Securities Tst Scot STS Half Yearly Report
Securities Tst Scot (STS) - Half Yearly Report
RNS Number : 7999Q
Securities Trust of Scotland PLC
09 November 2012
Securities Trust of Scotland plc
Half-yearly financial report
Six months to 30 September 2012
A copy of the half yearly financial report has been submitted to the National
Storage Mechanism and will shortly be available for inspection at:
www.Hemscott.com/nsm.do
A copy of this half-yearly financial report can shortly be downloaded at
www.securitiestrust.com
FINANCIAL SUMMARY
Key data As at As at % change
30 September 2012 31 March 2012
Net asset value per share (cum 123.02p 119.75p +2.7
income)
Net asset value per share (ex income) 121.45p 118.00p +2.9
MSCI World High Dividend Yield Index 564.00 556.70 +1.3
Share price 127.50p 122.00p +4.5
Premium 3.64% 1.88%
Total returns‡ Six months ended Six months ended
30 September 2012 30 September 2011
Net asset value per share* 5.1% (6.0%)
Benchmark** 4.2% (5.4%)
Share price 6.6% (1.7%)
Income Six months ended Six months ended
30 September 2012 30 September 2011
Revenue return per share 2.77p 3.17p
Ongoing charges# Six months ended Six months ended
30 September 2012 30 September 2011
Ongoing charges 0.9% 0.8%
Performance fee - 0.3%
Ongoing charges plus performance fee 0.9% 1.1%
Source: Martin Currie Investment Management Limited
‡ The combined effect of any dividend paid, together with the rise or fall in
the share price, net asset value or index.
* The net asset value is exclusive of income with dividends re-invested.
** Prior to 1 August 2011, the company's benchmark was the FTSE All-Share
index and the MSCI World High Dividend Yield index thereafter.
# Ongoing charges have replaced the total expense ratio. They are calculated
using average net assets over the period. The ongoing charges figure has been
calculated with the AIC's recommended methodology.
Annual total returns with dividends reinvested over 12 month periods to 30
September
Annual total returns‡ 2012 2011 2010 2009 2008
Securities Trust of Scotland share price 27.7% 9.4% 15.8% 6.9% (30.4%)
Benchmark*** 15.7% 2.6% 12.5% 10.8% (22.3%)
Securities Trust of Scotland net asset value 18.3% 3.3% 14.6% 6.6% (28.8%)
per share
Source: Martin Currie Investment Management Limited
‡ The combined effect of any dividends paid, together with the rise or fall in
the share price, net asset value or benchmark.
*** Prior to 1 August 2011, the Trust's benchmark was the FTSE All-Share index
and the MSCI World High Dividend Yield index thereafter.
INTERIM MANAGEMENT REPORT
Chairman's statement
Over the six months to 30 September 2012, Securities Trust of Scotland
continued to build upon the positive momentum that has been growing since the
company moved to a global equity income portfolio on 1 August 2011.
I am pleased to report that over the period, investment returns were ahead of
benchmark. The net asset value total return was 5.1% compared with the
benchmark's return of 4.2%. The share price total return was 6.6%, reflecting
a continued and increased premium for the company.
The company's strong progress has also been recognised externally, with a
nomination in the International Income category at the Investment Company of
the Year awards later this month. This follows on from being awarded the Best
Growth & Income Trust award from Investment Trusts magazine earlier in the
year.
The manager's review outlines how despite their positive returns over the
period, global markets remain volatile with much continuing uncertainty.
Revenues and dividends
The revenue return per share for the six months to 30 September was 2.77p, a
fall of 12.6% compared with the six months to 30 September 2011. This
primarily reflects the absence of the one-off additional revenue return from
the transitional impact of the change in mandate last year (as disclosed in
the annual report). A first interim dividend payment of 1.15p per share for
the financial year to 31 March 2013 has already been declared and paid on 3
September to shareholders who were on the register on 17 August 2012. Your
board has also declared a second interim dividend of 1.15p per share, also
unchanged year-on-year. This will be paid on 13 December 2012 to shareholders
who were on the register on 23 November 2012. At 30 September the company's
shares offered a net yield of 3.7%.
Borrowing
The loan facility was increased by £3million to £14million in September 2012,
reflecting the investment appreciation and share issuance. The loan facility
has been fully drawn down during the 6 months to 30 September 2012. The
company maintained the level of gearing between 8% and 9% during the period.
This allowed the manager to enhance returns for shareholders over the period.
Share issues
As I reported in the annual report, demand for shares in the company has been
extremely strong since the move to a global equity income mandate. During
2012, the company has consistently traded at a premium, which, as at 30
September 2012, was 3.6% on a cum-income basis.
To help meet the demand for shares the company has the ability to issue up to
10 million new shares prior to the 2013 AGM. The company has issued
3.25million shares between June and September 2012.
Outlook
With the uncertainty in global markets set to continue, the company will
continue to focus on good quality stocks in which the manager has a high
degree of conviction. Your board will continue to remain focused on ensuring
that shareholders continue to benefit over the longer term.
Neil Donaldson
Chairman
9 November 2012
Risk and mitigation
With assistance from the manager, the board has drawn up a risk matrix, which
identifies the key risks to the company. These key risks fall broadly under
the following categories and the implementation of specific mitigating
measures and procedures has taken place in order to reduce the probability and
impact of each risk to the greatest extent possible.
The board considers the key ongoing risks to be:
· Regulatory change · Failure to manage the
discount
· Maintaining market liquidity · Investment underperformance
· Loss of s1158-1159 status · Gearing/interest rate risk
· Operational disruption at the · Foreign exchange risk
manager's premises
· Regulatory, accounting/internal · Counterparty and
control breach operational risk
· Loss of investment team or portfolio
manager
Further details of these risks and how the board manages them can be found in
the 2012 annual report and on the company's website www.securitiestrust.com
Directors' responsibility
In accordance with Chapter 4 of the Disclosure and Transparency Rules, and to
the best of their knowledge, each director of Securities Trust of Scotland,
confirms that the financial statements have been prepared in accordance with
the applicable set of accounting standards and give a true and fair view of
the assets, liabilities, financial position and net return of the company.
Furthermore, each director certifies that the interim management report
includes an indication of important events that have occurred during the first
six months of the financial year, and their impact on the financial
statements, together with a description of the principal risks and
uncertainties that the company faces. In addition, each director of Securities
Trust of Scotland confirms that, with the exception of the management and
secretarial fees, there have been no related party transactions during the six
months to 30 September 2012.
By order of the board
Neil Donaldson, Chairman
Edinburgh 9 November 2012
Manager's Review
Global equity markets continue to follow a volatile but rising trend. In the
first half, we witnessed markets fall in April and May before recovering
through to the end of September. High dividend yielding stocks have
outperformed over the period as a whole, but struggled to keep up with the
broader market in August and September. The MSCI World High Dividend Yield
index, the benchmark, rose by 4.2% over the first half, as telecoms,
healthcare and consumer staples stocks outperformed at the expense of
industrial and material stocks.
As I said in the last annual report, the key driver of these market swings is
investor confidence. This confidence, or lack of, is being fuelled in turn by
the big macroeconomic concerns of the day - the eurozone crisis, the strength
of the US recovery, and slowing growth in China - and how policymakers deal
with each of these issues. A taster of future US policy direction came from
the 1 August Federal Open Market Committee (FOMC) meeting statement, which
highlighted decelerating growth in the first half of 2012 and the Committee's
pledge to 'provide additional accommodation as needed'. This language was
echoed in the Federal Reserve chairman's speech at the Jackson Hole Economic
Symposium at the end of August. Then, in mid-September, we saw the launch of
'QE3' (the third round of quantitative easing), with the FOMC announcing its
intention to purchase an additional US$40 billion of agency mortgage-backed
securities per month. The Federal Reserve said it will continue this programme
until it sees substantial improvement in the labour market. Meanwhile, in
Europe, European Central Bank (ECB) President Mario Draghi unveiled the
details of a new sovereign-debt-purchase programme, in which the ECB will
purchase short-dated bonds of any country, with no limit as long as certain
conditions are met. Japan's central bank followed suit by announcing that it
would boost the size and duration of its government-bond-buying programme,
which is designed to encourage borrowing and spending. So the major central
banks have, in effect, offered concerted largesse to buy time for economies to
return to growth.
The most important conclusion to draw from these actions is that they will
create a scarcity of income. Interest rates and asset yields are likely to
remain lower for longer, which means that the attractiveness of equity yields
increases. The company is focused on investing in quality franchises, at
attractive valuations, that exhibit growth. We also focus on the
higher-yielding areas of the market - the aforementioned policy actions should
ensure that these areas remain attractive for the foreseeable future.
Portfolio review
Performance
For the first half of the year, the portfolio outperformed its benchmark by
just under 1.0%. By region, the range of relative performance was narrow. The
portfolio outperformed Europe by 1.2% and underperformed North America by
1.0%; the other regions were within this range. By sector, the range was also
narrow. Energy and staples outperformed by 0.5% and 0.4%, respectively, and
telecoms and financials underperformed by 0.4% and 0.3%. Meanwhile, seven
individual stocks had an impact of over 0.2%. On the positive side, the
largest contributors were Lawson, the Japanese convenience-store operator,
Inmarsat, the global mobile-satellite-service provider, and Total, the global
energy company. Lawson and Inmarsat have delivered good results this year, and
Total was a well-timed purchase, having been bought after the Elgin spill.
Meanwhile, not holding AT&T and Verizon was a negative for the portfolio, as
both performed strongly on a return of pricing power to the US telecoms
providers. We have been repurchasing AT&T on the back of this positive change.
Elsewhere, MAN Group and Intel - stocks we have now sold - were weak.
Activity
We purchased Total, the French integrated oil company, for several reasons,
including its volume growth after a lacklustre few years, driven by deepwater
West Africa, then LNG and oil sands; strong earnings and cashflow momentum
helped by the higher-margin new projects; and a portfolio transition driven by
focusing on exploration.
Key sales over the period included Seadrill and Dupont. Both companies are
high-quality cyclicals where we felt that valuations looked stretched after
strong performances. At Seadrill, the Norwegian rig-operating company, we had
seen day rates hit record highs and were skeptical as to how long this could
continue. In the case of Dupont, the US chemicals giant, we felt that after a
strong performance there were better opportunities elsewhere.
The portfolio is positioned with a neutral stance. This means we are
underweight in the most defensive areas of the market, but also the most
cyclical areas. Our main exposure is to companies where we expect consistent
and persistent dividend growth in the mid-single digits. Quality remains our
focus, followed by growth and value. We expect the underlying portfolio to
have dividend growth around the mid-single-digit level over the next 12
months.
Outlook
We remain confident in our neutral stance on markets. The biggest driver is
the economic backdrop which, although showing some signs of improvement,
remains largely negative. Company margins are high, and cashflow generation is
strong, but confidence is low. This is a positive for market dividend growth
in the short term, but we are looking for rising capital expenditure and M&A
activity to signal a return of confidence in corporate boardrooms. Valuations
remain neutral for markets after their rally this year, while the most
positive supports for equities are the attractiveness of dividend yields and
the high levels of cash that many investors appear to be holding. We aim to
capitalise on both of these by being fully invested and focused on companies
that offer growing dividends.
Alan Porter
9 November 2012
PORTFOLIO SUMMARY
Portfolio distribution
By region As at As at
(excluding cash and fixed interest) 30 September 2012 31 March 2012
(%) (%)
Developed Europe 47 45
North America 43 43
Developed Asia Pacific ex Japan 7 8
Japan 3 3
Global emerging markets - 1
100 100
By sector As at As at
(excluding cash and fixed interest) 30 September 2012 31 March 2012
(%) (%)
Healthcare 20 18
Financials 14 15
Consumer goods 14 11
Oil & gas 13 10
Consumer services 11 12
Industrials 11 11
Telecommunications 11 9
Utilities 2 6
Basic materials 2 5
Technology 2 3
100 100
By asset class As at As at
30 September 2012 31 March 2012
(%) (%)
Equities 111 109
Less borrowings (11) (9)
100 100
Largest holdings 30 September 31
As at 30 As at 31 March
2012 September 2012 March 2012 2012
Market value % of total Market % of total
value
£000 portfolio £000 portfolio
Pfizer 6,359 4.6 5,441 4.2
Chevron 6,163 4.4 4,406 3.4
Royal Dutch Shell ('B'
Shares) 4.0
5,296 3.8 5,186
Vodafone Group 5,034 3.6 4,365 3.3
Abbott Laboratories 4,919 3.5 4,213 3.2
Nestlé 4,866 3.5 - -
Philip Morris 3.4 3.6
International 4,795 4,675
Sanofi 4,748 3.4 3,641 2.8
Total 4,607 3.3 - -
Novartis 4,387 3.1 3,913 3.0
UNAUDITED INCOME STATEMENT
Six months to Six months to
30 September 2012 30 September 2011
Revenue Capital Total Revenue Capital Total
Note £000 £000 £000 £000 £000 £000
Gains/(losses) on 6 - 3,525 3,525 - (8,655) (8,655)
investments
Currency (losses)/gains 1 (286) (285) 19 73 92
Income 3 3,445 - 3,445 3,663 - 3,663
Investment management fee (125) (233) (358) (50) (93) (143)
Performance fee - - - - (372) (372)
Other expenses (200) - (200) (286) - (286)
Net return before finance 3,121 3,006 6,127 3,346 (9,047) (5,701)
costs and taxation
Finance costs (45) (89) (134) (68) (127) (195)
Net return on ordinary 3,076 2,917 5,993 3,278 (9,174) (5,896)
activities before taxation
Taxation on ordinary 5 (275) - (275) (95) - (95)
activities
Return attributable to
ordinary redeemable 2,801 2,917 5,718 3,183 (9,174) (5,991)
shareholders
Return per ordinary
redeemable share 2 2.77p 2.88p 5.65p 3.17p (9.15p) (5.98p)
(Audited)
Year to
31 March 2012
Revenue Capital Total
Note £000 £000 £000
Gains/(losses) on investments 6 - 2,738 2,738
Currency (losses)/gains (17) (135) (152)
Income 3 6,353 - 6,353
Investment management fee (102) (189) (291)
Performance fee - (372) (372)
Other expenses (541) - (541)
Net return before finance costs and taxation 5,693 2,042 7,735
Finance costs (109) (202) (311)
Net return on ordinary activities before taxation 5,584 1,840 7,424
Taxation on ordinary activities 5 (354) - (354)
Return attributable to ordinary redeemable 5,230 1,840 7,070
shareholders
Return per ordinary redeemable share 2 5.22p 1.83p 7.05p
The total columns of this statement are the profit and loss accounts of the
company.
The revenue and capital items are presented in accordance with the Association
of Investment Companies (AIC) SORP.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the period.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the company have been reflected in the above statement.
UNAUDITED BALANCE SHEET
As at As at (Audited)
30 September 2012 30 September 2011 As at
31 March 2012
Note £000 £000 £000 £000 £000 £000
Non-current assets
Investments at fair
value through
profit or loss
Listed on Exchanges 36,285 34,987 38,538
in the UK
Listed on Exchanges 103,457 80,514 92,088
abroad
6 139,742 115,501 130,626
Current assets
Loans and 7 525 726 718
receivables
Cash at bank 4,179 4,330 -
4,704 5,056 718
Creditors
Amounts falling due 8 (17,107) (11,250) (11,282)
within one year
Net current (12,403)
liabilities (6,194) (10,564)
Net assets 127,339 109,307 120,062
Capital and
reserves
Called up ordinary 1,035 1,003 1,003
share capital
Capital redemption 78 78 78
reserve
Special
distributable 113,364 109,411 109,411
capital reserve
Capital reserve 9,630 (4,301) 6,713
Revenue reserve 3,232 3,116 2,857
127,339 109,307 120,062
Net asset value per
ordinary redeemable 2 123.02p 109.02p 119.75p
share
UNAUDITED STATEMENT OF CASH FLOW
(Audited)
Six months to Six months to Year to
30 September 2012 30 September 2011 31 March 2012
Note £000 £000 £000 £000 £000 £000
Net cash inflow
from operating 9 2,616 2,663 4,278
activities
Servicing of
finance
Finance costs (155) (232) (370)
Taxation
Overseas
withholding tax - (95) -
suffered
Taxation recovered (62) - (28)
Capital expenditure
and financial
investment
Payments to acquire (23,768) (90,929) (122,790)
investments
Receipts from
disposal of 21,029 98,345 126,674
investments
Net cash
(outflow)/inflow (2,739) 7,416 3,884
from investing
activities
Equity dividends 4 (2,426) (2,356) (4,662)
paid
Net cash
(outflow)/inflow
(2,766) 7,396 3,102
before use of
liquid resources
and financing
Financing
Repurchase of
ordinary share - - (76)
capital
Issue of ordinary 3,985 - -
share capital
Net movement in
short-term 3,000 (3,200) (3,240)
borrowings
Net cash
inflow/(outflow) 6,985 (3,200) (3,316)
from financing
Increase/(decrease)
in cash for the 4,219 4,196 (214)
period
Reconciliation of
net cash flow to
movements in net
debt
Increase/(decrease) 4,219 4,196 (214)
in cash as above
Net movement in
short-term (3,000) 3,200 3,240
borrowings
Change in net debt
resulting from cash 1,219 7,396 3,026
flows
Opening net debt
(11,040) (14,066) (14,066)
Closing net debt
(9,821) (6,670) (11,040)
UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Called Capital Special Capital Revenue Total
up redemption distributable reserve reserve
ordinary reserve capital
share reserve
capital
For the six Note £000 £000 £000 £000 £000 £000
months to 30
September 2012
As at 31 March
2012 1,003 78 109,411 6,713 2,857 120,062
Return
attributable
to - - - 2,917 2,801 5,718
shareholders
Ordinary
shares issued
during the 32 - 3,953 - - 3,985
year
Dividends paid 4 - - - - (2,426) (2,426)
Balance at 30
September 2012 1,035 78 113,364 9,630 3,232 127,339
For the six
months to 30
September 2011
As at 31 March
2011 1,003 78 109,411 4,873 2,289 117,654
Return
attributable
to - - - (9,174) 3,183 (5,991)
shareholders
Dividends paid 4 - - - - (2,356) (2,356)
Balance at 30
September 2011 1,003 78 109,411 (4,301) 3,116 109,307
For the year
ended 31 March
2012 (Audited)
As at 31 March
2011 1,003 78 109,411 4,873 2,289 117,654
Return
attributable
to - - - 1,840 5,230 7,070
shareholders
Dividends paid 4 - - - - (4,662) (4,662)
Balance at 31
March 2012 1,003 78 109,411 6,713 2,857 120,062
The revenue reserve represents the amount of the company's reserves
distributable by way of dividend.
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
(a) The financial statements have been prepared on a going concern basis and
in accordance with UK Generally Accepted Accounting Practice (UK GAAP) and the
Statement of Recommended Practice for Financial Statements of Investment Trust
Companies and Venture Capital Trusts' (SORP), issued in January 2009.
Dividends - In accordance with FRS 21: 'Events after the balance sheet date',
dividends are included in the financial statements in the period in which they
are paid.
Functional currency - In accordance with FRS 23: 'The effects of changes in
foreign currency', the company is required to nominate a functional currency,
being the currency in which the company predominately operates. The board has
determined that sterling is the company's functional currency, which is also
the currency in which the financial statements are prepared.
(b) Income from equity investments is determined on the date on which the
investments are quoted ex-dividend, or where no ex-dividend date is quoted,
when the company's right to receive payment is established. Income from fixed
interest securities is recognised on an effective yield basis. UK dividends
received are accounted for at the amount receivable and are not grossed up for
any tax credit. Other income includes any taxes deducted at source. Gains and
losses arising from the translation of income denominated in foreign
currencies are recognised in the revenue reserve. Scrip dividends are treated
as unfranked investment income; any excess in value of shares received over
the amount of the cash dividend is recognised in capital reserves. Income from
underwriting commission and traded options is recognised as earned.
(c) Interest receivable and payable and management expenses are treated on an
accruals basis.
(d) The management fee and interest costs are allocated 65% to capital and
35% to revenue in accordance with the board's expected long-term split of
returns in the form of capital gains and income, respectively. The performance
fee is wholly allocated to capital. All other expenses are wholly allocated
to capital.
(e) Gains and losses on realisation of investments and changes in the fair
value of investments which are readily convertible to cash, without accepting
adverse terms, together with exchange adjustments to overseas currencies are
taken to capital reserve.
(f) Foreign currencies are translated at the rates of exchange ruling on the
balance sheet date. Investments are recognised initially as at the trade date
of a transaction. Subsequent to this, the disposal of an investment is
accounted for once again as at the trade date of a transaction.
(g) Revenue received and interest paid in foreign currencies is translated at
the rates of exchange ruling on the transaction date. Any exchange differences
relating to revenue items are taken to the revenue account.
(h) The company's investments are classified as 'financial assets at fair
value through profit or loss' and are therefore valued at bid price. Gains and
losses arising from changes in fair value are included in the capital return
for the period.
(i) All financial assets and liabilities are recognised in the financial
statements.
(j) Deferred tax is recorded in accordance with Financial Reporting Standard
19 (Deferred Tax). Deferred tax is provided on all timing differences that
have originated but not reversed by the balance sheet date. A deferred tax
asset is only recognised to the extent that it is regarded as recoverable. Due
to the company's status as an investment trust company, and the intention to
continue meeting the conditions required to obtain approval in the foreseeable
future, the company has not provided for deferred tax on any capital gains and
losses arising on the revaluation or disposal of investments.
(k) Transaction costs incurred on the purchase and disposal of investments
are recognised as a capital item in the income statement.
(l) Share buybacks are funded through the capital reserve.
(m) The company can use derivative financial instruments to manage risk
associated with foreign currency fluctuations arising on the investments in
currencies other than sterling. This is achieved by the use of forward foreign
currency contracts. Derivative financial instruments are recognised initially
at fair value on the contract date and subsequently remeasured to the fair
value at each reporting date. The resulting gain or loss is recognised as
revenue or capital in the income statement depending on the nature and motive
of each derivative transaction. The fair values of the derivative financial
instruments are included within non-current assets or within current assets or
current liabilities depending on the nature and motive of each derivative
transaction.
2. Revenue returns and net asset value
Six months to Six months to Year to
30 September 2012 30 September 2011 31 March 2012
Revenue Return
Revenue return attributable
to ordinary redeemable
shareholders £2,801,000 £3,183,000 £5,230,000
Average number of shares in
issue during the period 101,300,482 100,259,771 100,259,771
Revenue return per ordinary
redeemable share 2.77p 3.17p 5.22p
Capital return
Capital return attributable
to ordinary redeemable
shareholders £2,917,000 (£9,174,000) £1,840,000
Average number of shares in
issue during the period 101,300,482 100,229,771 100,229,771
Capital return per ordinary
redeemable share 2.88p (9.15p) 1.83p
Total return
Total return per ordinary 5.65p (5.98p) 7.05p
redeemable share
Net asset value per share
Net assets attributable to shareholders
£127,338,939 £109,307,000 £120,062,000
Number of shares in issue at period end
103,509,771 100,259,771 100,259,771
Net asset value per share including
income 123.02p 109.02p 119.75p
3. Income from listed investments
Six months to Six months to Year to
30 September 2012 30 September 2011 31 March 2012
£000 £000 £000
Franked income - equities 972 2,523 3,551
Franked income - fixed 62 93 62
interest and convertibles
Unranked income - equities 2,408 1,034 2,721
Unfranked income - fixed - 10 10
interest and convertibles
3,442 3,660 6,344
Other income
Interest on deposits 3 3 9
3,445 3,663 6,353
4. Dividends
Six months to Six months to Year to
30 September 2012 30 September 2011 31 March 2012
£000 £000 £000
Year ended 31 March 2011 -
fourth interim dividend of - 1,203 1,203
1.20p
Year ended 31 March 2012 -
first interim dividend of - 1,153 1,153
1.15p
Year ended 31 March 2012 -
second interim dividend of - - 1,153
1.15p
Year ended 31 March 2012 -
third interim dividend of - - 1,153
1.15p
Year ended 31 March 2012 -
fourth interim dividend of 1,253 - -
1.25p
Year ended 31 March 2013 -
first interim dividend of 1,173 - -
1.15p
2,426 2,356 4,662
5. Taxation on ordinary activities
Six months to Six months to Year to
30 September 2011 30 September 2010 31 March 2011
£000 £000 £000
Foreign tax 275 95 354
6. Investments
As at As at As at
30 September 30 September 31 March 2012
2012 2011
£000
£000 £000
Fair value through profit or loss
Opening valuation 130,626 131,289 131,289
Opening investment holding gains
(11,914) (20,145) (20,145)
Opening cost 118,712 111,144 111,144
Add: additions at cost 26,479 90,856 122,790
Less: disposal proceeds received (20,888) (97,989) (126,177)
Less: net gain on disposal of (827) 12,952 10,955
investments
Closing cost 123,476 116,963 118,712
Closing investment holding 16,266 (1,462) 11,914
gains/(losses)
Closing valuation 139,742 115,501 130,626
Gains/(losses) on investments
Net (losses)/gains on disposal of (827) 12,952 10,955
investments
Movement in investment holdings 4,352 (21,607) (8,231)
unrealised gains/(losses)
Capital distribution - - 14
3,525 (8,655) 2,738
Transaction costs
During the period expenses were incurred in acquiring or 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 were as follows:
Six months to Six months to Year to
30 September 2012 30 September 2011 31 March 2012
£000 £000 £000
Acquisitions 69 79 158
Disposals 39 56 103
108 135 261
7. Loans and receivables
As at As at As at
30 September 30 September 31 March
2012 2011 2012
£000 £000 £000
Dividends receivable 354 555 632
Special dividends to capital receivable - - -
Interest accrued - 1 -
Due from brokers - 141 -
VAT receivable 33 - -
Tax recoverable 70 8 35
Financial assets held for trading
derivatives that are not designated in
hedge accounting relationships:
Forward foreign currency contracts - 8 3
Prepayments and other debtors 68 13 34
525 726 718
8. Creditors - amounts falling due within one year
As at As at As at
30 September 30 September 31 March
2012 2011 2012
£000 £000 £000
Interest accrued 1 22 -
Due to brokers 2,711 - -
Sterling bank revolving loan 14,000 11,000 11,000
Bank overdraft - - 40
Financial liabilities held for trading
derivatives that are not designated in
hedge accounting relationships:
Forward foreign currency contracts - - 5
Other creditors 395 228 237
17,017 11,250 11,282
The company has an £14,000,000 revolving loan facility with State Street Bank
and Trust Company which expires on 28 September 2013. Under this agreement
£14,000,000 was drawn at 28 September 2012 at a rate of 1.75375% with a
maturity date of 27 December 2012.
The fair value of the sterling loan is not materially different from its
carrying value. The interest rate is set at each roll-over date at LIBOR plus
a margin.
9. Reconciliation of net return before finance costs and taxation to net cash
inflow from operating activities
Six months to Six months to Year to
30 September 30 September 31 March
2012 2011 2012
£000 £000 £000
Net return before finance costs 6,127 (5,701) 7,735
Decrease in accrued income and other 122 198 106
debtors
Increase/(decrease) in creditors 167 (488) (471)
Net (losses)/gains on investments (3,525) 8,655 (2,738)
Taxation withheld from income on (275) (1) (354)
investments
Net cash inflow from operating activities 2,616 2,663 4,278
10. Analysis of net debt
As at Cash flow 30 September 2012
31 March 2012 £000
£000 £000
Cash at bank - 4,179 4,179
Bank overdraft (40) 40 -
Bank borrowings - sterling revolving (11,000) (3,000) (14,000)
loan
Net debt (11,040) 1,219 (9,821)
11. Interim report
The financial information contained in the half-yearly financial report does
not constitute statutory accounts as defined in s434 - 436 of the Companies
Act 2006. The financial information for the six months ended 30 September 2012
and 30 September 2011 has not been audited.
The information for the year ended 31 March 2012 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies. The report of the auditors on those accounts contained
no qualification or statement under s498 (2), (3) or (4) of the Companies Act
2006.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FMMGMDLZGZZM -0- Nov/09/2012 14:34 GMT
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