Final Results

RNS Number : 3875V

Value & Income Trust plc

28 May 2008

 



VALUE AND INCOME TRUST PLC

PRELIMINARY RESULTS 

FOR THE YEAR ENDED 31 MARCH 2008

SUMMARY 

	31 March 2008	31 March 2007
Net asset value per share valuing debt at par	251.0p	299.0p
Net asset value per share valuing debt at market value	222.7p	271.1p
Ordinary share price	166.0p	253.0p
Total interim dividend and proposed final dividend per share	7.4p	6.7p
Total assets less current liabilities	£151.8 million	£175.0 million

THE YEAR

• VIT's share price total return was -32.2% and 0.8%, compared with the FTSE All-Share Index total return of -7.7% and 31.3% over one year and three years, respectively, to 31 March 2008

• VIT's net asset value total return was -13.6% and 26.6% over one year and three years, respectively, to 31 March 2008

• Total dividends for the year are 7.4p, up 10.4% on the previous year - the twenty-first consecutive year of increase 

DIVIDEND

The Directors are recommending a final dividend of 3.7p per Ordinary Share be paid on 18 July 2008 to shareholders on the register as at 20 June 2008. The ex-dividend date is 18 June 2008.

OUTLOOK

Current UK equity yields look very good value with real dividend growth. High yielding medium-sized and smaller companies are particularly undervalued. Property's high income is also attractive.

For further information, please contact:-

Matthew Oakeshott or Angela Lascelles of OLIM Limited, Manager

www.olim.co.uk

Tel: [phone]

VALUE AND INCOME TRUST PLC

GROUP INCOME STATEMENT

For the year ended 31 March 2008

	Year ended			Year ended
	31 March 2008  (Unaudited)			31 March 2007  (Audited)
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment income
Dividend income	4,368	-	4,368	4,010	-	4,010
	________	________	________	________	________	________
Rental income	3,284	-	3,284	3,196	-	3,196
Interest income on short-term deposits	205	-	205	174	-	174
	________	________	________	________	________	________
Other operating income	3,489	-	3,489	3,370	-	3,370
	________	________	________	________	________	________
Total revenue	7,857	-	7,857	7,380	-	7,380
Gains and losses on investments
Realised gains on held-at-fair-value investments	-	5,451	5,451	-	9,073	9,073
Unrealised (losses)/gains on investments	-	(28,069)	(28,069)	-	10,363	10,363
	________	________	________	________	________	________
Total income	7,857	(22,618)	(14,761)	7,380	19,436	26,816
	________	________	________	________	________	________
Expenses
Investment management fees	(367)	(855)	(1,222)	(366)	(1,361)	(1,727)
Other operating expenses	(396)	-	(396)	(409)	-	(409)
Finance costs	(3,501)	-	(3,501)	(3,502)	-	(3,502)
	________	________	________	________	________	________
Total expenses	(4,264)	(855)	(5,119)	(4,277)	(1,361)	(5,638)
	________	________	________	________	________	________
(Loss) / profit before tax	3,593	(23,473)	(19,880)	3,103	18,075	21,178
Taxation	-	1,310	1,310	-	(713)	(713)
	________	________	________	________	________	________
(Loss) / profit for the period	3,593	(22,163)	(18,570)	3,103	17,362	20,465
	________	________	________	________	________	________
Earnings per ordinary share (pence)	7.89	(48.66)	(40.77)	6.81	38.12	44.93

The total column of this statement represents the Income Statement of the Group, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of Value and Income Trust PLC, the parent company. There are no minority interests.

VALUE AND INCOME TRUST PLC

COMPANY INCOME STATEMENT

For the year ended 31 March 2008

	Year ended			Year ended
	31 March 2008  (Unaudited)			31 March 2007  (Audited)
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment income
Dividend income	4,368	-	4,368	4,010	-	4,010
	________	________	________	________	________	________
Rental income	1,191	-	1,191	1,138	-	1,138
Interest income on short-term deposits	162	-	162	135	-	135
	________	________	________	________	________	________
Other operating income	1,353	-	1,353	1,273	-	1,273
	________	________	________	________	________	________
Total revenue	5,721	-	5,721	5,283	-	5,283
Gains and losses on investments
Realised gains on held-at-fair-value nvestments	-	5,451	5,451	-	8,183	8,183
Unrealised (losses)/gains on investments	-	(26,754)	(26,754)	-	10,477	10,477
	________	________	________	________	________	________
Total income	5,721	(21,303)	(15,582)	5,283	18,660	23,943
	________	________	________	________	________	________
Expenses
Investment management fees	(254)	(593)	(847)	(257)	(1,107)	(1,364)
Other operating expenses	(291)	-	(291)	(262)	-	(262)
Finance costs	(1,851)	-	(1,851)	(1,852)	-	(1,852)
	________	________	________	________	________	________
Total expenses	(2,396)	(593)	(2,989)	(2,371)	(1,107)	(3,478)
	________	________	________	________	________	________
(Loss) / profit before tax	3,325	(21,896)	(18,571)	2,912	17,553	20,465
Taxation	1	-	1	-	-	-
	________	________	________	________	________	________
(Loss) / profit for the period	3,326	(21,896)	(18,570)	2,912	17,553	20,465
	________	________	________	________	________	________
Earnings per ordinary share (pence)	7.30	(48.07)	(40.77)	6.39	38.54	44.93

The total column of this statement represents the Income Statement of the Company prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of Value and Income Trust PLC, the parent company. There are no minority interests.

VALUE AND INCOME TRUST PLC

BALANCE SHEET

AT 31 MARCH 2008

	Group (Unaudited)				Company (Audited)
	As at		As at		As at		As at
	31 March 2008		31 March 2007		31 March 2008		31 March 2007
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
ASSETS
Non current assets
Investments held at fair value through profit or loss		92,063		118,716		110,944		139,206
Investment properties held at fair value through profit or loss		51,000		54,525		18,100		18,800
		_______		_______		_______		_______
		143,063		173,241		129,044		158,006
Current assets
Cash and cash equivalents	9,609		2,266		9,102		1,780
Other receivables	562		1,556		560		1,543
	_______		_______		_______		_______
		10,171		3,822		9,662		3,323
		_______		_______		_______		_______
TOTAL ASSETS		153,234		177,063		138,706		161,329
Current liabilities
Other payables		(1,406)		(2,051)		(3,922)		(4,671)
		_______		_______		_______		_______
		151,828		175,012		134,784		156,658
Non-current liabilities
Debenture stock	(35,444)		(35,468)		(20,444)		(20,468)
Deferred tax	(2,044)		(3,354)		-		-
	_______		_______		_______		_______
		(37,488)		(38,822)		(20,444)		(20,468)
		_______		_______		_______		_______
		114,340		136,190		114,340		136,190
		_______		_______		_______		_______
EQUITY
Called up share capital		4,555		4,555		4,555		4,555
Share premium		18,446		18,446		18,446		18,446
Retained earnings		91,339		113,189		91,339		113,189
		_______		_______		_______		_______
		114,340		136,190		114,340		136,190
		_______		_______		_______		_______
Net Asset Value per ordinary share (pence)		251.02		298.99		251.02		298.99

VALUE AND INCOME TRUST PLC

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR

Group	Year ended 31 March 2008 (Unaudited)				Year ended 31 March 2007 (Audited)
	Share	Share	Retained	Total	Share	Share	Retained	Total
	capital	premium	earnings		capital	premium	earnings
	£000	£000	£000	£000	£000	£000	£000	£000
Net assets at 31 March 2007	4,555	18,446	113,189	136,190	4,555	18,446	95,685	118,686
Net (loss) / profit for the year	-	-	(18,570)	(18,570)	-	-	20,465	20,465
Dividends paid	-	-	(3,280)	(3,280)	-	-	(2,961)	(2,961)
	_________	_________	_______	_______	_______	_______	_______	_______
Net assets at 31 March 2008	4,555	18,446	91,339	114,340	4,555	18,446	113,189	136,190
	_________	_________	_______	_______	_______	_______	_______	_______
Company
	Year ended 31 March 2008 (Unaudited)				Year ended 31 March 2007 (Audited)
	Share	Share	Retained	Total	Share	Share	Retained	Total
	capital	premium	earnings		capital	premium	earnings
	£000	£000	£000	£000	£000	£000	£000	£000
Net assets at 31 March 2007	4,555	18,446	113,189	136,190	4,555	18,446	95,685	118,686
Net (loss) / profit for the year	-	-	(18,570)	(18,570)	-	-	20,465	20,465
Dividends paid	-	-	(3,280)	(3,280)	-	-	(2,961)	(2,961)
	_________	_________	_______	_______	_______	_______	_______	_______
Net assets at 31 March 2008	4,555	18,446	91,339	114,340	4,555	18,446	113,189	136,190
	_________	_________	_______	_______	_______	_______	_______	_______

VALUE AND INCOME TRUST PLC

GROUP STATEMENT OF CASH FLOWS

For the year ended 31 March 2008	2008		2007
	(Unaudited)		(Audited)
	£000	£000	£000	£000
Cash flows from operating activities
Dividend income received		4,430		3,903
Rental received		3,411		3,117
Interest received		206		174
Operating expenses paid		(2,213)		(2,020)
		__________		__________
NET CASH FROM OPERATING ACTIVITIES		5,834		5,174
Cash flows from investing activities
Purchase of investments	(25,800)		(28,207)
Sale of investments	34,114		29,680
	__________		__________
NET CASH INFLOW FROM INVESTING ACTIVITIES		8,314		1,473
Cash flow from financing activities
Interest paid	(3,525)		(3,525)
Dividends paid	(3,280)		(2,961)
	__________		__________
NET CASH FROM FINANCING ACTIVITIES		(6,805)		(6,486)
		__________		__________
NET INCREASE IN CASH AND CASH EQUIVALENTS		7,343		161
Cash and cash equivalents at 1 April 2007		2,266		2,105
		__________		__________
Cash and cash equivalents at 31 March 2008		9,609		2,266
		__________		__________

VALUE AND INCOME TRUST PLC

COMPANY STATEMENT OF CASH FLOWS

For the year ended 31 March 2008	2008		2007
	(Unaudited)		(Audited)
	£000	£000	£000	£000
Cash flows from operating activities
Dividend income received		4,430		3,903
Rental received		1,168		1,176
Interest received		162		136
Operating expenses paid		(1,696)		(1,496)
		__________		__________
NET CASH FROM OPERATING ACTIVITIES		4,064		3,719
Cash flows from investing activities
Purchase of investments	(25,701)		(28,207)
Sale of investments	34,114		27,439
Increase in loan to subsidiary	-		2,159
	__________		__________
NET CASH INFLOW FROM INVESTING ACTIVITIES		8,413		1,391
Cash flow from financing activities
Interest paid	(1,875)		(1,875)
Dividends paid	(3,280)		(2,961)
	__________		__________
NET CASH FROM FINANCING ACTIVITIES		(5,155)		(4,836)
		__________		__________
NET INCREASE IN CASH AND CASH EQUIVALENTS		7,322		274
Cash and cash equivalents at 1 April 2007		1,780		1,506
		__________		__________
Cash and cash equivalents at 31 March 2008		9,102		1,780
		__________		__________

NOTES TO FINANCIAL STATEMENTS:

 

1.      Accounting policies

         The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee (IASC) that remain in effect, and to the extent that they have been adopted by the European Union.

 

(a)     Basis of preparation

          The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial assets. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the Association of Investment Companies (AIC) in January 2003 (and revised in December 2005) is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

 

          The directors are of the opinion that the Group is engaged in a single segment of business, being investment business. The Group invest in companies listed in the UK only.

 

(b)     Basis of consolidation

          The consolidated financial statements incorporate the financial statements of the Company and the entity controlled by the Company (its subsidiary), drawn up to 31 March 2008. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

Audax Properties plc, a wholly-owned subsidiary of the Company, charges expenses wholly to income. On consolidation, however, an adjustment is made to charge 70% of the investment management fee paid by Audax Properties plc to capital. The allocation has no effect on the total return of the Company or the Group.

 

       (c)     Presentation of income statement

In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In accordance with the Company's status as a UK investment company under section 833 of the Companies Act 2006, net capital returns may not be distributed by way of dividend. Additionally the net revenue is the measure that the directors believe to be appropriate in assessing the Company's compliance with certain requirements set out in section 842 of the Income and Corporation Taxes Act 1988.

 

(d)     Income

          Dividend income from investments is recognised as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the period end are treated as revenue for the period.

 

          Where the Group has elected to receive dividend income in the form of additional shares rather than cash, the amount of cash dividend foregone is recognised as income. Any excess in the value of shares received over the amount of cash dividend foregone is recognised as a gain in the income statement.

 

Interest receivable from cash and short term deposits and interest payable is accrued to the end of the period.

 

Rental and other income is recognised as earned.

 

(e)     Expenses and Finance Costs

All expenses and finance costs are accounted for on an accruals basis. Expenses are presented as capital where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect, the investment management fees are allocated 30% to revenue and 70% to capital to reflect the Board's expectations of long term investment returns.

 

Any performance fees payable are allocated to capital, reflecting the fact that, although they are calculated on a total return basis, they are expected to be attributable largely to capital performance.

 

It is normal practice for investment trust companies to allocate finance costs to capital on the same basis as the investment management fee allocation. However as the Company has a significant exposure to property and property companies do not charge finance costs to capital, the directors consider it inappropriate to allocate finance costs to capital.

 

(f)      Taxation

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or the right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. Due to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

 

This is not the case for the subsidiary company and hence the Group where such provision is made, calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

 

(g)     Dividends payable

Interim dividends are recognised as a liability in the period in which they are paid as no further approval is required in respect of such dividends. Final dividends are recognised as a liability only after they have been approved by shareholders in general meeting.

 

(h)     Investments

All investments have been designated upon initial recognition as fair value through profit or loss.

 

Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are initially measured at fair value.

 

Subsequent to initial recognition, investments are recognised at fair value through profit or loss. For listed investments, this is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange.

 

SETS is the London Stock Exchange electronic trading service covering most of the market including all FTSE 100 constituents and the most liquid FTSE 250 constituents along with some other securities. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the income statement and are ultimately recognised in the retained earnings.

 

In respect of investment properties, fair value is established by half-yearly professional valuation on an open market basis by King Sturge and Co, Chartered Surveyors and Valuers and in accordance with the RICS Valuation Standards.

 

(i)      Cash and cash equivalents

          Cash and cash equivalents comprises deposits held with banks. 

 

(j)      Non - current liabilities

          All loans and borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost. Amortised cost is calculated by taking into account any discount or premium on settlement. The costs of arranging any interest-bearing loans are capitalised and amortised over the life of the loan.

 

2.      Proposed Final Dividend

The Directors are recommending a final dividend of 3.7p per Ordinary Share to be paid on 18 July 2008 to shareholders on the register as at 20 June 2008. The ex-dividend date is 18 June 2008.

 

3.      Statutory Financial Statements and Annual General Meeting

The financial information contained within this preliminary announcement does not constitute the Company’s statutory financial statements as defined in Section 240 of the Companies Act 1985 for the years ended 31 March 2008 or 2007 but is derived from those financial statements.  Statutory financial statements for 2007 have been delivered to the Registrar of Companies and those for 2008 will be delivered following the Company’s Annual General Meeting which will be held at One Bow Churchyard, Cheapside, London, EC4M 9HH on Friday 11 July 2008 at 12.30 pm. The auditors’ report in respect of the year ended 31 March 2007 was unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985.

 

The auditors have not yet reported on the financial statements to 31 March 2008. The preliminary announcement was approved by the Board of Directors on 28 May 2008.

 

4.    Publication of Financial Statements

The Annual Report and Financial Statements will be posted to shareholders in June 2008 and copies will be available from the Manager, OLIM Limited, (www.olim.co.uk), Pollen House, 10/12 Cork Street, London, W1S 3NP or from the Secretary, Aberdeen Asset Management PLC, 7^th Floor, 40 Princes Street, Edinburgh, EH2 2BY.

 

For Value and Income Trust plc

Aberdeen Asset Management PLC

Secretary

 

28 May 2008

 

END

 

 

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