Interim Results

RNS Number : 6549H

Value & Income Trust plc

06 November 2008

 



VALUE AND INCOME TRUST PLC

UNAUDITED HALF-YEARLY FINANCIAL REPORT 

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008

SUMMARY

	30 September 2008	30 September 2007	31 March 2008
Net asset value per share	184.5p	261.9p	222.7p
(valuing debt at market)
Net asset value per share	212.0p	287.9p	251.0p
(valuing debt at par)
Share price (mid)	143.5p	237.3p	166.0p
Dividend per share	3.8p	3.7p	7.4p
	(Interim)	(Interim)	(Total)

Over the half-year VIT's share price fell by 13.6% while the net asset value, valuing debt at par, fell by 15.5%. The FTSE All-Share Index fell by 15.1% over the half-year, in capital terms. VIT's property portfolio was revalued independently at 30 September 2008 and the capital value had declined by 8.4% compared to 31 March 2008.  Rental income is rising and the property portfolio remains fully let.

An interim dividend of 3.80p per share has been declared payable on 9 January 2009 to those shareholders on the register on 12 December 2008. The ex-dividend date will be 10 December 2008.

ENQUIRIES:

Matthew Oakeshott / Angela Lascelles OLIM Limited, Investment Managers Tel: [phone] / Fax: [phone] Website: www.olim.co.uk

INTERIM MANAGEMENT REPORT

Events during the period

At the Company's Annual General Meeting on 11 July 2008, all resolutions were passed.

At the period end the following shareholder had notified the Company of its holding:

Shareholder	Number of Ordinary shares held	% of Ordinary Shares held
Legal & General Group PLC	1,475,777	3.2

Risks and Uncertainties

The Board has identified the key risks that affect its business as follows which are considered equally applicable to the second half of the financial year as for the period under review:

•     Market price risk: Changes in interest rates, valuations accorded to financial instruments and movements thereof, and the liquidity of financial instruments constitute market price risk. It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to any particular sector. Market price risk is managed through investment guidelines agreed by the Board with the Manager and is discussed at each Board meeting.

•     Gearing risk: The Group's policy is to increase its exposure to equity and property markets through the judicious use of borrowings. When borrowings are invested in such markets, the effect is to magnify the impact on shareholders' funds of changes, both positive and negative, in the value of the portfolio. The Group's borrowings providing secure long term funding are debenture stocks maturing in 2021 and 2026. The debenture stocks are valued at amortised cost in the financial statements. The Manager regulates the overall level of gearing by raising or lowering cash balances.

•     Credit risk: The Group places funds with authorised deposit takers from time to time and is therefore potentially at risk from the failure of any such institution of which it is a creditor. Amounts of such funds at the balance sheet date are shown on the balance sheet as 'Cash and cash equivalents'.

•     Liquidity risk: The Group's assets comprise of readily realisable securities which can be sold to meet commitments if required and investment properties which, by their nature, are rather less readily realisable.

Statement of Directors' Responsibilities

The Directors confirm that to the best of their knowledge:

•     the condensed set of financial statements within the Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'; and 

•     the Interim Board Report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FSA's Disclosure and Transparency Rules.

For and on behalf of the Board of Value and Income Trust PLC

James Ferguson

Chairman

6 November 2008

VALUE AND INCOME TRUST PLC

GROUP INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008

		6 months ended			6 months ended			Year ended
		30 September 2008			30 September 2007			31 March 2008
		(Unaudited)			(Unaudited)			(Audited)
		Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
	Notes
INVESTMENT INCOME
Dividend income		2,848	-	2,848	2,638	-	2,638	4,368	-	4,368
Interest income		158	-	158	80	-	80	205	-	205
OTHER OPERATING INCOME		1,655	-	1,655	1,660	-	1,660	3,284	-	3,284
		_______	_______	_______	_______	_______	_______	_______	_______	_______
TOTAL INCOME		4,661	-	4,661	4,378	-	4,378	7,857	-	7,857
GAINS AND LOSSES ON INVESTMENTS
Realised (losses)/gains on held-at-fair-value investments		-	(2,197)	(2,197)	-	4,337	4,337	-	5,451	5,451
Unrealised losses on investments		-	(17,014)	(17,014)	-	(10,086)	(10,086)	-	(28,069)	(28,069)
		_______	_______	_______	_______	_______	_______	_______	_______	_______
TOTAL REVENUE		4,661	(19,211)	(14,550)	4,378	(5,749)	(1,371)	7,857	(22,618)	(14,761)
		_______	_______	_______	_______	_______	_______	_______	_______	_______
EXPENSES
Investment management fees		(137)	(320)	(457)	(203)	(475)	(678)	(367)	(855)	(1,222)
Other operating expenses		(283)	-	(283)	(241)	-	(241)	(396)	-	(396)
FINANCE COSTS		(1,751)	-	(1,751)	(1,751)	-	(1,751)	(3,501)	-	(3,501)
		_______	_______	_______	_______	_______	_______	_______	_______	_______
TOTAL EXPENSES		(2,171)	(320)	(2,491)	(2,195)	(475)	(2,670)	(4,264)	(855)	(5,119)
		_______	_______	_______	_______	_______	_______	_______	_______	_______
LOSS BEFORE TAX		2,490	(19,531)	(17,041)	2,183	(6,224)	(4,041)	3,593	(23,473)	(19,880)
TAXATION		-	948	948	-	590	590	-	1,310	1,310
		_______	_______	_______	_______	_______	_______	_______	_______	_______
LOSS FOR THE PERIOD		2,490	(18,583)	(16,093)	2,183	(5,634)	(3,451)	3,593	(22,163)	(18,570)
		_______	_______	_______	_______	_______	_______	_______	_______	_______
EARNINGS PER ORDINARY SHARE (PENCE)	2	5.47	(40.80)	(35.33)	4.79	(12.37)	(7.58)	7.89	(48.66)	(40.77)

The total column of this statement represents the Group's Income Statement prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance issued 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 the parent company. There are no minority interests. 

  VALUE AND INCOME TRUST PLC

STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008

Group		6 months ended 30 September 2008				Year ended 31 March 2008
		(Unaudited)				(Audited)
		Share	Share	Retained	Total	Share	Share	Retained	Total
		capital	premium	earnings		capital	premium	earnings
	Notes	£000	£000	£000	£000	£000	£000	£000	£000
Net assets at 31 March 2008		4,555	18,446	91,339	114,340	4,555	18,446	113,189	136,190
Net loss for the period		-	-	(16,093)	(16,093)	-	-	(18,570)	(18,570)
Dividends paid	3	-	-	(1,685)	(1,685)	-	-	(3,280)	(3,280)
		_______	_______	_______	_______	_______	_______	_______	_______
NET ASSETS AT 30 SEPTEMBER 2008		4,555	18,446	73,561	96,562	4,555	18,446	91,339	114,340
		_______	_______	_______	_______	_______	_______	_______	_______

Group		6 months ended 30 September 2007
		(Unaudited)
		Share	Share	Retained	Total
		capital	premium	earnings
	Notes	£000	£000	£000	£000
Net assets at 31 March 2008		4,555	18,446	113,189	136,190
Net loss for the period		-	-	(3,451)	(3,451)
Dividends paid	3	-	-	(1,594)	(1,594)
		_______	_______	_______	_______
NET ASSETS AT 30 SEPTEMBER 2008		4,555	18,446	108,144	131,145
		_______	_______	_______	_______

  VALUE AND INCOME TRUST PLC

GROUP BALANCE SHEET

AS AT 30 SEPTEMBER 2008

		As at		As at		As at
		30 September 2008		31 March 2008		30 September 2007
		(Unaudited)		(Audited)		(Unaudited)
		£'000	£'000	£'000	£'000	£'000	£'000
ASSETS	Notes
NON CURRENT ASSETS
Investments held at fair value through profit or loss			78,200		92,063		112,225
Investment properties held at fair value through profit or loss			46,675		51,000		53,825
			_________		_________		_________
			124,875		143,063		166,050
CURRENT ASSETS
Cash and cash equivalents		9,089		9,609		5,061
Other receivables		398		562		498
		_________	9,487	_________	10,171	_________	5,559
			_________		_________		_________
TOTAL ASSETS			134,362		153,234		171,609
CURRENT LIABILITIES
Other payables			(1,272)		(1,406)		(2,244)
			_________		_________		_________
			133,090		151,828		169,365
NON-CURRENT LIABILITIES
Debenture stock		(35,432)		(35,444)		(35,456)
Deferred tax		(1,096)		(2,044)		(2,764)
		_________		_________		_________
			(36,528)		(37,488)		(38,220)
			_________		_________		_________
			96,562		114,340		131,145
			_________		_________		_________
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Ordinary called up share capital			4,555		4,555		4,555
Share premium			18,446		18,446		18,446
Retained earnings	5		73,561		91,339		108,144
			_________		_________		_________
			96,562		114,340		131,145
			_________		_________		_________
NET ASSET VALUE PER ORDINARY SHARE			211.99p		251.02p		287.91p

  VALUE AND INCOME TRUST PLC

GROUP CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008

	6 months ended		6 months ended		Year ended
	30 September  2008		30 September 2007		31 March  2008
	(Unaudited)		(Unaudited)		(Audited)
	£000	£000	£000	£000	£000	£000
CASH FLOWS FROM OPERATING ACTIVITIES
Dividend income received		3,025		2,778		4,430
Rental received		1,412		1,480		3,411
Interest received		155		81		206
Other income		-		-		-
Operating expenses paid		(641)		(1,419)		(2,213)
		_______		_______		_______
NET CASH INFLOW FROM OPERATING ACTIVITIES		3,951		2,920		5,834
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments	(5,674)		(8,749)		(25,800)
Sale of investments	4,651		11,981		34,114
	_______		_______		_______
NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES		(1,023)		3,232		8,314
CASH FLOW FROM FINANCING ACTIVITIES
Interest paid	(1,763)		(1,763)		(3,525)
Dividends paid	(1,685)		(1,594)		(3,280)
	_______		_______		_______
NET CASH USED IN FINANCING ACTIVITIES		(3,448)		(3,357)		(6,805)
		_______		_______		_______
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(520)		2,795		7,343
Cash and cash equivalents at the start of the period		9,609		2,266		2,266
		_______		_______		_______
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD		9,089		5,061		9,609
		_______		_______		_______

  VALUE AND INCOME TRUST PLC

NOTES TO THE FINANCIAL STATEMENTS

1    Accounting policies (a)    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) and International Accounting Standards and Standing Interpretations Committee interpretations 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. The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial assets. 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 is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on the basis compliant with the recommendations of the SORP. (b)     Dividends payable Interim dividends are recognised as a liability in the period in which they are declared by the board of directors and 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. (c)     Investments  All investments have been designated upon initial recognition as fair value though 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. Investments designated as at fair value are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. In respect of property investments, fair value is established by a 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. 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.

2	Earnings per ordinary share
	The return per ordinary share is based on the following figures:
		6 months ended	6 months ended	Year ended
		September 2008	September 2007	March 2008
		Group	Group	Group
		£000	£000	£000
	Revenue return	2,490	2,183	3,103
	Capital return	(18,583)	(5,634)	17,362
	Weighted average ordinary shares
	in issue	45,549,975	45,549,975	45,549,975
	Return per share - revenue	5.47p	4.79p	7.89p
	Return per share - capital	(40.80p)	(12.37p)	(48.66p)
		_________	_________	_________
	Total return per share	(35.33p)	(7.58p)	(40.77p)
		_________	_________	_________

3	Dividends paid	6 months  ended	6 months ended	Year  ended
		September  2008	September  2007	March  2008
		£000	£000	£000
	Ordinary dividends on equity shares deducted from reserves are as follows:-
	Dividends on ordinary shares:
	Final dividend of 3.7p per share (2007 - 3.5p)	1,685	1,594	1,594
	paid 18 July 2008
	Interim dividend of 3.7p per share (2007 - 3.2p)	-	-	1,686
	paid 11 January 2008	________	________	________
		1,685	1,594	3,280
		________	________	________

4    Interim dividend The Directors have declared an interim dividend of 3.80p (2008 - 3.70p) per ordinary share, payable on 9 January 2009 to shareholders registered on 12 December 2008. The shares will be quoted ex dividend on 10 December 2008.

5	Retained earnings
	The table below shows the movement in retained earnings analysed between revenue (distributable) and capital (non-distributable) items
		Revenue	Capital	Total
		£000	£000	£000
	At 31 March 2008	3,163	89,317	91,339
	Movement during the period:-
	Profit for the period	2,490	(18,474)	(16,093)
	Dividends paid on ordinary shares	(1,685)	-	(1,685)
		________	________	________
	At 30 September 2008	3,968	70,843	73,561
		________	________	________

6	Transaction costs During the period, expenses were incurred in acquiring and disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains and losses on investments in the Income Statement The total costs are as follows:-
		6 months ended	6 months ended	Year ended
		September 2008	September 2007	March 2008
		£000	£000	£000
	Purchases	32	60	167
	Sales	8	16	57
		____________	____________	____________
		40	76	224
		____________	____________	____________

7    Related Party Transactions Angela Lascelles and Matthew Oakeshott, directors of the Company, are directors of OLIM Limited ('OLIM') which has an agreement with the Company to provide investment management services. OLIM receives a quarterly fee of 1/6% of the Group's total assets less current liabilities. OLIM is also entitled to a performance fee if the total positive returns to shareholders from their investment in the Company exceed the total return of the FTSE All-Share Index by more than 10 percentage points in any three year period.

8    Comparative information The financial information in this report comprises non-statutory financial statements within the meaning of s240 of the Companies Act 1985. The financial information for the year ended 31 March 2008 has been extracted from published audited financial statements which have been delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified under Section 235 of the Companies Act 1985.

9    Interim Report

The Interim Report will be issued to shareholders in November 2008 and copies may be obtained from the Manager, OLIM Limited, Pollen House, 10/12 Cork Street, London W1S 3NP (Tel. [phone]; Email: [e-mail]) or by download from the Trust's section of the Manager's website - www.olim.co.uk or from the Company Secretary, Aberdeen Asset Management PLC, 40 Princes Street, Edinburgh EH2 2BY.

 

END

 

 

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