Final Results
GARTMORE ASIA PACIFIC TRUST PLC
ANNOUNCEMENT OF RESULTS
FOR THE YEAR TO 31 MARCH 2006
The Directors announce the Company's unaudited results for the year to 31 March
2006 as follows:-
HIGHLIGHTS
- Net Asset Value per Ordinary share increased by 53.5%, to 258.76p, over the
year to 31 March 2006, compared with an increase of 42.8% in the MSCI AC Asia
Pacific (cum Japan) Index (in sterling terms)
- Mid-market price per Ordinary share increased by 53.3% over the year
- Discount to Net Asset Value of 7.2% at 31 March 2006
CHAIRMAN'S STATEMENT
Performance
Asia Pacific markets rose very strongly over the year to 31 March 2006. I am
pleased to report that your company did well in these testing though welcome
conditions. Net asset value per Ordinary share rose 53.5% over the year
compared with a gain over the same period, in sterling terms, of 42.8% in the
MSCI Asia Pacific (cum Japan) Index, which is our benchmark.
The Company's share price reflected the rise in net asset value, trading at a
discount of 7% to net asset value at the start and at the end of the period,
having traded at a modest premium at one stage during February.
The Company's good performance over the 12 month period was largely generated
by our exposure to South Korea and Japan. Not only were we overweight at a time
when these markets performed well relative to their peers, but also our
Manager's stock selection skills further enhanced returns. As highlighted in
previous reports, the Company has favoured a bias towards `growth' stocks over
recent years, in the belief that global growth prospects had been underrated.
This view is one that appears to have been justified and growth stocks continue
to gain favour.
The level of the Company's borrowing fluctuated between 8% and 17% percent
during the year and for much of the year was near the top of this range
reflecting a positive outlook, especially for Japan.
Strategy and outlook
A major element of the Company's strategy over the past year has been to move
from an underweight to an overweight in Japan, where economic recovery now
appears to be firmly established and whose stock market reflects this. We have
also reduced our overweight in South Korea, although it remains a favoured
market where we aim to profit from a revival in domestic consumption. The
Company's investments will continue to be focused; they are currently
concentrated in the financial, industrial and energy sectors.
Since the end of the financial year, the Asia Pacific markets have been
seriously affected by recent world-wide market weakness. There is concern that
the past benign conditions, characterised by low interest rates and low
inflation with strong economic growth, may be coming to an end. We do not at
present share these concerns for the long-term health of the region's economies
and stock markets. We are continuing to use gearing opportunistically, while
keeping a careful watch on how conditions develop.
Board
The Board has a defined plan for retirement and succession of Directors and in
accordance with this plan Mr Keith Mackrell will retire at the end of this
calendar year. I would like to take this opportunity to thank Mr Mackrell for
his invaluable contribution to the Board and the Company since its inception in
1998.
Gartmore
Following the announcement of the sale of Gartmore Investment Management plc to
Hellman & Friedman LLC and members of Gartmore's senior staff, the Board has
been informed that Philip Ehrmann, who jointly manages the Company's portfolio
with Chris Burling, will be leaving Gartmore in July. The Board is grateful to
Philip for his work on the Company's behalf and will review carefully with
Gartmore their proposed future arrangements for the management of the Company.
INCOME STATEMENT
Year to 31 March 2006
Revenue Capital Total
Return
£'000 £'000 £'000
Income and Capital Profits/(Losses):
Dividends and other income 580 - 580
Net profit/(loss) on investments - 15,870 15,870
-------- -------- --------
Return before Expenses, Finance Costs 580 15,870 16,450
and Taxation
Expenses:
Management fee (296) (387) (683)
Other fees and expenses (225) (305) (530)
-------- -------- --------
Return before Finance Costs and 59 15,178 15,237
Taxation
Finance Costs:
Interest payable (117) - (117)
-------- -------- --------
Return on Ordinary Activities before (58) 15,178 15,120
Taxation
Taxation (66) - (66)
-------- -------- --------
Return to Equity Shareholders after (124) 15,178 15,054
Taxation
====== ====== ======
Total Return per Ordinary share (0.74)p 90.96p 90.22p
INCOME STATEMENT (RESTATED COMPARATIVE)
Year to 31 March 2005
Revenue Capital Total
Return
£'000 £'000 £'000
Income and Capital Profits/(Losses):
Dividends and other income 551 - 551
Net profit/(loss) on investments - (1,227) (1,227)
-------- -------- --------
Return before Expenses, Finance Costs 551 (1,227) (676)
and Taxation
Expenses:
Management fee (230) - (230)
Other fees and expenses (159) (318) (477)
-------- -------- --------
Return before Finance Costs and 162 (1,545) (1,383)
Taxation
Finance Costs:
Interest payable (150) - (150)
-------- -------- --------
Return on Ordinary Activities before 12 (1,545) (1,533)
Taxation
Taxation (58) - (58)
-------- -------- --------
Return to Equity Shareholders after (46) (1,545) (1,591)
Taxation
====== ====== ======
Total Return per Ordinary share (0.28)p (9.26)p (9.54)p
The total return column above for each year represents the Profit & Loss
Account of the Company.
All revenue and capital items derive from continuing activities.
No operations were acquired or discontinued during the year.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Capital Special Capital Capital
Share redemption capital reserve reserve Revenue
capital reserve reserve realised unrealised reserve Total
£000 £000 £000 £000 £000 £000 £000
At 31 March 1,669 2,063 2,961 16,782 6,718 (427) 29,766
2004 as
originally
reported
Restatements - - - (62) 12 - (50)
-------- -------- -------- -------- -------- -------- --------
At 31 March 1,669 2,063 2,961 16,720 6,730 (427) 29,716
2004 (restated)
Net capital - - - 5,396 (6,941) - (1,545)
return from
ordinary
activities
Net revenue - - - - - (46) (46)
return from
ordinary
activities
-------- -------- -------- -------- -------- -------- --------
At 31 March 1,669 2,063 2,961 22,116 (211) (473) 28,125
2005 (restated)
Net capital - - - 10,103 5,075 - 15,178
return from
ordinary
activities
Net revenue - - - - - (124) (124)
return from
ordinary
activities
-------- -------- -------- -------- -------- -------- --------
At 31 March 1,669 2,063 2,961 32,219 4,864 (597) 43,179
2006
====== ====== ====== ====== ====== ====== ======
BALANCE SHEET
At At
31 March 31 March
2006 2005
(restated)
£'000 £'000
Fixed Assets:
Listed investments at fair value 49,287 30,915
through
profit or loss
Current Assets:
Debtors - amounts receivable within one 1,163 2,016
year
Cash at bank 332 212
-------- --------
1,495 2,228
Current Liabilities:
Creditors - amounts payable within one (7,603) (5,018)
year
-------- --------
Net Current Liabilities (6,108) (2,790)
-------- --------
Net Assets 43,179 28,125
====== ======
Capital and Reserves
Called-up share capital 1,669 1,669
Capital redemption reserve 2,063 2,063
Special capital reserve 2,961 2,961
Capital reserve - realised 32,219 22,116
Capital reserve - unrealised 4,864 (211)
Revenue reserve (597) (473)
-------- --------
Equity Shareholders' Funds 43,179 28,125
====== ======
Net Asset Value per Ordinary share 258.76p 168.55p
-------- --------
CASH FLOW STATEMENT
Year to Year to
31 March 31 March
2006 2005
£'000 £'000
Revenue Activities:
Dividends and interest received from 478 417
investments
Interest received on deposits 14 6
Expenses paid (451) (435)
-------- --------
41 (12)
-------- --------
Servicing of Finance:
Interest paid (115) (150)
-------- --------
Investment Activities:
Acquisitions of investments (118,111) (111,022)
Disposals of investments 115,292 111,287
Capital expenditure (36) (131)
-------- --------
(2,855) 134
-------- --------
Cash Outflow before Management (2,929) (28)
of Liquid Resources and Finance
-------- --------
Finance:
Loans drawn/(repaid) 3,042 (102)
-------- --------
Net Cash Inflow/(Outflow) 113 (130)
====== ======
NOTES
For the accounting period beginning on 1 April 2005 the Company had the option
to prepare its financial statements in accordance with International Financial
Reporting Standards (`IFRS'), as issued by the International Accounting
Standards Board. The Board has elected to continue to adopt UK Generally
Accepted Accounting Principles (`UK GAAP'). A number of new Financial Reporting
Standards have been issued as part of the programme to converge UK GAAP with
IFRS. Compliance with these has affected the current year's accounts as
summarised below and the comparative figures for the year ended 31 March 2005
have been restated accordingly. The accounts have been prepared under the
historical cost convention, as modified to include the revaluation of
investments and in accordance with applicable UK Accounting Standards and with
the Statement of Recommended Practice (SORP) for "Financial Statements of
Investment Trust Companies" issued in December 2005. The SORP has been adopted
early due to the implementation of Financial Reporting Standard 26 "Financial
Instruments: Measurement".
The accounting policies used for the year ended 31 March 2005 have continued to
be applied, with the following exceptions:
(a) Investments have been designated as "financial assets at fair value through
profit or loss" and valued at fair value (bid price, or last traded price where
no bid price is available) rather than mid-market value. The effect of this has
been to reduce the valuation of investments, and hence net assets, at 31 March
2006 by £86,000 and at 31 March 2005 by £21,000.
(b) Incidental transaction costs incurred on the purchase of investments which
were previously added to the recorded cost of the investments have been
recognised separately and expensed. This has no effect on net assets or total
return but credits capital reserve - unrealised and reduces capital reserve -
realised by £95,000 at 31 March 2006 and by £76,000 at 31 March 2005.
Management fees and loan finance costs have been charged 100% to the Revenue
account. In accordance with the Statement of Recommended Practice for the
Financial Statements of Investment Trust Companies, the performance fee, when
payable, is allocated to capital reserve.
Total Return per Ordinary share has been calculated on the return for the year
of £15,054,000 (2005: negative return of £1,591,000) and a weighted average of
Ordinary shares in issue during the year of 16,686,767 (2005: 16,686,767).
Revenue Return per Ordinary share has been calculated on the negative return to
Ordinary shareholders of £124,000 (2005: negative £46,000) and a weighted
average of Ordinary shares in issue during the year of 16,686,767 (2005:
16,686,767).
Capital Return per Ordinary share has been calculated on the return to Ordinary
shareholders of £15,178,000 (2005: negative £1,545,000) and a weighted average
of Ordinary shares in issue during the year of 16,686,767 (2005: 16,686,767).
The Net Asset Value per Ordinary share is calculated on net assets of £
43,179,000 (2005: £28,125,000) and 16,686,767 (2005: 16,686,767) Ordinary
shares in issue at the year-end.
ANNUAL GENERAL MEETING
The Company's Annual General Meeting for 2006 will be held at Gartmore House, 8
Fenchurch Place, London EC3M 4PB on Wednesday, 26 July 2006, at 11.00 a.m.
The Directors and the Managers will be available to answer questions and
discuss the Company's performance after the Meeting.
ANNUAL REPORT AND ACCOUNTS
The Report and Accounts for the year ended 31 March 2006 will be posted to
shareholders shortly. Copies will be available from the offices of Gartmore
Investment Limited, Gartmore House, 8 Fenchurch Place, London EC3M 4PB.
NOTE
The above financial information for the year ended 31 March 2006 does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The statutory accounts for the year ended 31 March 2006 will be finalised
on the basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
thereafter. The comparative financial information is based on statutory
accounts for the period ended 31 March 2005. The 2005 statutory accounts, upon
which the Auditors issued an unqualified opinion that did not contain
statements under s237 (2) and (3) of the Companies Act 1985, have been
delivered to the Registrar of Companies.
GARTMORE INVESTMENT LIMITED
SECRETARIES
2 June 2006
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