Final Results
Preliminary announcement of final results for the year ended
31 December 2005(audited)
The directors recommend a final dividend of 5.95p per share making a total for
the year of 9.05p. Subject to the approval of shareholders, the final dividend
will be paid on 19 April 2006 to holders on the register on the record date of 17
March 2006.The preliminary statement has been prepared in accordance with
International Financial Reporting Standards.
Group income statement
for the year ended 31 December
2005 2004
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 '000
UK dividends 9,213 - 9,213 8,021 - 8,021
UK Special 135 - 135 159 - 159
dividends
Overseas dividends 1,442 - 1,442 1,482 - 1,482
Overseas special 13 - 13 - - -
dividends
Interest from 138 - 138 299 - 299
securities
10,941 - 10,941 9,961 - 9,961
Bank deposit 1,068 - 1,068 646 - 646
interest
Trustee and other 23,208 - 23,208 **19,892 - **19,892
related fees
Other income 107 - 107 54 - 54
Total revenue 35,324 - 35,324 30,553 - 30,553
Net gain on - 64,339 64,339 - 30,461 30,461
investments held
at fair value
through profit or
loss
Gross income and 35,324 64,339 99,663 30,553 30,461 61,014
capital gains
Cost of sales (6,994) - (6,994) **(4,983) - **(4,983)
Administrative (12,682) (297) (12,979) (11,936) (203) (12,139)
expenses
Operating profit 15,648 64,042 79,690 13,634 30,258 43,892
Finance costs
Interest payable (2,471) - (2,471) (2,456) - (2,456)
Profit before 13,177 64,042 77,219 11,178 30,258 41,436
taxation
Taxation (1,404) - (1,404) (1,148) - (1,148)
Profit for year 11,773 64,042 75,815 10,030 30,258 40,288
Return per ordinary 64.72 34.41
share (pence)*
Diluted return per 64.72 34.41
ordinary share
(pence)
*No dilutive effect
** Restated to include recoverable legal fees as revenue and cost of sales
Statement of total recognised income and expense
for the year ended 31 December
Revenue Capital Total Revenue Capital Total
2005 2005 2005 2004 2004 2004
£000 £000 £000 £000 £000 £000
Return for the financial 11,773 64,042 75,815 10,030 30,258 40,288
year
Foreign exchange 250 - 250 (177) - (177)
Pension actuarial gains/ 20 - 20 (1,766) - (1,766)
(losses)
Taxation on pensions (6) - (6) 529 - 529
Total incomeand expense 12,037 64,042 76,079 8,616 30,258 38,874
relating to the year
Financial summary
Highlights
31 December 31 December Change
2005 2004 %
pence pence
Share price 288.75 232.50 24.2
NAV per share 289.93 232.85 24.5
NAV per share 283.98 228.10 24.5
After proposed dividend
Earnings per share
- investment trust 5.73 5.06 13.2
- trustee and related 4.32 3.51 23.1
services
Group earnings per share 10.05 8.57 17.3
Dividends per share 9.05 7.55 19.9
Performance
2005 2004
% %
Share price 24.2 4.8
NAV total return 28.5 16.7
FTSE Actuaries All-Share 22.0 12.8
Index total return
Chairman's statement
Performance
Over the year to 31 December 2005, our net asset value total return was 28.5%
compared to a total return of 22.0% for the FTSE Actuaries All-share Index.
Our gross revenue increased over the year by 15.6% from £30.6 million to £35.3
million. Profit attributable to shareholders was £11.8 million, an increase of
17.4% over the previous year as a result of a 13.2% improvement in the
investment trust and a 23.3% improvement in trustee and related services.
Improved company dividends increased the return from the investment trust and
all our trustee related services businesses performed well.
Earnings and dividends
Earnings per share for the year to 31 December 2005 were 10.05p, an increase of
17.3% from last year. The board is recommending a final dividend of 5.95p per
ordinary share (2004: 4.75p), which, together with the interim dividend of
3.10p (2004: 2.80p) gives a total dividend of 9.05p (2004: 7.55p), an increase
of 19.9%. The final dividend will be paid, subject to shareholder approval, on
19 April 2006 to holders on the register on the record date of 17 March 2006.
The policy of the company continues to be to seek growth in both capital and
income
Investment trust
Our portfolio has been managed throughout the year by James Henderson who has
an independent value based approach to investment. During the year the total
return on the portfolio, excluding trustee services profits and the impact of
gearing, was 24.5%, ahead of the FTSE All-Share Index.
We continue to select investments on the basis of what appears most attractive
in the conditions of the time. We will not pay unrealistically high prices but
hope to be able to buy growth shares on reasonable terms. Our policy is to try
to select attractive investments without regard to any investment style or
fashion. We do not feel obliged to hold shares of any particular type of
company or industry or market. We aim to achieve a better return than the FTSE
All-Share Index by good stock picking. We believe that, in the long term,
returns on equities will exceed the cost of our long term borrowing.
Consequently we take on a level of gearing which we believe balances risk with
the objective of increasing the return to shareholders
Growth in the global economy has been reasonably strong, with favourable
implications for company profits and stock markets. Higher energy and commodity
prices did not create the inflationary pressures that might have been expected
and company profits continued to improve.
In the UK, many companies have been benefiting from improved profitability and
dividend growth has been strong.
Trustee and related services
Our trustee and related services business increased revenue by 16.9% and profit
before tax by 22.9%. Most areas of the business have seen continued growth.
The commercial trust division had a busy year and a number of high profile
appointments. Our pension trustee business has seen growth from new and
existing relationships and expects the Pensions Act 2004 to continue to provide
opportunities. Corporate services continue to grow significantly and service of
process is benefiting from the links between London, New York and Hong Kong.
The New York trust business has achieved a profit for the first time and
continues to develop its business in niche markets. Hong Kong has significantly
improved its results and achieved a profit. Channel Islands developed its
position as an independent provider of trustee and corporate services resulting
in a significant increase in income and profit.
In recent years, the deficit of our defined benefit pension scheme has
increased as a result, mainly, of members living longer and lower bond yields.
During the year the decision was taken to keep the scheme open but lower the
group's exposure by reducing future benefits and introducing employee
contributions. The group paid a special contribution of £885,000 in 2005 and
has paid a further special contribution of £1,615,000 in 2006.
Staff
The trustee and related services businesses performed strongly during the year
and made a significant contribution to our income. Their success is dependent
upon the professionalism and commitment of our people, whom I should like to
thank for their hard work during the year.
Douglas McDougall
Group Balance sheet
as at 31 December
Group
2005 2004
£000 £000
Assets
Non current assets
Property, plant and equipment 739 855
Intangible assets 113 193
Investments held at fair value through 380,747 304,100
profit or loss
Other assets 5 7
Deferred tax assets 2,106 2,239
Total non current assets 383,710 307,394
Current assets
Trade and other receivables 7,368 5,624
Other accrued income and prepaid 2,419 1,680
expenses
Other current assets 46 49
Cash and cash equivalents 19,295 24,333
Total current assets 29,128 31,686
Total assets 412,838 339,080
Current liabilities
Trade and other payables 7,912 5,667
Short term borrowings 5,696 144
Corporation tax payable 548 736
Other taxation including social 433 162
security
Deferred income 4,326 4,240
Total current liabilities 18,915 10,949
Non current liabilities
Long term borrowings 39,230 39,204
Retirement benefit obligations 6,443 7,348
Deferred tax - 47
Deferred income 8,626 9,018
Total non current liabilities 54,299 55,617
Total net assets 339,624 272,514
Equity
Called up share capital 5,882 5,875
Share premium 7,231 7,026
Capital redemption 8 8
Shared based payments 114 63
Own shares (963) (927)
Capital reserves 309,075 245,033
Retained earnings 18,204 15,613
Foreign exchange reserve 73 (177)
Total equity shareholders' funds 339,624 272,514
Group cash flow statement
for the year ended 31 December
2005 2004
Operating activities £000 £000
Cash generated from operating activities 14,948 14,412
Taxation (1,315) (236)
Interest paid (2,471) (2,456)
Pension special contribution (885) -
Operating cash flow 10,277 11,720
Investing activities
Capital expenditure (46) (37)
Expenditure on intangible assets (4) (20)
Purchase of investments (71,592) (49,917)
Sale of investments 59,508 56,444
Sale of property, plant and equipment 37 1
Cash flow from investing activities (12,097) 6,471
Financing activities
Dividends paid (9,196) (8,238)
Proceeds of increase in share capital 212 507
Purchase of own shares (36) (360)
Net cash flow from financing activities (9,020) (8,091)
Net (decrease) / increase in cash and cash (10,840) 10,100
equivalents
Cash and cash equivalents at beginning of 24,189 14,266
period
Exchange gains / (losses) on cash and cash 250 (177)
equivalents
Cash and cash equivalents at end of period 13,599 24,189
Cash and cash equivalents comprise
Cash and cash equivalents at beginning of 19,295 24,333
period
Bank loans and overdrafts (5,696) (144)
13,599 24,189
Segmental Analysis
Investment trust Trustee services Total
31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
2005 2004 2005 2004 2005 2004
£000 £000 £000 £000 £000 £000
Segment revenue 10,941 9,961 23,208 19,892* 34,149 29,853*
Other income 61 54 46 - 107 54
Cost of sales - - (6,994) (4,983)* (6,994) (4,983)*
Administration costs (1,684) (1,487) (10,998) (10,449) (12,682) (11,936)
9,318 8,528 5,262 4,460 14,580 12,988
Interest (net) (2,411) (2,450) 1,008 640 (1,403) (1,810)
Return, including profit 6,907 6,078 6,270 5,100 13,177 11,178
on ordinary activities
before
taxation
Taxation (197) (153) (1,207) (995) (1,404) (1,148)
Return, including profit 6,710 5,925 5,063 4,105 11,773 10,030
attributable to
shareholders
Return per ordinary share 5.73 5.06 4.32 3.51 10.05 8.57
Assets 384,362 309,001 28,476 30,079 412,838 339,080
Liabilities (55,579) (50,088) (17,635) (16,478) (73,214) (66,566)
Total net assets 328,783 258,913 10,841 13,601 339,624 272,514
*Restated to include recoverable legal fees as revenue and costs of sales
Changes in geographical distribution
Valuation Purchases Dealing Sales Appreciation/ Investments
costs on
31 £000 acquisitions Proceeds (depreciation) 31 December
December
£000 £000 £000 2005
2004
£000
£000
United Kingdom 223,569 40,256 (219) (31,111) 41,387 273,882
North America 18,942 16,331 (25) (14,631) 3,249 23,866
Europe 32,797 9,263 (41) (13,660) 9,350 37,709
Japan 9,367 5,742 (12) - 4,536 19,633
Other Pacific 19,425 - - (106) 6,338 25,657
304,100 71,592 (297) (59,508) 64,860 380,747
This preliminary announcement does not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The statutory accounts for
the year ended 31 December 2005 will be filed with the Registrar of Companies
in due course together with the auditors' report thereon. The information for
the year ended 31 December 2004 is an extract from the statutory accounts to
that date (amended to reflect the change to International Financial Reporting
Standards ) which has been filed with the Registrar of Companies. Those
accounts included an audit report which was unqualified and which did not
contain a statement under section 237(2) or (3) of the Companies Act 1985.
By order of the board
Law Debenture Corporate Services Limited
Secretary
28 February 2006
Copies of the annual report will be available from the Corporation's registered
office.
The Law Debenture Corporation p.l.c.
www.lawdeb.com
Friday, 31st May 2024
COMPANIES COVERED:
Latest directors dealings
- 2 days ago FDM Group (Holdings)
- 2 days ago Neo Energy Metals
- 2 days ago DCC (CDI)
- 2 days ago 3i Group
- 2 days ago 3i Group