Interim Results
INVESCO Asia Trust plc
Preliminary Announcement of Unaudited Interim Results
For the Six Months to 31 October 2005
The Company's performance for the six months to 31st October 2005 reflects its
strong outperformance against the benchmark. Over the period, the net asset
value per ordinary share increased from 66.9p to 77.0p, a rise of 15.1%,
compared to the benchmark index, the MSCI (All Country) Far East ex Japan Free
Index, which rose by 12.7% - adjusted for sterling. The Company's share price
increased from 57.8p to 71.5p, while the discount to net asset value at which
the shares trade narrowed to 7.1% from 13.6%.
Since the management of the Company moved to Henley in March 2004, performance
has improved solidly. The turnaround in performance represents an extension of
the Henley-based team's strong long-term track record.
The case for investing in Asian equities remains compelling. Growth prospects
for the region look superior to those of the developed world, driven by
supportive demographics, high savings rates, cost competitiveness, and an
increasingly educated workforce.
Continued strong growth with relatively low inflation is a favourable backdrop
for Asian markets, where earnings growth is expected at around 10% in 2006. At
the company level, debt remains low and corporate returns on equity are high as
capital expenditure remains subdued in Asia ex-China. Companies place a greater
emphasis on generating shareholder returns and are better able to make profits
even in an environment of slowing growth. Importantly, as profitability has
improved, so have dividend payout ratios.
The region is no longer as vulnerable to changing external conditions as in the
past. The combination of income growth, negative real interest rates, and
easier credit availability should support consumer spending. Strong growth in
China and India is also providing a demand boost and the overall economic
growth picture is therefore robust. All indications are that the region will
continue to provide investors with solid investment returns.
As usual, no dividend is being declared in respect of the interim period.
David Hinde
19 December 2005
Statement of Total Return
(Incorporating the Revenue Account)
Six Months to 31 October 2005
(Unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 11,028 11,028
Exchange losses - (62) (62)
Income
Unfranked investment income-
dividends 1,442 - 1,442
Scrip dividends 39 - 39
Deposit interest 22 - 22
Gross return 1,503 10,966 12,469
Investment management fee-note 4 (82) (247) (329)
Other expenses (209) (6) (215)
Net return before finance costs and
taxation 1,212 10,713 11,925
Interest payable and similar (26) (64) (90)
charges-note 4
Return on ordinary activities before
taxation 1,186 10,649 11,835
Tax on ordinary activities (409) 239 (170)
Transfer to reserves 777 10,888 11,665
Return per ordinary share:-note 6
Basic 0.73p 10.28p 11.01p
The Revenue column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the
period.
Statement of Total Return
(Incorporating the Revenue Account)
Year to
30 April
Six Months to 31 October 2004 2005
(Unaudited & Restated)* (Audited &
Restated)*
Revenue Capital Total Total
£'000 £'000 £'000 £'000
Gains on investments - 157 157 5,281
Exchange losses - (52) (52) (114)
Income
Unfranked investment income-
dividends 953 858 1,811 2,772
Scrip dividends 32 - 32 34
Deposit interest 38 - 38 85
Gross return 1,023 963 1,986 8,058
Investment management fee-note 4 (59) (177) (236) (504)
Other expenses (187) - (187) (395)
Net return before finance costs and
taxation 777 786 1,563 7,159
Interest payable and similar (13) (1) (14) (64)
charges-note 4
Return on ordinary activities before
taxation 764 785 1,549 7,095
Tax on ordinary activities (257) 133 (124) (248)
Transfer to reserves 507 918 1,425 6,847
Return per ordinary share:-note 6
Basic 0.48p 0.87p 1.35p 6.46p
* Restated for new UK Accounting Standards.
Balance Sheet
At At At
31 October 30 April 31 October
2005 2005 2004
(Unaudited) (Audited (Unaudited
& Restated)* & Restated)*
£'000 £'000 £'000
Fixed assets
Investments 83,614 68,964 61,584
Current assets
Amounts due from brokers 3,122 324 1,030
VAT recoverable 39 32 25
Prepayments and accrued income 119 246 31
Cash at bank 1,419 5,476 5,962
4,699 6,078 7,048
Creditors: amount falling due
within one year
Amounts owed to brokers (2,165) (160) (2,980)
Short-term loan (4,275) (3,700) -
Accruals and deferred income (280) (300) (227)
(6,720) (4,160) (3,207)
Net current (liabilities)/assets (2,021) 1,918 3,841
Total assets less current 81,593 70,882 65,425
liabilities
Provisions for liabilities and (34) (34) -
charges
Net assets 81,559 70,848 65,425
Capital and reserves
Called up share capital 10,596 10,596 10,596
Share premium account 74,588 74,588 74,588
Other reserves
Capital redemption reserve 650 650 650
Special reserve 25,796 25,796 25,796
Capital reserve-realised (39,912) (46,780) (47,705)
Capital reserve-unrealised 8,187 4,167 155
Revenue reserve 1,654 1,831 1,345
Equity Shareholder's funds 81,559 70,848 65,425
Net asset value per ordinary
share-note 6
Basic 77.0p 66.9p 61.7p
* Restated for new UK Accounting Standards.
Cash Flow Statement
Six Months to Year to Six months to
31 October 30 April 31 October
2005 2005 2004
(Unaudited) (Audited) (Unaudited)
£'000 £'000 £'000
Cash flow from operating activities 914 1,694 1,448
Servicing of finance (117) (28) (26)
Taxation - - -
Capital expenditure and financial
investment
Purchase of investments (59,121) (63,153) (22,760)
Sale of investments 54,708 61,508 25,483
Equity dividends paid (954) (530) (530)
Net cash (outflow)/inflow before
management of liquid resources
and financing (4,570) (509) 3,615
Management of liquid resources 3,213 (2,015) (2,647)
Financing 575 3,700 -
(Decrease)/increase in cash in the (782) 1,176 968
period
Cash (inflow)/outflow from (decrease)/
increase in liquid resources (3,213) 2,015 2,647
Cash inflow from increase in debt (575) (3,700) -
Translation difference (63) (114) (52)
Movement in net funds in the period (4,633) (623) 3,563
Net funds at beginning of period 1,776 2,399 2,399
Net (debt)/funds at end of period (2,857) 1,776 5,962
* Restated for new UK Accounting Standards.
Notes
1. Change in Accounting Policies
The accounts have been prepared under the historical cost convention modified
to include the revaluation of fixed assets and in accordance with applicable UK
Accounting Standards and with the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies'.
The same accounting policies used for the year ended 30 April 2005 have been
applied, with the following exceptions:
(a) Investments - Following the introduction of FRS 26 'Financial Instruments:
Recognition and Measurement', listed investments are now valued at fair value
deemed to be bid-market prices, with effect from 1 January 2005. Prior to this,
the investments were valued at middle-market prices. Comparatives have been
restated to reflect the change as per note 2 below. Where investments are held
at fair value through profit or loss, FRS 26 also requires that the transaction
costs included in gains and losses on investments, should also be disclosed.
The transaction costs included in gains and losses on investments amount to £
414,000 (30 April 2005 (restated): £451,000; 31 October 2004 (restated) £
200,000).
(b) Dividends - Following the introduction of FRS 21 'Events After the Balance
Sheet Date', dividends are not accrued in the accounts unless they have been
declared prior to the balance sheet date. Proposed final dividends are thus
recognised in the period in which they are declared.
2. Prior Period Restatement - Changes in UK Accounting Standards
a) Balance Sheet Restatement
Balances at 30 April 2005
Previously
reported Restated
30 April 2005 Adjustments 30 April 2005
Note £'000 £'000 £'000
Investments i 69,099 (135) 68,964
Net current (liabilities)/ ii 964 954 1,918
assets
Total assets less current 70,063 819 70,882
liabilities
Provisions for liabilities (34) - (34)
and charges
Net Assets 70,029 819 70,848
Share capital 10,596 - 10,596
Share premium 74,588 - 74,588
Capital redemption reserve 650 - 650
Special reserve 25,796 - 25,796
Other capital reserves i (42,478) (135) (42,613)
Revenue reserve ii 877 954 1,831
70,029 819 70,848
Net asset value (p) - basic 66.1 0.8 66.9
Balances at 31 October 2004
Previously
reported Restated
31 October 31 October
2004 Adjustments 2004
Note £'000 £'000 £'000
Investments i 61,706 (122) 61,584
Net current (liabilities)/ 3,841 - 3,841
assets
Total assets less current 65,547 (122) 65,425
liabilities
Share capital 10,596 - 10,596
Share premium 74,588 - 74,588
Capital redemption reserve 650 - 650
Special reserve 25,796 - 25,796
Other capital reserves i (47,428) (122) (47,550)
Revenue reserve 1,345 - 1,345
65,547 (122) 65,425
Net asset value (p) - basic 61.9 (0.2) 61.7
Balances at 30 April 2004
Previously
reported Restated
30 April 2004 Adjustments 30 April 2004
Note £'000 £'000 £'000
Investments i 62,574 (136) 62,438
Net current (liabilities)/ ii 1,562 530 2,092
assets
Total assets less current 64,136 394 64,530
liabilities
Share capital 10,596 - 10,596
Share premium 74,588 - 74,588
Capital redemption reserve 650 - 650
Special reserve 25,796 - 25,796
Other capital reserves i (48,332) (136) (48,468)
Revenue reserve ii 838 530 1,368
64,136 394 64,530
Net asset value (p) - basic 60.5 0.4 60.9
Notes
i Investments are all classified as held at fair value, being bid price for all
listed investments. Previously they were carried at mid-market prices.
ii Dividends are not recognised in the financial statements until they are
declared and approved by shareholders, accordingly no provision is made for
proposed dividends and any proposed dividends are added back to revenue
reserves for the period.
b) Effect on Statement of Total Return
Year ended Six months
ended
30 April 2005 31 October 2004
£'000 £'000
Increase in unrealised gain on 1 14
investments
Recognition of final dividend for (530) (530)
2004
De-recognition of proposed final 954 -
dividend for 2005
3. Statement of Changes in Equity Shareholders' Funds:
Capital Capital Capital
Share Share Redemption Special Reserve- Reserve - Revenue
Capital Premium Reserve Reserve realised unrealised reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 30 April 10,596 74,588 650 25,796 (40,664) (7,668) 838 64,136
2004 (as
Effects of
previously revaluing
stated)
investments
to bid
- - - - - (136) - (136)
Add final
dividend
2004
declared in
2005
- - - - - - 530 530
At 30 April
2004
(restated)
10,596 74,588 650 25,796 (40,664) (7,804) 1,368 64,530
Net return
from
ordinary
activities
- - - - (6,116) 11,971 993 6,848
Final
dividend
for 2004
paid in
2005
- - - - - - (530) (530)
At 30 April
2005 (as
restated)
10,596 74,588 650 25,796 (46,780) 4,167 1,831 70,848
Net return - - - - 6,868 4,020 777 11,665
from
ordinary Final
activities dividend
for 2005
declared
and paid
- - - - - - (954) (954)
At 31 10,596 74,588 650 25,796 (39,912) 8,187 1,654 81,559
October
2005
4. Management Fees and Interest
Investment management fees and interest payable on borrowings are charged 75%
to the capital reserve and 25% to the revenue account.
5. Dividend
No interim dividend has been declared in respect of the year ending 30 April
2006 (2005- nil).
6. Return and net asset value per ordinary share
31 October 30 April 31 October
2005 2004 2004
Net revenue return attributable to
ordinary
shareholders (£'000) 777 993 507
Net capital return attributable to
ordinary
shareholders (£'000) 10,888 5,855* 918*
Closing equity shareholders' funds 81,559 70,848* 65,425*
(£'000)
Number of shares in issue at the
period end on which the net asset
value per ordinary
share was calculated 105,962,425 105,962,425 105,962,425
Weighted average number of shares
in issue at the period end on which
the return per
ordinary share was calculated 105,962,354 105,962,354 105,962,284
Revenue return per ordinary share 0.73 0.94 0.48
(p)
Capital return per ordinary share 10.28 5.53* 0.87*
(p)
Net asset value per ordinary share 77.0 66.9* 61.7*
(p)
*Restated for new UK Accounting Standards - see note 2.
7. 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.
8. Except as detailed in notes 1 and 2, the foregoing information at 30 April
2005 is an abridged version of the Company's full Accounts which carry an
unqualified Auditor's report and did not contain statements under s237(2) and
(3) of the Companies Act 1985 and have been filed with the Registrar of
Companies.
By order of the Board
INVESCO Asset Management Limited
Secretaries
19 December 2005
Monday, 20th May 2024
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