Interim Results
The Edinburgh Investment Trust plc
Preliminary Announcement of Unaudited Results
for the six months ended 30 September 2005
(Past performance is not a guide to future returns. The value of investments
can go down as well as up.)
The objectives of The Edinburgh Investment Trust plc are the achievement of
capital growth at a higher rate than the FTSE All-Share Index and dividend
growth above the rate of UK inflation.
Highlights
* NAV total return of 14% compared to a return on the FTSE All-Share Index
(total return) of 13.6%
* Share price increased by 14.5% compared to FTSE All-Share Index (capital
only) of 11.7%
* Interim dividend increased by 4.8% to 4.40 pence per share
Chairman's Review
The UK Equity Market
The UK equity market performed strongly in the six months under review, a
setback in April being the precursor to five months' steady growth. Over the
six months to 30 September 2005, the FTSE All-Share Index (capital only) rose
by 11.7% to its highest level for four years. Strong corporate profits and
dividends, coupled with higher levels of mergers and acquisitions activity,
drove prices higher. These factors overcame concerns for the robustness of the
domestic and global economies.
Performance
The Company performed satisfactorily in this strong market. Net Asset Value
(NAV) increased by 14.0% on a total return basis - 0.4% more than the
equivalent return of the benchmark FTSE All-Share Index. The share price total
return, incorporating both income and capital, was 17.5%, considerably more
than the rise in the market as a whole. On a capital only basis the share price
rose by 14.5%: this reflecting a reduction in the discount to NAV and compares
with the increase of 11.7% in the equivalent benchmark Index. At a sector
level, the fund benefited from over exposure to the Oil & Gas sector in a
period of rising commodity prices: this was partly offset by an underweight
position in the Mining sector. Gearing - the use of the Company's borrowings -
contributed positively to returns in the rising market and offset modest
under-performance by the underlying investment portfolio.
Dividend
I have explained in previous statements that the Board had felt unable to
recommend an increase in a dividend whilst it was uncovered by earnings. The
Company's dividend receipts are this year showing good growth and the Board
anticipates that the existing dividend will be well covered in the year to 31
March 2006. An interim dividend of 4.40 pence per share (2004: 4.20 pence per
share) will be paid on 2 December 2005. The ex-dividend date will be 9 November
2005.
The Board
We have today announced the appointment of James Pettigrew to the Board. Jim,
who was identified by leading selection consultants, qualified as a Chartered
Accountant in Dundee. Following a number of finance function positions in
Scotland and in London, he has for the past seven years been Group Finance
Director, ICAP plc, the world's largest specialist inter-dealer broker. Jim's
experience will add materially to the skills available to the Board and we look
forward to working with him.
Prospects
The market has now recovered much of the ground lost in the long bear market.
UK corporate profits, particularly from overseas activities, are projected to
remain strong and companies appear committed to reflect this profitability in
higher dividend payments. On the other hand, market falls since the end of the
reporting period demonstrate increasing concerns about the strength of world
economies and the inflationary impact of oil and other commodity prices. Whilst
we have seen some setback from end September levels, the corporate background
which I have described appears to provide a solid foundation to the UK market
and the Board is confident that The Edinburgh Investment Trust will continue to
provide a sound vehicle for long-term saving.
Scott Dobbie
Chairman
28 October 2005
For further information, please contact:
Fidelity Investments International 01737 837844
Richard Miles 020 7961 4616
Charles Payne 020 7961 4477
Stephen Westwood
The Edinburgh Investment Trust plc
Statement of Total Return
for the six months for the six months for the year ended
ended ended
30.09.05 30.09.04 31.03.05
unaudited unaudited unaudited
restated* restated*
revenue capital total revenue capital total revenue capital total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on - 125,734 125,734 - 39,915 39,915 - 130,140 130,140
investments
Cost of - (1,578) (1,578) - (1,540) (1,540) - (4,652) (4,652)
investment
transactions
Income from 19,489 - 19,489 15,817 - 15,817 32,921 - 32,921
investments
Interest 347 - 347 175 - 175 497 - 497
receivable
on short
term
deposits
Interest 1,843 - 1,843 1,855 - 1,855 3,881 - 3,881
receivable
on other
securities
Underwriting - - - 1 - 1 1 - 1
commission
Investment (526) (1,226) (1,752) (464) (1,083) (1,547) (953) (2,223) (3,176)
management
fee
Other (339) - (339) (372) - (372) (797) - (797)
expenses
Exchange - 20 20 20 - (6) (6) - (22) (20)
gains/
(losses)
Net return 20,814 122,950 143,764 17,012 37,286 54,298 35,550 123,243 158,793
before
finance
costs and
taxation
Interest (2,944) (6,870) (9,814) (2,944) (6,870) (9,814) (5,850) (13,651) (19,501)
payable
Return on 17,870 116,080 133,950 14,068 30,416 44,484 29,700 109,592 139,292
ordinary
activities
before
taxation
Tax on (65) - (65) (29) - (29) (40) - (40)
ordinary
activities
Return on 17,805 116,080 133,885 14,039 30,416 44,455 29,660 109,592 139,252
ordinary
activities
after
taxation for
the period
attributable
to equity
shareholders
Return per 56.11p 18.47p 58.01p
ordinary
share
*See Note 2
These financial statements have been prepared in accordance with the AITC
Statement of Recommended Practice (SORP) issued in January 2003 and changes to
the accounting policies as set out in Note 2.
The Edinburgh Investment Trust plc
Balance Sheet
As at As at As at
30.09.05 31.03.05
30.09.04
unaudited unaudited unaudited
restated* restated*
£'000 £'000 £'000
Fixed assets
Investments 1,217,774 1,004,895 1,098,015
Current assets
Debtors 7,043 14,342 12,394
Fidelity Institutional 71,903 93,590 80,060
Cash Fund
Cash at bank 17,744 13,679 23,675
Amounts held at futures 133 - 174
clearing houses and
brokers
96,823 121,611 116,303
Creditors - amounts (12,052) (12,682) (15,582)
falling due within one
year
Net current assets 84,771 108,929 100,721
Total assets less current 1,302,545 1,113,824 1,198,736
liabilities
Creditors - amounts (195,730) (195,479) (195,603)
falling due after more
than one year
Total net assets 1,106,815 918,345 1,003,133
Capital and reserves
Called up share capital 59,237 59,862 59,862
Other reserves 1,047,578 858,483 943,271
Total equity shareholders' 1,106,815 918,345 1,003,133
funds
Net asset value per 465.31p 318.64p 417.10p
ordinary share:
* See Notes 2 and 5
The Edinburgh Investment Trust plc
Cash Flow Statement
For the For the six For the
sixmonths monthsended year
ended ended
30.09.04
30.09.05 31.03.05
unaudited unaudited audited
£'000 £'000 £'000
Net revenue before finance 20,814 17,012 35,550
costs and taxation
Decrease in debtors 4,084 5,808 1,069
Increase/(decrease) in 512 (140) 19
creditors
Expenses charged to (1,226) (1,083) (2,223)
capital
Net cash inflow from 24,184 21,597 34,415
operating activities
Net cash outflow from (9,625) (9,625) (19,250)
servicing of finance
Overseas taxation paid (65) (52) (40)
Net cash inflow from 1,558 47,578 51,022
financial investment
Equity dividends paid (21,363) (21,730) (31,787)
Net cash (outflow)/inflow (5,311) 37,768 34,360
before use of liquid
resources and financing
Net cash inflow/(outflow) 8,157 (21,854) (8,324)
from management of liquid
resources
Net cash outflow from (8,840) (9,751) (9,703)
financing
(Decrease)/increase in (5,994) 6,163 16,333
cash
1. The results for the six months to 30 September 2005 and 30 September 2004,
which are unaudited, constitute non statutory accounts within the meaning of
s240 of the Companies Act 1985. The figures and financial information for the
year ended 31 March 2005 are extracted from the latest published accounts and
have been restated as disclosed below in Notes 2 and 5. Those accounts, on
which the auditors gave an unqualified report, have been delivered to the
Registrar of Companies.
2. Accounting policies
The interim financial statements have been prepared on the basis of the
accounting policies set out in the Company's annual report and accounts for the
year ended 31 March 2005 except as stated below.
UK GAAP is converging with International Financial Reporting Standards ("IFRS")
and the following key changes were made as a result of the introduction of
Financial Reporting Standards ("FRS") 26 and 21.
FRS26: "Financial Instruments: Measurement" requires that quoted investments
are valued at fair value which is deemed to be bid price. The Company's
investments have accordingly been revalued to bid price but no adjustments have
been made to the prior periods' results as the Company has taken advantage of
Paragraph 108D of the Standard and disclosed the effect of valuing the
investments at bid price as shown in Note 5.
FRS26 also requires that where investments are held at fair value through the
profit and loss account the transaction costs should be recognised as a
separate item from gains and losses on investments and prior periods' results
have been restated as disclosed in the Statement of Total Return.
FRS21: "Events after the Balance Sheet Date" states that dividends declared and
approved by the Company after the balance sheet date should not be recognised
as a liability of the Company at the balance sheet date. Prior year results
have accordingly been restated and this is shown below in Note 5.
3. Statement of Total Return
The total column on the Statement of Total Return is the profit and loss
account of the Company.
4. Taxation on return on ordinary activities
30.09.05 30.09.04 31.03.05
unaudited unaudited audited
£'000 £'000 £'000
Overseas taxation 65 29 40
suffered
5. Prior year adjustments and restatements
30.09.05 - 31.03.05
unaudited unaudited unaudited
Equity shareholders' funds £'000 £'000 £'000
Opening balance as previously stated 981,770 883,641 883,641
Effect of prior year adjustment as a 21,363 21,730 21,730
result of a change
in accounting policy regarding the
treatment of proposed
dividends
Opening balance as restated 1,003,133 905,371 905,371
Effect of changing prices from mid to bid (1,405) - -
at 1 April 2005
Total recognised gains before dividends 135,290 44,455 139,252
for the period
Repurchase of ordinary shares (8,840) (9,751) (9,703)
Final dividend paid (21,363) (21,730) (21,730)
Interim dividend paid - - (10,057)
Closing balance as restated 1,106,815 918,345 1,003,133
6. Statement of changes in equityfor the sixmonths ended 30 September2005
Called up Other
share reserves
capital
£'000
£'000
At 1 April 2004: as previously stated 60,699 822,942
Effect of prior year adjustment as a result of a - 21,730
change in the accounting policy regarding the
treatment of proposed dividends
At 1 April 2004: as restated 60,699 844,672
Net recognised gains for the year - 139,252
Dividend to shareholders: prior year - (21,730)
Dividend to shareholders: current year (10,057)
Repurchase of ordinary shares (837) (8,866)
At 31 March 2005:as restated 59,862 943,271
Net recognised gains for the period - 133,885
Dividend to shareholders: prior year - (21,363)
Repurchase of ordinary shares (625) (8,215)
At 30 September 2005 59,237 1,047,578
Copies of the interim report will be posted to shareholders as soon as
practicable. Copies will also be available to the public at the Company's
registered office and from the Secretary at Beech Gate, Millfield Lane, Lower
Kingswood, Tadworth, Surrey KT20 6RP
CB24630
Tuesday, 4th June 2024
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