Interim Results

Aberdeen New Dawn Invest Trust PLC 22 December 2005 ABERDEEN NEW DAWN INVESTMENT TRUST PLC ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS For the six months ended 31 October 2005 Background I am pleased to report that New Dawn achieved an excellent performance over the six months under review. During this period, the net asset value of the Company increased 21.9% to 402.65p, outperforming the benchmark MSCI Asia Pacific ex-Japan Index, which rose 14.6%. The share price gained 34.3% to 415p. At 30 April 2005, the Company's shares were trading at a discount of 6.5% to the net asset value, but by 31 October 2005 they were trading at a premium of 3.1%. As is our normal practice, we shall recommend a final dividend at our financial year-end. Overview The flow of foreign money into the region has allowed Asian stock markets to continue their improvement. After a mixed performance at the start of the year, a broad-based rally followed. This was impressive, particularly in view of firmer oil prices, rising interest rates and the emergence of inflationary pressures. Indeed, underlying growth has hardly slowed at all: exports have stayed strong, thanks to Chinese demand. Rising domestic confidence has also led to firmer asset prices. Most important, the quality of earnings has been maintained, even as returns have shaded lower - much as our Managers had predicted. Among the major markets, South Korea stood out with a rise of 30%. An accommodative monetary policy stance provided the catalyst for shares to rise, plus domestic buying picked up through regular savings plans and pension reforms (factors which are peculiar to this market). Against this, corporate governance reforms have appeared to stall, while economic fundamentals remained a little dull. The Hong Kong benchmark Hang Seng Index reached a four-year high as the property recovery accelerated. Australia improved 16% on the back of the resources boom. In South Asia, the Indian market (+31%) benefited from a solid foundation for growth, the low base effect, and the current administration's pro-business stance (even if its coalition partners have lately curbed hoped-for reform, including privatisation). That aside, companies are high quality and have been generating returns, often ahead of expectations. The level of foreign buying has been unprecedented with the market being significantly re-rated. On the downside Taiwan underperformed on lingering concerns over earnings in the technology sector; and, Indonesia due to higher inflation caused by an end to fuel subsidies'. Outwardly the most significant event was China's move to abolish its decade-old fixed currency peg with the US dollar. The revaluation is a move in the right direction as it underscores the country's commitment towards a market-driven economy and allows for greater flexibility in managing monetary policy. China's move was quickly followed by Malaysia, which also replaced its fixed currency peg with a managed float. Share Issues During the period under review, demand for the Company's shares was encouragingly strong. This allowed the Company to issue 1.28 million new Ordinary shares during this period, with a further 425,000 new Ordinary shares having been issued during November 2005. All new shares were issued at a premium to the prevailing NAV. The Company used up the authority to allot new Ordinary shares granted at the Annual General Meeting in August and, as a result, I issued a circular to shareholders on 17 November 2005 seeking a new authority to allot up to 10% of the shares in issue for cash and to disapply pre-emption rights in respect of those shares. Shareholders approved this at the Extraordinary General Meeting held on 14 December 2005 and the Directors will continue to consider issuing new shares when the Company is able to and when to do so would enhance the NAV for existing shareholders. Gearing The Directors continue to keep the gearing policy under review and have given the Manager flexibility to gear up to 10% of the Company's assets, although at the time of writing the level of drawings has not changed from the period end position, being around 7.5%. Outlook Given the strong performance in share prices over the past year, valuations are looking a little less compelling. Earnings have grown in line with expectations, by around 10%. A fundamental re-rating of markets now really depends on companies being able to improve those returns. Some wariness is merited as increased costs, not just of raw materials but also of labour, may pressure margins and contain profitability over the next 12 months. Foreign interest in Asia remains very keen, so the liquidity-driven rally may continue. There is no shortage of new issues to absorb this liquidity but the majority of these have not fitted our investment criteria. However economic trends are broadly supportive, although much will depend on energy-led inflation, at what level US interest rates peak and their effect on global growth. Currently the Company's investments trade on a price/earnings multiple of 15.3 times for calendar year 2005 and 14.1 times for 2006, according to our Manager's estimates, with a low debt/equity ratio of 9% and a dividend yield of 3.5%. There is a defensive nature to the portfolio and I continue to remain confident about the region's prospects, and in particular our own portfolio. Richard Clough Chairman 22 December 2005 Statement of Total Return (unaudited) Six months ended Six months ended 31 October 2005 31 October 2004 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on held at fair value investments - 17,573 17,573 - 601 601 Income 1,857 - 1,857 1,688 - 1,688 Investment management fee (197) (197) (394) (145) (145) (290) Administrative expenses (242) - (242) (226) - (226) Exchange gains/(losses) 26 (475) (449) (17) 159 142 _______ _______ _______ _______ _______ _______ Net return before finance costs and taxation 1,444 16,901 18,345 1,300 615 1,915 Interest payable and similar charges (80) (80) (160) (54) (54) (108) _______ _______ _______ _______ _______ _______ Net return on ordinary activities before taxation 1,364 16,821 18,185 1,246 561 1,807 Taxation on ordinary activities (414) 83 (331) (416) 60 (356) _______ _______ _______ _______ _______ _______ Net return on ordinary activities after taxation 950 16,904 17,854 830 621 1,451 _______ _______ _______ _______ _______ _______ Return per Ordinary share (pence): 74.98 6.24 _______ _______ The total column of this statement represents the profit and loss account of the Company. All revenue and capital items are derived from continuing operations. Balance Sheet As at As at As at 31 October 2005 31 October 2004 30 April 2005 (unaudited) (unaudited) (audited) (restated) (restated) £'000 £'000 £'000 Fixed assets Investments designated as held at fair value 106,432 78,413 83,810 ______________ ______________ ______________ Current assets Debtors 227 404 539 Cash at bank and in hand 1,471 680 871 ______________ ______________ ______________ 1,698 1,084 1,410 ______________ ______________ ______________ Creditors: amounts falling due within one year Bank loans (7,535) (7,310) (7,054) Other creditors (1,150) (932) (676) ______________ ______________ ______________ (8,685) (8,242) (7,730) ______________ ______________ ______________ Net current liabilities (6,987) (7,158) (6,320) ______________ ______________ ______________ Total assets less current liabilities 99,445 71,255 77,490 Provision for liabilities and charges (43) (29) (149) ______________ ______________ ______________ Net assets 99,402 71,226 77,341 ______________ ______________ ______________ Share capital and reserves Called-up share capital 6,172 5,817 5,852 Share premium account 14,834 9,317 9,777 Special reserve 14,138 14,138 14,138 Capital redemption reserve 10,207 10,207 10,207 Capital reserve - realised 6,606 6,094 7,025 Capital reserve - unrealised 43,364 22,115 26,041 Revenue reserve 4,081 3,538 4,301 ______________ ______________ ______________ Equity Shareholders' funds 99,402 71,226 77,341 ______________ ______________ ______________ Net asset value per Ordinary share (pence): 402.65 306.12 330.42 ______________ ______________ ______________ Statement of Changes in Equity (unaudited) Share Capital Capital Capital Share premium Special redemption reserve reserve Revenue capital account reserve reserve - realised - unrealised reserve Total Six months ended 31 October 2005 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 30 April 2005 (restated) 5,852 9,777 14,138 10,207 7,025 26,041 4,301 77,341 Net profit on ordinary activities - - - - (274) 17,178 950 17,854 after taxation Dividend paid (Final 2005 - 4.0p; - - - - - - (1,170) (1,170) Special - 1.0p) Issue of Ordinary shares 320 5,057 - - - - - 5,377 Transfer on disposal of investments - - - - (145) 145 - - Balance at 31 October 2005 6,172 14,834 14,138 10,207 6,606 43,364 4,081 99,402 Share Capital Capital Capital Share premium Special redemption reserve reserve Revenue capital account reserve reserve - realised - unrealised reserve Total Six months ended 31 October 2004 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 30 April 2004 (restated) 5,817 9,317 14,138 10,207 6,119 21,469 3,592 70,659 Net profit on ordinary activities - - - - 34 587 830 1,451 after taxation Dividend paid (Final 2004 - 3.8p) - - - - - - (884) (884) Transfer on disposal of investments - - - - (59) 59 - - Balance at 31 October 2004 5,817 9,317 14,138 10,207 6,094 22,115 3,538 71,226 Cash Flow Statement (unaudited) Six months ended Six months ended 31 October 2005 31 October 2004 £'000 £'000 Net cash inflow from operating activities 1,500 1,051 Net cash outflow from servicing of finance (161) (102) Net tax paid - (30) Net cash outflow from financial investment (4,953) (492) Equity dividends paid (1,170) (884) ______________ ______________ Net cash outflow before financing (4,784) (457) Net cash inflow from financing 5,378 32 ______________ ______________ Increase/(decrease) in cash 594 (425) ______________ ______________ Reconciliation of net return before finance costs and taxation to net cash inflow from operation activities Net return before finance costs and taxation 1,444 1,300 Decrease in accrued income 326 608 (Increase)/decrease in other debtors (4) 21 Increase/(decrease) in other creditors 48 (44) Capitalised expenses taken to non-distributable reserves (197) (145) Dividend treated as capital repayment - (391) Scrip dividends included in investment income (15) (132) Overseas withholding tax suffered (102) (166) ______________ ______________ 1,500 1,051 ______________ ______________ Reconciliation of net cash flow to movements in net debt Increase/(decrease) in cash as above 594 (425) Cash inflow from increase in loans - (32) ______________ ______________ Change in net debt resulting from cash flows 594 (457) Exchange movements (475) 159 ______________ ______________ Movements in net debt in the period 119 (298) Opening net debt (6,183) (6,332) ______________ ______________ Closing net debt (6,064) (6,630) ______________ ______________ Represented by: Cash at bank and in hand 1,471 680 Debt falling due within one year (7,535) (7,310) ______________ ______________ (6,064) (6,630) ______________ ______________ Notes to the Accounts 1. Accounting policies The accounts have been prepared under the historical cost convention, as modified to include the revaluation of investments and in accordance with applicable Accounting Standards and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies'. They have also been prepared on the assumption that the approval as an investment trust will continue to be granted. For the accounting period beginning on 1 May 2005 the Company had the option to prepare its financial statements in accordance with International Financial Reporting Standards ('IFRS'), as adopted by the International Accounting Standards Board ('IASB'). The Board has elected to continue to adopt UK Generally Accepted Accounting Principles ('UK GAAP') and therefore complies with the new Financial Reporting Standards issued as part of the programme to converge UK GAAP with IFRS. Figures for the six months ended 31 October 2004 and year ended 30 April 2005 have been restated accordingly. The same accounting policies used for the year ended 30 April 2005 have been applied with the following exceptions: (a) Investments are measured initially at cost and are recognised at trade date. Subsequent to initial recognition investments are valued at fair value. For listed investments this is deemed to be bid market prices. Movements in fair value are recognised in the statement of total return. (b) Interim, special and final dividends are recognised in the period in which they are paid. The impact of these changes are shown in the following notes. As at As at As at 30 April 31 October 30 April 2004 2004 2005 2. Reconciliation of Balance Sheets £'000 £'000 £'000 Net assets as previously reported 76,425 71,511 70,097 Restatement of investments at bid value (254) (285) (322) Reversal of provision for final and special dividends 1,170 - 884 Restated net assets 77,341 71,226 70,659 Six months ended 31 October 2004 3. Reconciliation of the Statement of Total Return £'000 Total transfer to reserves per original reported Statement of Total Return 1,414 Change from mid to bid basis 30 April 2004 322 Change from mid to bid basis 31 October 2004 (285) 1,451 Ordinary dividends on equity shares deducted from reserves are analysed below: Six months ended Six months ended 31 October 2005 31 October 2004 (restated) £'000 £'000 2004 final dividend - 3.8p - 884 2005 final dividend - 4.0p 936 - 2005 special dividend - 1.0p 234 - 1,170 884 Six months ended Six months ended 31 October 2005 31 October 2004 (restated) 4. Return per share p p Revenue return 3.99 3.57 Capital return 70.99 2.67 Total return 74.98 6.24 The figures above are based on the following attributable assets: Six months ended Six months ended 31 October 2005 31 October 2004 (restated) £'000 £'000 Revenue return 950 830 Capital return 16,904 621 Total return 17,854 1,451 Weighted average number of Ordinary shares 23,812,676 23,267,133 Six months ended Six months ended Year ended 31 October 2005 31 October 2004 30 April 2005 5. Net asset value (restated) (restated) Attributable net assets (£'000) 99,402 71,226 77,341 Number of Ordinary shares in issue 24,687,133 23,267,133 23,407,133 Net asset value per Ordinary share (p) 402.65 306.12 330.42 Six months ended Six months ended Year ended 31 October 2005 31 October 2004 30 April 2005 6. Transaction costs £'000 £'000 £'000 The following transaction costs were incurred during the period: Purchases 23 15 28 Sales 13 17 32 36 32 60 7. In accordance with stated policy no interim dividend has been declared for the period (2004 - nil). 8. The financial information for the year ended 30 April 2005 has been extracted from the unrevised Annual Report and Accounts of the Company which have been filed with the Registrar of Companies and restated where required as a result of the implementation of the new Financial Reporting Standards. The auditors' report on those accounts was unqualified. The statement of total return and balance sheet do not represent full accounts in accordance with Section 240 of the Companies Act 1985. Aberdeen Asset Management PLC Secretaries 22 December 2005 Independent Review Report to Aberdeen New Dawn Investment Trust PLC Introduction We have been engaged by the Company to review the financial information set out above and we have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Listing Rules of the Financial Services Authority. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/ 4: 'Review of Interim Financial Information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2005. KPMG Audit Plc Chartered Accountants Edinburgh 22 December 2005 This information is provided by RNS The company news service from the London Stock Exchange

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