Half-yearly Report
Invesco Asia Trust plc
Half-Yearly Financial Report for the Six Months to31 October 2007
Key Facts
Invesco Asia Trust plc is an investment trust listed on the London Stock
Exchange.
Objective of the Company
The objective of Invesco Asia Trust plc is to provide long-term capital growth
by investing in a diversified portfolio of Asian and Australasian companies.
The Company aims to achieve growth in its net asset value in excess of the
Morgan Stanley Capital International All Countries Asia Pacific ex-Japan Index,
measured in sterling.
Investment Policy
Invesco Asia Trust plc invests primarily in the equity securities of companies
listed in the stockmarkets of China, Hong Kong, India, Malaysia, Singapore,
South Korea, Taiwan, Thailand and Australasia. It may also invest in unquoted
securities up to 10% of the value of the Company's gross assets and in warrants
and options when it is considered the most economical means of achieving
exposure to an asset.
Share Capital
Between 1 May and 31 October 2007 the Company bought back for cancellation
2,300,000 shares, resulting in there being 103,662,425 ordinary shares in issue
at 31 October 2007. Since 1 November 2007 the Company has bought back a further
9,825,000 ordinary shares for cancellation, reducing the issued share capital
to 93,837,425 ordinary shares.
Performance Statistics
At At
31 October 30 April %
2007 2007 Change
Net assets (£'000) 145,371 116,146 +25.2
Actual gearing 102 107
Asset gearing 102 106
Net asset value per ordinary share 140.2p 109.6p +27.9
Net asset value (total return)(1) +30.0
Mid-market price per ordinary share 122.3p 97.8p +25.0
Discount per ordinary share 12.8% 9.7%
MSCI All Countries Asia Pacific
ex-Japan
Index (adjusted for Sterling)(1) 282.1 214.3 +31.6
MSCI All Countries Asia Pacific
ex-Japan
Total Return Index (adjusted for 512.2 382.5 +33.9
Sterling)(1)
(1) Source: Thomson Financial Datastream.
INTERIM MANAGEMENT REPORT INCORPORATING THE CHAIRMAN'S STATEMENT
Chairman's Statement
Performance and Prospects
The Company's performance for the six months to 31 October 2007 reflects a
strong first-half of the financial year which has resulted in good absolute
returns, although the Company has underperformed its new benchmark index, the
MSCI All Countries Asia Pacific ex-Japan Index. Over the period, the net asset
value per ordinary share increased from 109.6p to 140.2p, a rise of 27.9%,
compared to the benchmark index, which rose by 31.6%. The Company's share price
rose from 97.8p to 122.3p, and the discount to net asset value at which the
shares trade increased from 9.7% at the year-end to 12.8%.
Dividend
No dividend is being declared in respect of the six months to 31 October 2007.
Outlook
Examining the economic and corporate fundamentals of Asia today, there are
reasons for optimism. Economic indicators across the region show few signs of
overheating. Investment as a share of GDP is still running at historically low
levels. By contrast, in the years running up to the Asian financial crisis in
1997, this indicator had increased dramatically. In hindsight, this should
have been seen as a sign that the business cycle was becoming mature and that
returns on capital would come under pressure. This risk is remote in Asia at
present. Bank balance sheets in Asia are generally under-geared and credit
growth has been modest when compared to the 1990s. Aggregate Asian
loan-to-deposit ratios are running at about 65%, by comparison, with more than
100% in the mid-nineties. Again, this situation is not indicative of an
extended business cycle. In fact, it is possible to argue that Asian banks
remain too risk averse in their lending attitudes. With the exception of
India, all Asian economies are running current account surpluses. As a result,
Asia remains a net lender to the world economy. To have such an excess of
saving over investment is an unusual state of affairs for a developing region
and again suggests that most Asian economies are far from overheating. It also
helps to explain why Asia has proven to be so resilient in the face of the
dislocation in global credit over the summer of 2007. In short, Asian
fundamentals appear sound and compare favourably with those of other regions.
However, the expansion of valuations we have witnessed in 2006 and 2007 is of
some concern. In aggregate, Asian valuations are the highest we have seen
since the early 1990s, both for earnings and asset multiples. It is also the
first time that Asia has traded above developed market multiples. In some
markets, in particular China and India, valuations are becoming reminiscent of
those in the technology sector in 1999. To an extent, this can be justified by
the higher growth expected in Asia, but the markets can now only rise
sustainably if superior growth is indeed delivered. This suggests that risk
and reward are now more balanced in Asia than in 2003-2005, when the markets'
increase was largely a reflection of earnings growth and valuations remained
low.
VAT on Management Fees
As reported in the press, HM Revenue & Customs have accepted the European Court
of Justice ruling in a test case to the effect that investment trusts should
not be charged VAT on management fees. For other investment trust companies,
this will result in significant reclaims of VAT. However, this is not the case
for your Company as it invests in non-EU securities and has thus recovered
nearly all of the VAT which it has suffered.
David Hinde
Chairman
18 December 2007
INVESTMENT MANAGEMENT REPORT
Market and Economic Review
Asian markets performed strongly during the period, despite world stockmarkets
falling sharply in August on concerns over subprime mortgage-lending losses in
the US mortgage market. This did impact Asia, with Asian stockmarkets falling
in line with other global markets. However, Asian equities followed with a
sharp rebound. The main reason for this was that Asian banks were perceived to
have relatively little subprime exposure and, therefore, would not suffer any
significant erosion in corporate earnings. More importantly, however, investors
globally were seen to take the view that Asia would not only be able to
decouple from any effects of the US subprime crisis, but could also now
engineer its own growth path in a sustainable way. The decision by the US
Federal Reserve (Fed) to cut its benchmark interest rate by 50 basis points in
September added further momentum to Asian markets, with a number hitting new
highs towards the end of the period. Hopes that lower US interest rates will
underpin global economic growth and sustain demand for commodities allowed
Asian markets to outperform other developed stockmarkets, with the two largest
markets, China and India, being in the vanguard of performance. The general
perception that the Fed would be forced to continue to loosen monetary policy
to stave off further declines in the US housing market has provided a positive
backdrop for the Asian region as a whole.
Within individual markets, Hong Kong equities hit new all-time highs, surging
on speculation that money from China will pour into the market as the Chinese
government eases investment restrictions on Chinese investors. Hong Kong
H-shares (Chinese stocks listed on the Hong Kong stock exchange), as
represented by the Hang Seng China Enterprises index, almost doubled over the
period, closing 94.4% higher in sterling terms. Hong Kong's main Hang Seng
index also breached the 30,000-point barrier with ease, gaining 49.9% (in
sterling terms) over the period.
China's domestic stockmarkets continued their rise, breaking new record highs
throughout the period. The local Shanghai SE Composite index, which measures
domestically traded A-shares, reached a new landmark high of 6,092 on 16
October, before some profit-taking emerged. The index ended the period 54.1%
higher, and is up by 119.3% (both in sterling terms) since the turn of the
year. This was despite the People's Bank of China continuing to hike both
interest rates and the legal reserve-rate requirement for banks.
Other Asian markets also enjoyed strong gains: India's main index, the Mumbai
Sensex 30, was up by 44.2%, while Korea (+33.2%), Thailand (+32.9%) and
Indonesia (+27.1%) also participated in the general rally. In fact, the only
market that failed to make double-digit gains was Malaysia, where its
relatively defensive nature impeded gains.
Macroeconomic data for the region remained robust. China led the way, reporting
double-digit growth for both the second and third quarters of 2007. China's
economy grew at its fastest pace in 12 years in the second quarter, with the
economy expanding by 11.9% from a year earlier, while in the third quarter the
economy expanded by 11.5% year-on-year (y-o-y). This was lower than the second
quarter, but still maintained the double-digit growth that China has enjoyed
for the last two years. At China's five-year Communist Party congress, China's
president, Mr Hu Jintao, announced that maintaining China's rapid economic
growth remained the ruling Communist Party's "top priority". However, China's
inflation rate has remained a concern. As food prices have soared, inflation
has accelerated this year, with the rate climbing to 6.5% y-o-y in October, the
highest in more than a decade and well above the central bank's 3% target rate.
On a more positive note, non-food CPI inflation has remained relatively low at
around 1%.
Elsewhere in Asia, growth has remained buoyant despite strong evidence that the
US economy has begun to slow. India's economy grew by 9.3% y-o-y in the second
quarter, up from 9.1% in the previous quarter, led by robust manufacturing and
services. Indian inflation has also come down sharply, from a peak of 6.69% in
January to 2.97% y-o-y at the end of October, the lowest rate in more than five
years. Hong Kong's economy grew by 6.9% y-o-y in the second quarter, while
Australia, Singapore, South Korea, Malaysia, Taiwan, Thailand, Indonesia and
the Philippines all reported similarly strong growth figures. The Philippines,
regarded as one of the fundamentally weaker economies in the region, recorded
one of its best-ever GDP growth figures, with the economy expanding 7.5% y-o-y
in the second quarter. Along with export growth, domestic demand has also been
strong, with retail sales across the Asia-Pacific region remaining robust,
while inflationary pressures, excluding those in China, have remained stable.
Company Performance
Over the period, the Company provided strong absolute returns, gaining 27.9%
over the six months to 31 October 2007. However, in relative terms, the Company
underperformed its new benchmark index, the MSCI All Countries Asia Pacific
ex-Japan Index which ended the period 31.6% higher. At a country level, stock
selection in Australia proved positive. Our lack of exposure to the Australian
banking sector, along with our holding in Newcrest Mining added the most value.
In contrast, our lack of exposure to some of the runaway Chinese stocks, and
poor returns from some of our holdings in India and Malaysia, negatively
impacted on relative performance. On a sector basis, stock selection within the
telecommunications sector proved positive. Our holding in China Mobile, where
mobile phone user numbers continue to increase at a remarkable rate, doubled in
value. Conversely, disappointing returns from some of our financial and
industrial holdings was a negative. Our underweight exposure to the
outperforming energy sector also proved to be a drag on relative performance.
Outlook for Asian Economies and Markets
Macroeconomic data in the region has provided a positive backdrop for equities,
with economic growth remaining superior to developed markets. However, the key
issue for Asian markets over the next 12 months will be the degree to which
Asian growth will be affected by the global economic slowdown. So far
indications suggest that the impact will be low. US nominal GDP growth has
already slowed substantially, but, over the same period, Asian GDP growth has
held up strongly. This is quite different from what happened in 2001. To date,
Asian exports have held up well. This has been due generally to the strength in
demand from Europe and China, which has offset weakening exports to the US.
Industrial production growth has also begun to outperform the growth in
exports, which indicates that growth is becoming more broad-based. In
particular, investment which has not been a large driver of growth in recent
years (outside China) has started to increase meaningfully. Increasing
investment will be the key to Asian growth becoming less synchronised with
growth elsewhere in the world. It is also important to note that Asia is
relatively immune from the dislocations in the financial systems afflicting the
US and Europe at present. With most countries running current account
surpluses, Asia is a net lender into the world financial system and local
banking markets remain very liquid. For these reasons, we believe Asia has a
better chance of exhibiting relative resilience.
However, with the strong rebound in Asian markets since August, this positive
outcome is becoming priced in and is fast becoming the consensus view. This is
concerning as it is unrealistic to expect Asia to sail through with no impact
at all from slowing global growth. For instance, it is likely that as growth
slows in Europe, Asian exports will begin to be impacted. As yet, however,
little of this is reflected in analyst earnings estimates, which have in fact
moved up in recent months. It is likely that sectors most exposed to global
growth will experience downgrades in the coming months. At approximately 17
times 2008 earnings, Asia is trading towards the upper end of its historical
trading range. On price-to-book multiples, Asia is trading at record levels.
Also, in certain areas of the markets, especially in China and India,
valuations are more extreme. Some portion of this re-rating can be explained by
the willingness of investors to pay a higher price for earnings growth as it
becomes more scarce globally. In addition, the likelihood of lower interest
rates is lending valuation support in Asia. However, from this level it is
conservative to expect little in the way of re-rating for the market as a whole
and investment returns more in line with earnings growth. If this proves to be
the case, careful stock selection will become even more essential.
In terms of strategy, we have a balanced approach to investing, tackling the
two competing influences on the region at present: liquidity and valuation. We
have reduced our exposure to Chinese domestic shares as valuations have become
increasingly overstretched. We continue, however, to look for opportunities
where we feel comfortable with valuations as the liquidity situation remains
extremely strong. We have added to some of the less overvalued names in China,
but not as aggressively as other investors. Our aim has been to find growth,
but in areas where we feel that valuations are not excessive.
Instead, we favour Hong Kong, where falling US interest rates and continuing
strong growth in China is a very potent combination. The strong growth in China
is leading to inflation picking up in Hong Kong but, as interest rates are
linked with the US economy, rates are likely to fall in tandem. This is a
strong positive for the property market in Hong Kong, and this is a strategy
that we will continue to follow as long as Hong Kong shares remain cheap
relative to their Chinese counterparts.
We have also increased the weighting in India, where we now have a slightly
overweight position as a result of our more confident view on the Indian
economy. In contrast, we have reduced our positions in Korea, Malaysia and the
Philippines. These markets offer good value, but are not likely to outperform
other areas of Asia in the short-term.
On a sector basis, the Company is strongly focused on the financial and
consumer sectors. We have also been selectively adding to our technology
weighting as some areas now look better value. In contrast, we are underweight
in the energy sector, although we have reduced the underweighting in oil
companies. With oil prices hitting new highs, we have raised our weighting, and
have started a new position in CNOOC. However, we still remain underweight in a
number of cyclical stocks, where we believe some valuations are excessive given
that we are at or near the top of the cycle. In areas, such as Chinese
industrials or Korean shipbuilders, share prices have risen dramatically. This
has negatively impacted on relative performance, but we believe that, in the
areas we favour, valuations are sufficiently compelling for us to reserve
exposure on a long-term view.
Stuart Parks
Manager
18 December 2007
Related Parties
Invesco Asset Management Limited ("IAML"), a wholly owned subsidiary of Invesco
Plc (formerly AMVESCAP plc), acts as Manager and Company Secretary to the
Company. Details of IAML's services and fees arrangements are given in the
latest Annual Report and Accounts, which is available on the Company's website.
Principal Risks and Uncertainties
The Company's investments are traded on the Far Eastern, Indian and
Australasian stockmarkets. The principal risk for investors in the Company is
of a significant fall and/or a prolonged period of decline in the markets. This
could be triggered by unfavourable developments within the region or events
outside it. Additionally, performance is geared by bank borrowings which may
accentuate any decline in performance. Other significant risks include
consistent underperformance by the Manager, or the market rating of the Company
failing to reflect good performance.
While the Board obviously cannot influence market movements, it is vigilant in
monitoring and taking steps to mitigate the effects of falls in markets should
they occur. As has been indicated, the performance of the Manager is carefully
monitored by the Board, and the continuation of the Manager's mandate is
revisited every six months. The Board has established guidelines to ensure that
the investment policy that it has approved is pursued by the Manager. The Board
and the Manager maintain an active dialogue with the aim of ensuring that the
market rating of the Company's shares reflects the underlying net asset value;
and there are in place both buy-back and issuance facilities to assist in the
management of this process.
The Company is subject to various laws and regulations by virtue of its status
as an investment trust and its listing on the London Stock Exchange. A breach
of s.842 of the Income and Corporation Taxes Act 1988 (ICTA) could lead to the
Company being subject to capital gains tax on the profits arising from the sale
of its investments. A serious breach of other regulatory rules might lead to
suspension from the Stock Exchange or to a qualified Audit Report. Other
control failures, either by the Manager or any other of the Company's service
providers, might result in operational or reputational problems, erroneous
disclosures or loss of assets through fraud, as well as breaches of
regulations.
The Manager reviews the level of compliance with s.842 ICTA and other financial
regulatory requirements on a daily basis. All transactions, income and
expenditure are reported to the Board. The Board regularly considers all risks,
the measures in place to control them and the possibility of any other risks
that could arise. The Board ensures that satisfactory assurances are received
from service providers. The Manager's Compliance Officer produces regular
reports for review by the Company's Audit Committee.
In the view of the Board, these principal risks and uncertainties are equally
applicable to the remaining six months of the financial year as they were to
the six months under review.
Directors' Responsibility Statement
in respect of the preparation of the half-yearly financial report
The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and UK Accounting
Standards.
The Directors confirm that to the best of their knowledge:
* the condensed set of financial statements contained within the half-yearly
financial report have been prepared in accordance with the Accounting
Standards Board's Statement `Half-Yearly Financial Report';
* the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8 of the FSA's Disclosure and
Transparency Rules; and
* the interim management report includes a fair review of the information
required on related party transactions.
Signed on behalf of the Board of Directors.
David Hinde
Chairman
18 December 2007
Twenty-five largest holdings at 31 October 2007
Market
Value % of
Company Principal Activity Country £'000 Portfolio
China Mobile Telecommunication Hong Kong 8,076 5.4
Services
BHP Billiton Materials Australia 6,507 4.4
Jardine Matheson Diversified Financials Hong Kong 5,744 3.9
Samsung Electronic Technology Hardware South Korea 3,777 2.5
Equipment
Cheung Kong Real Estate Hong Kong 3,751 2.5
Hon Hai Precision Technology Hardware Taiwan 3,664 2.5
Equipment
Newcrest Mining Materials Australia 3,570 2.4
LG Philips LCD Technology Hardware South Korea 3,125 2.1
Equipment
China Construction Banking China 3,104 2.1
Bank
Mediatek Semiconductor Taiwan 2,873 2.0
Manufacturing
Taiwan Semiconductor Taiwan 2,837 1.9
Semiconductor Manufacturing
Manufacturing
Sina Software & Services China 2,771 1.9
Keppel Capital Goods Singapore 2,624 1.8
Kookmin Bank Banking South Korea 2,570 1.7
Wharf Diversified Financials Hong Kong 2,549 1.7
QBE Insurance Australia 2,484 1.7
Daelim Industrial Capital Goods Korea 2,423 1.6
DBS Banking Singapore 2,136 1.4
Downer Edi Capital Goods Australia 2,129 1.4
Hang Seng Banking Hong Kong 2,078 1.4
Korea Investment Diversified Financials South Korea 1,991 1.3
China Resources Retailing Hong Kong 1,976 1.3
United Phosphorus Chemicals India 1,968 1.3
West China Cement Materials United 1,893 1.3
Kingdom
76,620 51.5
Other investments 72,118 48.5
Total investments 148,738 100.0
Condensed Income Statement
Year to
Six Months to Six Months to 30 April
31 October 2007 31 October 2006 2007
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on
investments
held at fair value
through profit and - 32,898 32,898 - (6,067) (6,067) 9,623
loss
Losses on foreign - (67) (67) - (153) (153) (160)
currency
revaluation
Income
UK dividends 19 - 19 26 - 26 18
Overseas dividends 1,613 - 1,613 1,574 - 1,574 2,636
Scrip dividends 202 - 202 61 - 61 151
Deposit interest 13 - 13 6 - 6 11
Gross return 1,847 32,831 34,678 1,667 (6,220) (4,553) 12,279
Investment (137) (411) (548) (95) (285) (380) (832)
management fee -
note 2
Other expenses (229) (15) (244) (227) (74) (301) (465)
Net return before 1,481 32,405 33,886 1,345 (6,579) (5,234) 10,982
finance
costs and taxation
Interest payable and (70) (211) (281) (28) (86) (114) (380)
similar
charges - note 2
Return on ordinary
activities
before taxation 1,411 32,194 33,605 1,317 (6,665) (5,348) 10,602
Tax on ordinary (466) 187 (279) (367) 233 (134) (393)
activities
Net return on 945 32,381 33,326 950 (6,432) (5,482) 10,209
ordinary
activities after tax
for the
period
Return per ordinary
share -
note 3
Basic 0.9p 30.6p 31.5p 0.9p (6.1)p (5.2)p 9.6p
The total column of this statement represents the Company's profit and loss
account prepared in accordance with UK Accounting Standards. The supplementary
revenue and capital columns are presented for information purposes as
recommended by the guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing operations
and the Company has no other gains or losses, therefore no Statement of Total
Recognised Gains and Losses is presented. No operations were acquired or
discontinued in the period.
Condensed Balance Sheet
At At At
31 October 30 April 31 October
2007 2007 2006
(unaudited) (audited) (Unaudited)
£'000 £'000 £'000
Fixed assets
Investments held at fair value
through
profit or loss 148,738 123,057 108,160
Current assets
Amounts due from brokers 820 193 101
Tax recoverable - 77 3
VAT recoverable 59 51 35
Prepayments and accrued income 60 206 148
Cash at bank 1,192 1,360 1,736
2,131 1,887 2,023
Creditors: amounts falling due
within one year
Amounts owed to brokers (1,379) (392) (2,035)
Tax payable (219) - -
Short-term loan (3,500) (8,000) (7,300)
Accruals and deferred income (390) (357) (379)
(5,488) (8,749) (9,714)
Net current liabilities (3,357) (6,862) (7,691)
Total assets less current 145,381 116,195 100,469
liabilities
Provisions for liabilities
Deferred tax (10) (49) (14)
Net assets 145,371 116,146 100,455
Capital and Reserves
Share capital 10,366 10,596 10,596
Share premium account 74,588 74,588 74,588
Other reserves
Capital redemption reserve 880 650 650
Special reserve 23,073 25,796 25,796
Capital reserve - realised (3,643) (21,256) (26,535)
Capital reserve - unrealised 38,169 23,401 13,473
Revenue reserve 1,938 2,371 1,887
145,371 116,146 100,455
Net asset value per share - note 3
Basic 140.2p 109.6p 94.8p
Condensed Cash Flow Statement
Six months Year to Six monthsto
to
31 October 30 April 31 October
2007 2007 2006
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Cash inflow from operating
activities 1,046 1,172 857
Servicing of finance
Interest paid on bank loans (283) (382) (118)
Taxation - (179) -
Dividends paid (1,378) (1,272) (1,272)
Capital expenditure and
financial
investment
Purchase of investments (62,335) (88,598) (40,466)
Sale of investments 70,072 88,481 41,290
Net cash inflow/(outflow) before
management of liquid resources
and financing 7,122 (778) 291
Management of liquid resources 278 (468) -
Financing (7,223) 1,200 500
Increase/(decrease) in cash in
the period 177 (46) 791
Reconciliation of net cash flow
to
movement in net funds/(debt)
Increase/(decrease) in cash in
the
period 177 (46) 791
Cash flow from movement in debt 4,500 (1,200) (500)
Cash movement from (decrease)/
increase in liquid resources (278) 468 -
Translation difference (67) (160) (153)
Movement in net debt in the
period 4,332 (938) 138
Net debt at beginning of period (6,640) (5,702) (5,702)
Net debt at end of period (2,308) (6,640) (5,564)
Analysis of changes in net debt
Brought forward:
Cash at bank 892 1,098 1,098
Cash placed on short-term 468 - -
deposit
Debt due within one year (8,000) (6,800) (6,800)
Net debt brought forward (6,640) (5,702) (5,702)
Movements in the period:
Cash inflow/(outflow) from bank 110 (206) 638
Cash (recalled from)/placed on
short-term deposit (278) 468 -
Debt due within one year 4,500 (1,200) (500)
Net debt at end of period (2,308) (6,640) (5,564)
Condensed Reconciliation of Movements in Shareholders' Funds
Capital Capital Capital
Share Share Redemption Special Reserve Reserve - Revenue
-
Capital Premium Reserve Reserve Realised Unrealised Reserves Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
For the six
months
ended 31
October
2006
(Unaudited)
Balance as at 10,596 74,588 650 25,796 (28,357) 21,727 2,209 107,209
1 May
2006
Net return - - - - 1,822 (8,254) 950 (5,482)
from
ordinary
activities
Final dividend - - - - - - (1,272) (1,272)
for
2006
At 31 October 10,596 74,588 650 25,796 (26,535) 13,473 1,887 100,455
2006
For the year
ended
30 April 2007
(Audited)
Balance as at 10,596 74,588 650 25,796 (28,357) 21,727 2,209 107,209
1 May
2006
Net return - - - - 7,101 1,674 1,434 10,209
from
ordinary
activities
Final dividend - - - - - - (1,272) (1,272)
for
2006
At 30 April 10,596 74,588 650 25,796 (21,256) 23,401 2,371 116,146
2007
For the six
months
ended 31
October
2007
(Unaudited)
Balance as at 10,596 74,588 650 25,796 (21,256) 23,401 2,371 116,146
1 May
2007
Net return - - - - 17,613 14,768 945 33,326
from
ordinary
activities
Final dividend - - - - - - (1,378) (1,378)
for
2007
Share buy (230) - 230 (2,723) - - - (2,723)
backs
At 31 October 10,366 74,588 880 23,073 (3,643) 38,169 1,938 145,371
2007
Notes to the Condensed Financial Statements
1. The condensed financial statements have been prepared using the same
accounting policies as those adopted in the Annual Report and Accounts for the
year ended 30 April 2007, which were prepared under the historical cost
convention and are consistent with applicable UK Accounting Standards and with
the Statement of Recommended Practice "Financial Statements of Investment Trust
Companies".
2. Investment management fees and interest payable on borrowings are charged
75% to the capital reserve and 25% to the revenue account.
3. Basis of Returns and Net Asset Value
Six months to Six months to Year to
31 October 31 October 30 April
2007 2006 2007
Returns:
Returns after tax:
Revenue (£) 945,000 950,000 1,434,000
Capital (£) 32,381,000 (6,432,000) 8,775,000
Total (£) 33,326,000 (5,482,000) 10,209,000
Weighted average number of
ordinary
shares in issue during the 105,713,658 105,962,425 105,962,425
period
Net Asset Value:
Shareholders' funds (£) 145,371,000 100,455,000 116,146,000
Ordinary shares in issue at the
period end 103,662,425 105,962,425 105,962,425
4. Movements in Share Capital
Six months to Six months to Year to
31 October 31 October 30 April
2007 2006 2007
Number of ordinary shares:
Brought forward 105,962,425 105,962,425 105,962,425
Shares bought back and cancelled (2,300,000) - -
In issue at period end 103,662,425 105,962,425 105,962,425
Average price of shares 117.57p - -
repurchased
Since the period end 9,825,000 shares have been repurchased at an average price
of 113.96p per ordinary share, and cancelled.
5. The Company paid a final dividend of 1.3p per ordinary share for the year
ended 30 April 2007 on 30 July 2007 to shareholders on the register on 6 July
2007. The Directors do not propose the payment of an interim dividend (2006:
nil).
6. It is the intention of the Directors to conduct the affairs of the Company
so that it satisfies the conditions for approval as an investment trust company
set out in section 842 of the Income and Corporation Taxes Act 1988.
7. The financial information contained in this half-yearly report, which has
not been reviewed or audited by the independent auditors, does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
financial information for the half years ended 31 October 2007 and 31 October
2006 has not been audited. The figures and financial information for the year
ended 30 April 2007 are extracted and abridged from the latest published
accounts and do not constitute the statutory accounts for the year. Those
accounts have been delivered to the Registrar of Companies and included the
Report of the Independent Auditors, which was unqualified and did not include a
statement under either section 237(2) or 237(3) of the Companies Act 1985.
By order of the Board
Invesco Asset Management Limited
Secretary
18 December 2007
Monday, 20th May 2024
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