on 19 October 2012 to all ordinary shareholders on the register at close of business on 5 October 2012. The total cost of the dividend which has not been accrued in the results for the year to 30 June 2012, is £3,487,000 based on 99,632,214 ordinary shares in issue at the date of this report.

The Company is an investment company incorporated in Bermuda and listed on The London Stock Exchange.

The consolidated Accounts for the year to 30 June 2012 comprise the results of the Company and its subsidiary Utilico Finance Limited and its special purpose entity Global Equity Risk Protection Limited.

This statement was approved by the Board on 19 September 2012. It is not the Company's statutory accounts. The statutory accounts for the financial year to 30 June 2012 have been approved and audited, and received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The statutory accounts for the financial year to 30 June 2011 received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.

The Report & Accounts will be posted to shareholders in early October and are made available on the website www.utilico.bm. Copies may be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.

By order of the Board

ICM Limited, Secretary

19 September 2012

 

END

 

 

FR BKCDQQBKDACD