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Equity Ptnrshp InvCo (EQPI)

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Wednesday 30 March, 2011

Equity Ptnrshp InvCo

Half Yearly Report

RNS Number : 8702D
Equity Partnership Inv Co PLC
30 March 2011
 



 

THE EQUITY PARTNERSHIP INVESTMENT COMPANY PLC

PRELIMINARY RESULTS ANNOUNCEMENT

 This is not the Company's Statutory Financial Statements. All figures are based on the unaudited financial statements for the period from 1 August 2010 to 31 January 2011

 The preliminary announcement is prepared on the same basis as set out in the previous year's annual financial statements.

Chairman's Statement

 

For the six months ended 31 January 2011 the net asset value attributable to the Company's Capital Shares rose by 29%, compared with the return from the All Share Index of 12%.   Our UK equity portfolio continued to outperform, producing a return of 58.46% over the period.  This performance was attributable to the continued recoveries in the share prices of Lupus and Diploma as well as an outstanding return from the Company's holding in Encore Oil.  As a result of our UK equity performance, the dilutive effects of the Company's sale of its Private Equity portfolio to EPE Special Opportunities PLC ("ESO") was largely mitigated.

Income Shareholders have received their full entitlement of 6.5p over the half year.  As the portfolio is returned to cash the dividend and the interest earned has fallen commensurately.  However, significant carry-forward distributable reserves will enable the Company to fulfil its obligations to Income Shareholders to pay the two remaining dividends 

I reported on the sale of the Private Equity portfolio in my last Chairman's statement but it should be recognised that the transaction itself fell into the six month period covered by this report. Twelve months ago when I wrote my last half year statement, the prices of our Income and Capital Shares demonstrated investors' limited confidence in the Manager's ability to return sufficient of the portfolio to cash to enable the full redemption of their shares at the end of July 2011.  The sale of the Private Equity portfolio and further progress in liquidating other less tradable holdings has given investors greater confidence in this regard, to the extent that the Income Shares have been trading at prices above the final redemption value and our Capital Shares have recovered strongly from the very depressed levels seen a year ago.  Our stated objective was to ensure that sufficient funds were available for Income and Zero Shareholders to be paid in full which would enable the Managers to focus exclusively over the final year of the Company's life on securing the best possible outcome for Capital Shareholders.  I am happy to report that this has now been achieved and that, to date, albeit with a smaller amount of capital invested, the portfolio's performance has succeeded in offsetting a significant proportion of the effects of both the discounted sale of the Private Equity portfolio and the Company's ongoing finance, administration and management costs.

The combination of significant cash holdings and very low short term interest rates makes it difficult to mitigate the Company's cost hurdle rate.  In an attempt to partially address this issue, the Company started to repurchase both Zero Dividend Preference Shares and Income Shares for cancellation.  The former have been bought for cancellation on yields of 4% to redemption while the Income Shares have been repurchased at higher equivalent redemption yields.  We believe that within the limitations imposed by the buy-in arrangements all shareholders benefit from share buy-backs. 

As we move into the final six months of the Company's life the Company's Board and Managers are considering all available options in order to provide the best possible outcome for Capital Shareholders. We would expect to be in a position to communicate our proposals to Shareholders well in advance of July 2011.

Cameron McPhail

29 March 2011

Investment Manager's Report

 

Market Commentary

In general, and despite the ructions of the euro-sovereign debt crisis, the second half of 2010 evidenced small but positive steps on the road towards normality.  Economic growth either met or exceeded beginning of year forecasts in major economies, profitability returned to the banking system and corporate bond spreads versus government securities tightened in, meaning that these bonds outperformed the returns from similar dated government securities.

In the US, positive signs in the first quarter of economic recovery were undermined by the fall-out from the Euro-sovereign debt crisis, and suffered a mid-year hiatus in growth amidst lingering fears of a 'double-dip' recession.  Growth, however, recovered and for 2010 recorded a healthy 2.8%, slightly higher than market expectations at the beginning of the year. A second round of Quantitative Easing, QE2, initiated in August, and a US$858 billion  tax cut package signed off in November 2010 should ensure continued growth in the US in 2011.

The outlook for both the US and the world economy is one of continued economic recovery led by the US, German and Chinese economies.  With recovery credit spreads should continue to contract.  Growth is neither secured nor entrenched, whilst stresses within the euro-zone have the potential to tear the euro apart with a wholly unpredictable impact upon the financial system.  At the same time the banking system remains credit constrained and the world economy remains fragile and, with uncertainty spreading across the Middle East, lacking in resilience to external shocks, economic or political.

Although both central bank rates and market yields will be higher by year-end, yield curves remain relatively steep relative to economic growth prospects and continue to offer value relative to cash rates which are likely to remain at historic lows for much of the year.

The European sovereign debt market was thrown into crisis at the start of 2010 with Greek debt becoming heavily distressed.  Although a package was eventually put together to assist the Greek government, conditional upon fiscal tightening, the remainder of the year saw Portugal, Spain and Ireland underperform, with Ireland ultimately requiring emergency measures.  Two increasingly distinct groupings emerged - a safe-haven "core" and a risky "periphery" - which proceeded to trade in very different ways.  In contrast to 2009, 2010 saw the Euro weaken dramatically, propelled in large part by the debt crisis in the periphery, and this helped Germany to reap great rewards as its manufacturing and export-orientated economy became extremely competitive internationally.  As a result of Germany's very rapid expansion, the Euro area as a whole delivered reasonable GDP growth, even though some of the region continued to experience recession.

In common with other bond markets around the world, Euro government yields were held down at the short end by accommodative monetary policy, while longer dated yields were more volatile.  We continue to anticipate slow, but gradually accelerating, economic growth in the developed world generally, and little inflation pressure near-term, together with rises in government bond yields.  The divergence seen recently between sovereign yield movements is likely to continue over the next several quarters.  The Euro area will be subject to some fiscal consolidation in its peripheral states, but the area as a whole is not over-burdened by debt, either public or private.  The earlier boost from the inventory effect and the realisation of rewards from a cheap Euro having delivered much of their benefit already, 2011 might not bring an acceleration of growth.

With the ongoing rebuild of the banking sector globally, the anticipation of eventual renormalisation of monetary policy, and the starting point of 2011 in which non-safe haven assets continue to offer premium yields, the environment remains favourable for corporate bonds.  However, as we have maintained, the long path back to more historically normal markets is unlikely to resemble a straight line, and the short term fluctuations might well provide trading opportunities.



 

Quoted Equity

UK Equity markets continued their rise over most of the six months under review.  Good company results and dividend yields that compared very favourably with money market rates were enough to see off worries about inflation and the pace of growth in the Chinese economy.  The All Share Index rose by 12.1%.

EPIC used these benign market conditions to reduce its equity exposure.  At 31 July 2010 EPIC held fourteen stocks with a market value of £18.4 million.  By 31 January 2011 EPIC held six stocks with a market value of £11.7 million.  The remaining stocks were Colt, Eleco, Encore Oil, Lupus Capital, Managed Support Services and Sagentia.  These stocks were retained for their ability to make a difference to the portfolio's asset value over the next six months.

The four largest holdings have met expectations so far.  Fixed line telecoms operator Colt has continued to trade well.  North Sea oil explorer Encore has achieved great success with its drilling programme at Catcher and Cladhan during the winter.  Despite flat market conditions in the UK and US, building manufacturer Lupus Capital is winning market share and beating expectations.  Technology consultant Sagentia continues to trade strongly under the guidance of entrepreneur Martyn Ratcliffe.

Eleco and Managed Support Services, which together have a market value of £900,000 are both dependent on the health of the UK economy and would now seem unlikely to make significant progress over the next six months.

 

Specialist Funds

 

The Specialist Funds portfolio is being liquidated and currently represents 23.8% of the total Fund.  This compares with 14.6% on 31 January 2010.  The largest investments by market value are commented upon below.

EPE Special Opportunities PLC (£2.2 million equity and £10million convertible debt) is an Isle of Man based company investing in small private equity companies.  This Company purchased EPIC PLC's private equity holdings on 31 August 2010, in return for which the Company received cash and a 10% shareholding in ESO's equity and £10 million, 7.5% convertible loan stock.  Apart from the holdings purchased from EPIC, ESO's largest holdings are in the retail companies, Whittards of Chelsea and Past Times.  Difficult weather conditions affected trading conditions prior to Christmas and compressed trading for both companies but the Managers are confident that, despite the depressed consumer environment, both companies will continue to progress in 2011.

CCD Leisure Investments  ($1.6 million) has been set up to invest in prestige holiday developments in emerging destinations.  The first investment has been into the popular emerging tourist destination of Grenada which is located south of the usual hurricane path and whose tourist industry remains relatively undeveloped.  We are actively seeking a buyer to exit this investment.

Kane Group Limited ($1.0 million) an investment in loan notes issued is being extended to the end of June 2011.  The group is in the final stages of securing new outside investors to redeem EPIC's loan notes.

Brilliant Film Fund ($0.9 million). Buyers are being sought for this investment.  Further progress has been made over the half year in progressing a number of film properties, including an Agatha Christie script which is likely to be the first property to mature.  Although we are confident of the longer term outlook for the Fund, EPIC's timeframe means that we will continue to seek buyers for this investment. 

 

Outside of the Specialist Funds portfolio, the Company has a secured real estate junior loan to Alpha Real Estate GmbH of €5m which is in default and has been written down to €2.8 million as a matter of prudence. We are in liaison with the representatives of the Senior Lender and the equity holders to resolve this.

The Company's investment in EEA Life Settlement Fund was profitably redeemed at the start of the year.  This Fund has now had in excess of 50 "up" months, and although the steady nature of its progress lent itself to retention until the end of EPIC's life, as with all life settlement funds there is the risk that redemptions could call into question the pricing if recourse to the secondary market is required to meet their liquidity requirements.

 

Asset Allocation

 

 

Asset Allocation as at 31 January 2011

 

Asset Allocations as at 31 July 2010

 

 

 

 

 

Cash

35.72%

 

Cash

2.03%

Cash-based Funds

14.55%

 

Cash-based Funds

13.39%

Unquoted Investments

0.00%

 

Unquoted Investments

33.41%

Strategic Investments

0.09%

 

Strategic Investments

0.09%

Specialist Funds

23.81%

 

Specialist Funds

13.19%

Quoted Equities

19.21%

 

Quoted Equities

29.33%

Bonds and Structured Income Products

6.62%

 

Bonds and Structured Income Products

8.56%

 

Directors' Responsibility Statement

 

The Directors confirm to the best of their knowledge that:

•       this condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting;

•       the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules, being:

•       an indication 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 year; and

•       related party transactions that have taken place in the first six months of the financial year and any changes in the related party transactions described in the annual report that have materially affected or could have a material effect on the financial position or performance of the Group.

 

Independent Auditors' Review Report

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly report for the six months ended 31 January 2011, which comprises the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in Shareholders' Equity, the Consolidated Statement of Cash Flows and the related explanatory notes.  We have read the other information contained in the half-yearly report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with the terms of our engagement to assist the company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the FSA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly report is the responsibility of, and has been approved by, the Directors.  The Directors are responsible for preparing the half-yearly report in accordance with the DTR of the UK FSA.

The condensed set of financial statements included in this half yearly report have been prepared in accordance with IAS 34 Interim Financial Reporting.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly report for the six months ended 31 January 2011 is not prepared, in all material respects, in accordance with IAS 34 and the DTR of the UK FSA. 

 

KPMG Audit LLC

Chartered Accountants

Heritage Court 41

Athol Street

Douglas Isle of Man

IM99 1HN

 

29 March 2011



 

Consolidated Statement of Comprehensive Income

For the period from 1 August 2010 to 31 January 2011


 

 

1 August 2010 to 31 January 2011

1 August 2009 to 31 January 2010

1 August 2009 to 31 July 2010


 

 

(unaudited)

(unaudited)

(audited)

Note



£000s

£000s

£000s


Income

 

 

 

 


Dividend income

 

153

285

602


Bond interest income

 

470

129

(2,580)


Bank interest income

 

50

12

28


Other income

 

-

5

5


Total income

 

673

431

(1,945)


Expenses

 

 

 

 


Management and investment advisory fees

 

376

558

1,100


Professional fees

 

252

364

1,288


Other expenses

 

274

248

313


Administration fees

 

76

69

128


Directors' fees

 

38

38

75


Custodian fees

 

6

8

12


Audit fees

 

22

17

43


Provisions

 

-

650

(650)


Total expenses

 

1,044

1,952

2,309


Net investment expense

 

(371)

(1,521)

(4,254)


(Losses)/gains on investments

 

 

 

 


Realised losses on sale of financial assets at fair value through profit or loss

 

(1,243)

(6,207)

(7,178)


Net realised (losses)/gains on settlement of forward foreign currency contracts

 

(169)

60

207


Net unrealised gains/(losses) on forward foreign currency contracts

 

36

(409)

(382)


Foreign exchange differences

 

146

(6)

(29)


Fair value movement on revaluation of financial assets at fair value through profit or loss

 

8,440

10,403

10,819


Profit for the period/year on investments at fair value through profit or loss

 

7,210

3,841

3,437

7

Dividends on Income Shares

 

(1,339)

(1,295)

(2,589)


Debt finance costs

 

(839)

(791)

(1,594)


Premium on repurchase of own debt instruments

 

(100)

-

-


Profit/(loss) for the period/year

 

4,561

234

(5,000)


Other comprehensive income

 

-

-

-


Total comprehensive income/(loss)

 

4,561

234

(5,000)

8

Basic and diluted earnings/(loss) per capital share (pence)

 

11.32p

0.58p

(12.41)p

 

 



 

Consolidated Statement of Financial Position

As at 31 January 2011


 

 

31 January
2011

31 January
2010

31 July
2010


 

 

(unaudited)

(unaudited)

(audited)

Note



£000s

£000s

£000s

10

Financial assets at fair value through profit or loss

 

39,063

62,443

61,587


 

 

 

 

 


Current assets

 

 

 

 


Cash and cash equivalents

 

21,701

1,826

1,274


Trade debtors and other receivables

 

3,904

4,150

1,168


Total assets

 

64,668

68,419

64,029


 

 

 

 

 


Current liabilities

 

 

 

 


Trade creditors and other payables

 

816

1,203

1,844


Provisions

 

-

710

-


 

 

 

 

 


Non-current liabilities

 

 

 

 

9

Zero Dividend Preference Shares

 

25,870

25,085

25,973

9

Income Shares

 

17,892

20,658

20,683


Total liabilities

 

44,578

47,656

48,500


Net assets

 

20,090

20,763

15,529


Shareholders' Equity

 

 

 

 

11

Share capital

 

4,030

4,030

4,030


Share premium

 

35,410

35,410

35,410


Reserves

 

(19,350)

(18,677)

(23,911)


Shareholders' Equity

 

20,090

20,763

15,529

12

Net asset value per Capital Share (basic and diluted, pence)

 

49.85p

51.52p

38.53p

 

The interim financial statements were approved by the Board of Directors on 29 March 2011 and signed on their behalf by:

 

Philip Scales                                                                            Martin Richardson

Director                                                                                   Director

 



 

Consolidated Statement of Changes in Shareholders' Equity

For the period from 1 August 2010 to 31 January 2011

 

For six months ended 31 January 2011  (unaudited)

Share capital

Share premium

Reserves


Total



£000s

£000s

£000s

£000s

Balance at 1 August 2010 (audited)

 

4,030

35,410

(23,911)

15,529

 

 

 

 

 

 

Total comprehensive income for the period

 

-

-

4,561

4,561

 

 

 

 

 

 

Balance at 31 January 2011 (unaudited)

 

4,030

35,410

(19,350)

20,090

 

 

 

 

 

 

 

 

 

 

 

 

For six months ended 31 January 2010  (unaudited)

Share capital

Share premium

Reserves


Total

 

 

£000s

£000s

£000s

£000s

Balance at 1 August 2009 (audited)

 

4,030

35,410

(18,911)

20,529

 

 

 

 

 

 

Total comprehensive income for the period

 

-

-

234

234

 

 

 

 

 

 

Balance at 31 January 2010 (unaudited)

 

4,030

35,410

(18,677)

20,763

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended 31 July 2010  (audited)

 

Share capital

Share premium

Reserves


Total

 

 

£000s

£000s

£000s

£000s

Balance at 1 August 2009 (audited)

 

4,030

35,410

(18,911)

20,529

 

 

 

 

 

 

Total comprehensive income for the year

 

-

-

(5,000)

(5,000)

 

 

 

 

 

 

Balance at 31 July 2010 (audited)

 

4,030

35,410

(23,911)

15,529

 

 

 

 

 

 

 

 



 

Consolidated Statement of Cash Flows

For the period 1 August 2010 to 31 January 2011

 

 

1 August 2010 to  31 January 2011

2 August 2009 to  31 January 2010

1 August 2009 to 31 July 2010

 

 

(Unaudited)

(Unaudited)

(Audited)



£000s

£000s

£000s

Operating activities

 

 

 

 

Dividends received

 

318

300

469

Bond interest received

 

-

264

479

Bank interest received

 

40

12

26

Other income received

 

-

5

6

Expenses paid

 

(1,035)

(1,262)

(2,041)

Net cash outflow from operating activities

 

(677)

(681)

(1,061)

Investing activities

 

 

 

 

Purchase of investments

 

(24,535)

(14,610)

(41,936)

Proceeds on sale of investments

 

51,021

16,219

44,543

Realised exchange differences on non sterling deposits

 

58

(11)

(35)

Settlement of forward foreign exchange contracts

 

(169)

60

207

Net cash inflow from investing activities

 

26,375

1,658

2,779

Financing activities

 

 

 

 

Repurchase of own debt instruments

 

(4,027)

-

-

Dividends paid on income shares

 

(1,331)

(1,295)

(2,589)

Net cash outflow from financing activities

 

(5,358)

(1,295)

(2,589)

Increase/(decrease) in cash and cash equivalents

 

20,340

(318)

(871)

Effect of foreign exchange rate fluctuations on cash and cash equivalents

 

87

5

6

Cash and cash equivalents at start of the period/year

 

1,274

2,139

2,139

Cash and cash equivalents at end of period/year

 

21,701

1,826

1,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Notes to the interim financial statements

For the period from 1 August 2010 to 31 January 2011

1    The Company

The Equity Partnership Investment Company PLC was incorporated in the Isle of Man on 6 July 2001. The Company is a closed ended investment company and was formed primarily for investment in quoted equities, bonds and structured income products, unquoted equities and specialist funds. The aim of the Group is to provide long-term capital growth together with a high level of income. The Group has no employees.

The interim consolidated financial statements of the Company for the period ended 31 January 2011 comprise the Company and its subsidiaries (together referred to as the "Group").  The interim consolidated financial statements are unaudited.

The consolidated financial statements of the Group as at and for the year ended 31 July 2010 are available upon request from the Company's registered office at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP or at http://www.epicip.com/epic_plc_home.html.

2    Statement of compliance

These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 July 2010.

These interim consolidated financial statements were approved by the Board of Directors on 29 March 2011.

3    Significant accounting policies

The accounting policies applied by the Group in these interim consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 July 2010.

4    Estimates

The preparation of financial statements is in conformity with IFRSs requires management to make judgements, estimates, and assumptions that effect the application of policies and the reported amounts of assets and liabilities, income and expenses. These estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and future years if the revision affects both current and future years. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies is included in the following balance: Financial assets at fair value through profit or loss, note 10.

5    Segmental reporting

The Directors are of the opinion that the Group is engaged primarily in a single geographic segment in the United Kingdom and single economic segment being investment business.

6    Financial risk management

The Group's financial risk management policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 July 2010.

 

 

 

 

7    Dividends on Income Shares

 

 

 

Six months ended 31 January 2011

Six months ended 31 January 2010

Year ended 31 July 2010

 

Rate (pence)

 

£000s

£000s

£000s

1st interim dividend paid on 26 November 2010

3.2688 (2010: 3.1217)

 

678

647

647

2nd interim dividend paid on 25 February 2011

3.2688 (2010: 3.1217)

 

661

648

647

3rd interim dividend *

3.2688 (2010: 3.1217)

 

-

-

648

4th interim dividend *

3.2688 (2010: 3.1217)

 

-

-

647

 

 

 

1,339

1,295

2,589

 

During the period the Company purchased and cancelled 2,820,850 Income Shares (note 9).

*The 3rd and 4th interim dividends are shown for the comparative year ended 31 July 2010 only and were paid on 21 May 2010 and 27 August 2010 respectively.

8    Basic and diluted earnings/(loss) per Capital Share

Basic earnings per share is calculated by dividing the net profit for the period attributable to Capital Shares by the weighted average number of Capital Shares outstanding during the period.

 

 

 

Six months ended 31 January 2011

Six months ended 31 January 2010

Year ended 31 July 2010

Profit/(loss) for the period/year (£ thousands)

 

4,561

234

(5,000)

Weighted average number of Capital Shares for basic earnings per share

 

40,304,312

40,304,312

40,304,313

Basic earnings/(loss) per capital share (pence)

 

11.32

0.58

(12.41)

 

For the periods ended 31 January 2011, 31 January 2010 and 31 July 2010 there is no difference between basic and fully diluted earnings per Capital Share.

9    Non-current Liabilities

The company classifies its Zero Dividend and Income Shares as debt instruments. During the period the company made purchases of its ZDP and Income Shares as follows:

 

 

 

Zero Dividend Preference Shares

 

 

 

 

 

 

 

 

31 January 2011
£000s

31 January 2010
£000s

31 July 2010
£000s

 

 

 

 

 

 

Liability at beginning of the period/year

 

 

25,973

24,213

24,213

Finance cost of ZDP Shares

 

 

839

791

1,594

Amortisation of issue costs

 

 

92

81

166

Repurchased during the period

 

 

(1,034)

-

-

At the end of the period/year

 

 

25,870

25,085

25,973



 

 

Income Shares

 

 

 

 

 

 

 

 

31 January 2011
Number of shares

31 January 2010
Number of shares

31 July 2010
Number of shares

Authorised

 

 

 

 

 

Income Shares of 10p each

 

 

45,000,000

45,000,000

45,000,000

 

 

 

 

 

 

Issued and fully paid

 

 

 

 

 

At the beginning of the period/year

 

 

20,736,333

20,736,333

20,736,333

Repurchased during the period

 

 

(2,820,850)

-

-

At the end of the period/year

 

 

17,915,483

20,736,333

20,736,333

 

 

The movements in the value of the Zero Dividend Preference Shares and Income Shares liabilities' were as follows:

 

Zero Dividend Preference Shares

 

 

 

 

 

 

 

 

31 January 2011
£000s

31 January 2010
£000s

31 July 2010
£000s

 

 

 

 

 

 

Liability at beginning of the period/year

 

 

25,973

24,213

24,213

Finance cost of ZDP Shares

 

 

839

791

1,594

Amortisation of issue costs

 

 

92

81

166

Repurchased during the period

 

 

(1,034)

-

-

At the end of the period/year

 

 

25,870

25,085

25,973

 

 

 

 

 

 

 

 

Income Shares

 

 

 

 

 

 

 

 

31 January 2011
£000s

31 January 2010
£000s

31 July 2010
£000s

 

 

 

 

 

 

Liability at beginning of the period/year

 

 

20,683

20,631

20,631

Amortisation of issue costs

 

 

26

27

52

Repurchased during the period

 

 

(2,817)

-

-

At the end of the period/year

 

 

17,892

20,658

20,683

 

 

 

 

 

 

 

Full details of the rights attached to the Zero Dividend Preference Shares and Income Shares can be found in the Company's last financial statements for the year ended 31 July 2010.



 

10  Financial assets at fair value through profit or loss

 

 

Cash Based Funds

*Strategic Investments

*Unquoted Investments

Quoted Equities

Specialist Funds

Structured Products

Others

Totals

 

 

£000s

£000s

£000s

£000s

£000s

£000s

£000s

£000s

Closing book cost at 31 January 2011

 

8,843

542

-

8,391

23,667

5,469

500

47,412

Unrealised (loss)/gain on revaluation

 

-

(487)

-

3,282

(9,198)

(1,446)

(500)

(8,349)

Fair Value at 31 January 2011

 

8,843

55

-

11,673

14,469

4,023

-

39,063

As at 31 July 2010

 

8,418

56

21,002

18,439

8,291

5,381

-

61,587

 

* Unquoted investments at Directors' valuation.

Included in the specialist funds and structured products are unquoted holdings at Directors' valuation of £12,269,195 (31 July 2010: £2,667,513) and £4,022,869 (31 July 2010: £5,381,198) respectively.

The Company disposed of its private equity portfolio to EPE Special Opportunities PLC during the period (note 13).

11  Share Capital



31 January 2011


31 January 2010


31 July 2010


 

Number of Shares

£000s


Number of Shares

£000s

 

Number of Shares

  £000s

Authorised

 









Capital Shares

 

75,000,000

7,500


75,000,000

7,500


75,000,000

7,500

Warrants

 

15,000,000

1,500


15,000,000

1,500


15,000,000

1,500


 

90,000,000

9,000


90,000,000

9,000


90,000,000

9,000


 










 









Issued and  fully paid

 









Capital Shares

 

40,304,312

4,030


40,304,312

4,030


40,304,312

4,030


 

40,304,312

4,030


40,304,312

4,030


40,304,312

4,030

 

 

12  Net Asset Value per Capital Share (pence)

The net asset value per Capital Share is based on the net assets at the end of period of £20,089,806 (31 July 2010: £15,529,000 and 31 January 2010: £20,762,916) divided by 40,304,312 (31 July 2010: 40,304,312 and 31 January 2010: 40,304,312) shares in issue at the end of the period/year.

13  Related Party Transactions

As disclosed in the Financial Statements for the year ended 31 July 2010, during the period the Company disposed of its private equity portfolio to EPE Special Opportunities PLC. EPIC PLC and EPE Special Opportunities PLC are both advised by EPE LLP and both EPE LLP and the principals of EPE LLP hold equity positions in EPE Special Opportunities PLC.

14  Subsequent Events

Subsequent to the end of the period the Company has continued to purchase and cancel its Zero Dividend Preference Shares 188,800 and Income Shares 370,000.

 


This information is provided by RNS
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