Interim Results
Acorn Income Fund Ld
13 September 2005
ACORN INCOME FUND LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2005
CHAIRMAN'S STATEMENT
I am pleased to present the Preliminary Announcement of Results of the Company for the half-year ending 30 June 2005.
The financial position of the Company has continued to strengthen during the first half of 2005, with the net asset
value ('NAV') per Ordinary Share based on investments valued at mid market prices (as published monthly through the
London and Channel Islands Stock Exchanges, which differs from the bid price basis required for valuing investments in
these results - see Note 13) rising by 9.53p to 150.04p on 30 June, after distributing dividends totalling 4.00p per
share. The Company generated a total return for the period of 9.63%, outperforming the Extended Hoare Govett Smaller
Companies Index (excluding investment trusts), which achieved a total return over the same period of 8.35%. The
Company's NAV per Ordinary Share has continued to outperform its benchmark index since launch in 1999, achieving a
total return of 124.52% compared to a total return of 80.45% for the Extended Hoare Govett Smaller Companies Index
(excluding investment trusts).
The market price of the Company's Ordinary Shares rose from 130.00p at 31 December 2004 to 139.75p at 30 June 2005 - a
discount to NAV of 6.86%. The discount narrowed slightly from the December position and compares favourably with
16.20% at the same point last year, indicating that the market share price is returning to the close tracking of the
NAV it experienced from the Company's launch through to 31 December 2002.
The Board believes that the decision to revise the investment policy and invest the High Income portfolio solely in
Sterling denominated investment grade fixed interest bonds, which is not yet completed, has improved your Company's
ability to meet its overall investment objectives. During the first half of 2005, the High Income portfolio has
achieved satisfactory income generation and reduced capital losses in rising bond markets, and the Smaller Companies
portfolio has continued to deliver both income and notably, capital growth.
Our Investment Advisers do, however, remain cautious over the uncertain situation facing the fixed income markets but
are more positive that the Smaller Companies portfolio will continue to perform strongly.
Martin Bralsford
Chairman
13 September 2005
INVESTMENT ADVISER'S REPORT - SMALLER COMPANIES PORTFOLIO
The Smaller Companies portfolio has benefited from its bias towards the industrial and business services sectors of the
economy and its negligible exposure to the debt driven consumer sectors of the economy. There are signs that
Sterling's recent bout of strength versus the Dollar is being reversed and this will further enhance the profitability
of many of our overseas earners in the months ahead.
During the past six months, a number of individual portfolio stocks have performed extremely well: BSS Group, the
tubes, valves and fittings distributor; Rotork, the actuator manufacturer; James Halstead, a manufacturer and
distributor of flooring; and Renishaw, a manufacturer of metrology equipment, were the leading contributors to
performance.
Corporate action continued with the takeover of Wellington Holdings by Fenner Group. We believe corporate that
activity will increase with improvements in business confidence during the remainder of the year.
Additions to the portfolio during the period under review included PD Ports, the port and port services operator, and
DX Services, the leading independent provider of early morning next day mail services. We expect DX to be a major
beneficiary of deregulation within the UK delivery market. De La Rue, the security printing company, was also added to
the portfolio and we increased our holding in Weir Group, the international engineering company. New management at
Weir have focused on the disposal of non-core operations and adopted an aggressive share buy-back initiative as the
first steps to enhance Shareholder value.
During the period under review, we disposed of our shareholdings in National Express and F&C Asset Management, and
top-sliced shareholdings in Alpha Airports, Pendragon and Eliza Tinsley to finance new investments.
Sometimes it is difficult for us to invest in certain sectors and companies because of our high yield objectives. The
oil & gas sector is an example of a strong performing sector that we have been unable to gain exposure to as a result
of our demanding income targets.
We believe that business confidence is improving amongst our investee companies and that the immediate prospects for
the Smaller Companies portfolio are most encouraging.
Peter Webb
Unicorn Asset Management Limited
13 September 2005
INVESTMENT ADVISER'S REPORT - HIGH INCOME PORTFOLIO
During the review period, Sterling fixed income markets made modest progress, rising by 4.40%. However, the majority
of this was generated via accrued income, whereas capital movement was insignificant.
Worries over the advancing oil price continued whilst both the Treasury and the Bank of England voiced concerns at the
rise in average earnings which have climbed above 4.00% - this is twice the Government's ceiling inflation target of
just 2.00%. On the other hand, fading momentum in the housing market and a drop in both retail sales and manufacturing
were sufficient to convince the Monetary Policy Committee that a 0.25% cut in interest rates was warranted. This has
been sufficient to keep the Sterling bond markets steady for the time being.
A further source of concern for the markets is the gulf between the Treasury's forecast for growth; 3.00% plus, and the
actual out-turn which is currently running well below 2.00%. This poses a threat to Gordon Brown's self imposed golden
rule, which is now in danger of being broken. In order to make up the shortfall in revenue, the Chancellor of the
Exchequer could elect to borrow more in the short-term, which means he will need to issue more gilt-edged securities
until the economy picks up. On the other hand he may choose to raise taxation, or, perhaps trim back his spending
plans, although reducing spending is likely to be his least favoured option.
Meanwhile, we envisage that the fixed income markets are likely to remain in a reasonably tight trading range until
this situation clarifies.
Jim Goodey
Collins Stewart Asset Management Limited
13 September 2005
STATEMENT OF TOTAL RETURN (unaudited)
for the six months ended 30 June 2005
Six months Year ended
ended 30 June 31 December
Six months ended 30 June 2005 2004 2004
(unaudited) (restated) (restated)
Note Revenue Capital Total Total Total
£'000 £'000 £'000 £'000 £'000
Gains and losses on investments
Realised gain/(loss) on investments at fair
value through profit and loss 3, 9 - 2,842 2,842 (5,575) (5,431)
Movement in unrealised gain on investments at
fair value through profit and loss 3, 9 - 579 579 9,043 12,214
-------- -------- -------- -------- --------
Net Investment gain - 3,421 3,421 3,468 6,783
Income 4 1,779 - 1,779 1,542 2,945
Management fee 5 (86) (256) (342) (320) (649)
Other expenses 6 (80) (43) (123) (218) (361)
-------- -------- -------- -------- --------
Net return on ordinary activities before 1,613 3,122 4,735 4,472 8,718
finance costs
Interest payable and similar charges 10 (187) (561) (748) (783) (1,575)
-------- -------- -------- -------- --------
Net return on ordinary activities for the 1,426 2,561 3,987 3,689 7,143
period
Dividends in respect of equity shares 7 (1,184) - (1,184) (1,184) (2,664)
-------- -------- -------- -------- --------
Transfer to reserves 12 242 2,561 2,803 2,505 4,479
-------- -------- -------- -------- --------
Return per Ordinary Share 8 4.82p 8.65p 13.47p 12.46p 24.14p
Dividend per Ordinary Share (distributed) 7 4.00p - 4.00p 4.00p 9.00p
BALANCE SHEET (unaudited)
as at 30 June 2005
31 December
30 June 2005 30 June 2004 2004
Note (unaudited) (restated) (restated)
£'000 £'000 £'000
Fixed assets
Listed investments 9 62,795 61,643 61,617
Current assets
Debtors 385 629 1,271
Cash at bank 6,640 3,074 4,242
-------- -------- --------
7,025 3,703 5,513
Creditors - amounts falling due within one year
Creditors (409) (713) (522)
-------- -------- --------
Net current assets 6,616 2,990 4,991
-------- -------- --------
Total assets less current liabilities 69,411 64,633 66,608
Creditors - amounts falling due after more than one year
Long term bank loan 10 (25,616) (25,616) (25,616)
-------- -------- --------
Net asset value 43,795 39,017 40,992
-------- -------- --------
Share capital and reserves
Called-up share capital 11 7,400 7,400 7,400
Share premium 12 17,079 17,079 17,079
Special reserve 12 10,000 10,000 10,000
Revenue reserve 12 1,127 1,321 885
Capital reserve 12 8,189 3,217 5,628
-------- -------- --------
Total shareholders' funds attributable to equity interests 43,795 39,017 40,992
-------- -------- --------
Net asset value per Ordinary Share 13 147.96p 131.81p 138.49p
CASH FLOW STATEMENT (unaudited)
for the six months ended 30 June 2005
Six months Six months Year ended
ended 30 ended 30 31 December
June 2005 June 2004 2004
Note (unaudited) (restated) (restated)
£'000 £'000 £'000
Net cash inflow from operating activities 14 1,651 1,319 2,132
Servicing of finance
Interest paid (908) (780) (1,431)
-------- -------- --------
Net cash outflow from servicing of finance (908) (780) (1,431)
Investing activities
Transaction charges on the purchase and sale of investments at
fair value through profit and loss
3 (43) (136) (200)
Purchase of investments at fair value through profit and loss (8,129) (12,112) (17,318)
Sale of investments at fair value through profit and loss 11,011 12,371 20,127
-------- -------- --------
Net cash inflow from investing activities 2,839 123 2,609
Equity dividends paid 7 (1,184) (1,184) (2,664)
-------- -------- --------
Cash inflow/(outflow) before financing 2,398 (522) 646
Net cash flow from financing - - -
-------- -------- --------
Increase/(decrease) in cash in the period / year 2,398 (522) 646
-------- -------- --------
NOTES TO THE PRELIMINARY ANNOUNCEMENT OF RESULTS
for the six months ended 30 June 2005 (unaudited)
1. Accounting policies
The accounting policies, all of which have been applied consistently throughout the period, in the preparation
of the Company's unaudited interim results, are set out below:
a) Accounting convention
The unaudited interim results have been prepared under the historical cost convention, as modified by the
revaluation of investments, and in accordance with applicable United Kingdom accounting standards and with the
revised Statement of Recommended Practice ('SORP'), for Financial Statements of Investment Trust Companies ('
ITC'), issued in January 2003.
b) Income
Dividends receivable on equity shares are taken into account on the ex-dividend date. Income on debt and fixed
interest securities is recognised on an accruals basis. Dividends received from United Kingdom registered
companies are accounted for net of implied tax credits. Bank interest is accounted for on an accruals basis.
c) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account except as
follows:
(i) 75% of the Company's management fee and financing costs are charged to the capital reserve in line with
the Board's expected long-term split of returns between income and capital gains from the investment
portfolio; and
(ii) 100% of any performance fee is charged to the capital account.
d) Capital reserve
The following are accounted for in the capital reserve:
(i) realised gains and losses on the realisation of investments;
(ii) unrealised gains and losses on investments; and
(iii) expenses charged to the capital reserve in accordance with the above accounting policies.
e) Transaction costs
Previously, transaction costs incurred on the acquisition of an investment were included within the cost of
that investment and transaction costs incurred on the disposal of an investment were deducted from the proceeds
on sale. However, in accordance with FRS 26 Financial Instruments: Measurement ('FRS 26'), transaction costs
are now charged through the Statement of Total Return to the capital reserve in the period in which they are
incurred.
f) Investments
Classification
In accordance with FRS 26, all investments are now classified as 'fair value through profit and loss'.
Recognition
The Company recognises financial assets held as fair value through profit and loss assets on the date it
commits to purchase the instruments. From this date, any gains and losses arising from the changes in fair
value of the assets are recognised.
Measurement
Fair value through profit and loss assets are initially recognised at cost, being the fair value of the
consideration given, excluding transaction costs associated with the investment (see note 1(e)). Subsequent to
initial recognition, all fair value through profit and loss assets are measured at fair value with changes in
value being recognised in the Statement of Total Return and taken to the capital reserve. For investments
actively traded in organised financial markets, fair value is determined by reference to Stock Exchange quoted
market bid prices as at the close of business on the Balance Sheet date. This differs from prior periods where
investments were measured at quoted market mid prices. The impact of this is disclosed in Note 3.
Derecognition
A fair value through profit and loss asset is derecognised when the Company loses control over the contractual
rights that comprise that asset. This occurs when rights are realised, expire or are surrendered. Realised
gains and losses on fair value through profit and loss assets sold are calculated as the difference between the
sales proceeds (excluding transaction costs (see note 1(e))) and costs. Fair value through profit and loss
assets that are sold are derecognised and corresponding receivables from the buyer for the payment are
recognised as of the date the Company commits to sell the assets. The Company uses the weighted average method
to determine realised gains and losses on derecognition.
g) Impact of revisions to United Kingdom accounting standards
In compliance with FRS 25 Financial Instruments: Disclosure and Presentation ('FRS 25') and FRS 26, the Company
has designated and reclassified all investments to 'fair value through profit and loss'. Fair value through
profit and loss assets are now measured at Stock Exchange quoted market bid prices whereas they were previously
valued at quoted market mid prices.
In addition, the transaction costs incurred on the purchase and sale of investments are now charged through the
Statement of Total Return in the period in which they are incurred instead of being included within the cost of
the investment or deducted from the proceeds of a sale. The impact of this is disclosed in Note 3.
2. Taxation
The Company has been granted exemption from Guernsey taxation under the Income Tax (Exempt Bodies) (Guernsey) Ordinance
1989 and is charged an annual exemption fee of £600 (2004: £600).
3. Change of accounting policy
As explained in Note 1(g), charges incurred on the purchase and sale of fair value through profit and loss
investments are now charged through the Statement of Total Return in the period in which they are incurred
instead of being included within the cost of the investment or deducted from the proceeds of a sale. This had
no impact on the net asset value of the Company or reserves but impacted the unrealised and realised gain or
loss on investments as below. However, the effect of valuing investments at quoted market bid prices not only
impacts upon the unrealised gain or loss on investments, but also on the net asset value (please see Note 13).
Realised gains Movements in Transaction
on fair value unrealised charges on the
through profit gains/(losses) purchase and sale
and loss on fair value of fair value
investments through profit through profit
and loss and loss
investments investments
£'000 £'000 £'000
Gain for the period ended 30 June 2005 under the previous
accounting policy 2,782 451 -
Transaction charges 60 (17) (43)
Valuation of investments at bid prices - 145 -
-------- -------- --------
Gain/(expense) for the period ended 30 June 2005 under the
current accounting policy 2,842 579 (43)
-------- -------- --------
Realised Movements in Transaction
losses on fair unrealised charges on the
value through gains/(losses) purchase and sale
profit and on fair value of fair value
loss through profit through profit
investments and loss and loss
investments investments
£'000 £'000 £'000
(Loss)/gain for the period ended 30 June 2004 (as previously
stated) (5,754) 8,898 -
Transaction charges 179 (43) (136)
Valuation of investments at bid prices - 188 -
-------- -------- --------
(Loss)/gain/(expense) for the period ended 30 June 2004 (as
restated) (5,575) 9,043 (136)
-------- -------- --------
Realised Movements in Transaction
losses on fair unrealised charges on the
value through gains/(losses) purchase and sale
profit and on fair value of fair value
loss through profit through profit
investments and loss and loss
investments investments
£'000 £'000 £'000
(Loss)/gain for the year ended 31 December 2004 (as
previously stated) (5,699) 12,063 -
Transaction charges 268 (68) (200)
Valuation of investments at bid prices - 219 -
-------- -------- --------
(Loss)/gain/(expense) for the year ended 31 December 2004 (as
restated) (5,431) 12,214 (200)
-------- -------- --------
The transaction costs associated with the purchase and sale of investments have been shown separately in the
Cash Flow Statement. Consequently, the purchase of fair value through profit and loss investments decreased
by £35,617 for the period to 30 June 2005 (30 June 2004; £98,730, 31 December 2004: £137,624) and the proceeds
on sale of fair value through profit and loss investments increased by £7,583 (30 June 2004; £37,550, 31
December 2004: £62,017).
4. Income
Six months Six months Year ended 31
ended 30 ended 30 December 2004
June 2005 June 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Dividend income 1,342 1,141 2,093
Bond interest 311 321 666
Bank interest 126 80 186
-------- -------- --------
1,779 1,542 2,945
-------- -------- --------
5. Management fee
The Manager of the Company is entitled under the Management Agreement with the Company to receive a management fee from
the Company at the annual rate of 1.0% of the total assets of the Company, valuing investments using mid market prices,
payable quarterly in arrears. Where any investments comprised in the assets of the Company are in funds managed by or
advised by the Manager or Investment Adviser or an affiliate of either of them, the mid market value of such investments
is deducted from total assets for the purposes of calculating the management fee.
In addition, the Manager is entitled to receive a performance fee, payable at the end of each financial period of the
Company, at the rate of 15% of any excess of the net asset value per share (valuing investments using mid market prices)
over the benchmark net asset value per share as at the last calculation day in the relevant financial period, multiplied
by the time weighted number of shares in issue within such period. The benchmark net asset value per share is the
higher of 104.80p, compounded at 10% per annum since 31 December 1999, and the highest net asset value per share as of
the last calculation day in any preceding financial period. When calculating the performance fee, the net asset value
per share is reduced by the amount that the dividend per share paid during that financial year is less than 8.50p. As
at 30 June 2005 the benchmark net asset value per share was 177.15p (30 June 2004: 161.05p, 31 December 2004: 168.78p).
No performance fee has been paid or accrued in respect of the period ended 30 June 2005 (30 June 2004: nil, 31 December
2004: nil).
The Manager has delegated the obligations for the performance of the investment management services to Unicorn Asset
Management Limited ('the Smaller Companies Investment Adviser') and Collins Stewart Asset Management Limited ('the High
Income Investment Adviser'). The agreements are between the Investment Advisers and the Manager, not the Company. All
Investment Advisory fees are paid out of the management fees and performance fees received by the Manager from the
Company.
Both Investment Advisers are entitled to receive from the Manager an annual fee at the rate of 0.5% of the total assets
attributable to the investments based on mid market prices in relation to which the Investment Adviser acts. The
Smaller Companies Investment Adviser is entitled to 5/8ths of the Manager's performance fee, while the Manager may, at
its discretion, pay the High Income Investment Adviser a proportion of the remaining performance fee. In addition, the
Smaller Companies Investment Adviser is entitled to receive, from the Manager, a fixed annual fee of £7,500 in relation
to marketing services provided to investors.
The Investment Advisory Agreements may be terminated by the Manager or the Investment Advisers, giving not less than 12
months' notice in writing, or otherwise in circumstances where one of the parties has a receiver appointed over its
assets or if an order is made or an effective resolution passed for the winding up of one of the parties. On
termination, the Investment Adviser shall be entitled to receive all fees accrued up to the date of the termination (or
thereafter if the Investment Adviser necessarily incurs expenses arising out of the termination of the agreement) but
shall not be entitled to compensation, except in the case of a wrongful termination by the Manager.
6. Other expenses
Six months Year ended 31
ended 30 June December 2004
2004 (restated)
Six months ended 30 June 2005 (restated)
(unaudited)
Revenue Capital Total
£'000 £'000 £'000 £'000 £'000
Custody and settlement fees 18 - 18 19 38
Auditors' remuneration 5 - 5 4 9
Directors' remuneration 20 - 20 19 40
Transaction charges - 43 43 136 200
Other expenses 37 - 37 40 74
-------- -------- -------- -------- --------
80 43 123 218 361
-------- -------- -------- -------- --------
7. Dividends in respect of equity shares
Six months Six months Year ended 31
ended 30 ended 30 December 2004
June 2005 June 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Dividends on Ordinary Shares:
First interim paid of 2.00p (2004: 2.00p) 592 592 592
Second interim paid of 2.00p (2004: 2.00p) 592 592 592
Third interim paid, n/a (2004: 2.00p) - - 592
Special dividend paid, n/a (2004: 1.00p) - - 296
Fourth interim paid, n/a (2004: 2.00p) - - 592
-------- -------- --------
1,184 1,184 2,664
-------- -------- --------
8. Return per Ordinary Share
The revenue return per Ordinary Share is based on net revenue of £1,425,805 (30 June 2004: £1,184,444, 31 December 2004:
£2,227,687) and on a weighted average number of 29,600,002 (30 June 2004 and 31 December 2004: 29,600,002) Ordinary
Shares in issue throughout the period. The capital gain per Ordinary Share is based on the net capital gain of
£2,561,160 (30 June 2004: £2,504,953 as restated, 31 December 2004: £4,917,396 as restated) and on a weighted average
number of 29,600,002 (30 June 2004 and 31 December 2004: 29,600,002) Ordinary Shares in issue throughout the period.
9. Fair value through profit and loss investments
Six months Year ended 31
ended 30 June December 2004
2004
Six months ended 30 June 2005 (restated) (restated)
(unaudited)
Smaller High
Companies Income
Portfolio Portfolio Total Total Total
£'000 £'000 £'000 £'000 £'000
Opening valuation 52,626 8,991 61,617 57,976 57,976
Purchases at cost 3,936 4,553 8,489 12,456 17,319
Sales - proceeds (6,660) (4,072) (10,732) (12,257) (20,461)
- realised gains/(losses) 2,938 (96) 2,842 (5,575) (5,431)
Movement in unrealised appreciation 363 216 579 9,043 12,214
-------- -------- -------- -------- --------
Closing valuation 53,203 9,592 62,795 61,643 61,617
-------- -------- -------- -------- --------
Closing book cost 34,059 10,571 44,630 47,229 44,030
Closing unrealised appreciation/ 19,144 (979) 18,165 14,414 17,587
(depreciation)
-------- -------- -------- -------- --------
Closing valuation 53,203 9,592 62,795 61,643 61,617
-------- -------- -------- -------- --------
Realised gains/(losses) attributable to 855 (14) 841 (128) 28
current year
Amounts previously recognised as unrealised
appreciation/(depreciation) on these sales
2,083 (82) 2,001 (5,447) (5,459)
-------- -------- -------- -------- --------
Gains/(losses) realised on investments sold 2,938 (96) 2,842 (5,575) (5,431)
-------- -------- -------- -------- --------
Following the suspension of trading by the Financial Services Authority ('FSA') in Eurodis Electron on 14
July 2005 and the subsequent appointment of an administrator by reason of its financial position, the value
of the holding of Eurodis Electron has been written down to zero and the value of the investments reduced
accordingly.
10. Long term bank loan
30 June 2005 30 June 2004 31 December
2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Bank of Scotland International facility 25,616 25,616 25,616
-------- -------- --------
Under loan agreements dated 28 September 1999 and 21 December 2000 between the Company and Bank of Scotland
International, a term loan of £25,616,000 has been made available. The interest rates payable on the loan
are based on LIBOR plus a margin of 1% plus Mandatory Liquid Asset ('MLA') costs.
11. Share capital
30 June 2005 30 June 2004 31 December
2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Authorised:
40,000,000 Ordinary Shares of 25p 10,000 10,000 10,000
-------- -------- --------
Allotted, called up and fully paid:
29,600,002 Ordinary Shares of 25p 7,400 7,400 7,400
-------- -------- --------
12. Reserves
Share premium
account Special Revenue Capital
reserve reserve reserve Total
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
£'000 £'000 £'000 £'000 £'000
At 1 January 2005 (as restated) 17,079 10,000 885 5,628 33,592
Return for the period - - 242 2,561 2,803
-------- -------- -------- -------- --------
At 30 June 2005 17,079 10,000 1,127 8,189 36,395
-------- -------- -------- -------- --------
The special reserve was created when the Company cancelled part of its share premium account, transferring
it to a distributable reserve to allow the buy-back and cancellation of up to 14.99% of the Ordinary
Shares.
13. Net asset value per Ordinary Share
The net asset value per Ordinary Share is based on the net assets attributable to equity Shareholders of
£43,795,000 (30 June 2004: £39,017,000 as restated, 31 December 2004: £40,992,000 as restated) and on
29,600,002 (30 June 2004 and 31 December 2004: 29,600,002) Ordinary Shares in issue at the end of the period.
These interim results have been prepared in accordance with the provisions of Financial Reporting Standard No.
26 ('FRS 26'), 'Financial Instruments: Recognition and Measurement'. The effect of this is to bring into the
Balance Sheet the concept of 'fair value', with the Company's investment portfolio being valued at bid market
prices. This is in contrast to a United Kingdom domiciled investment trust that, under the principles set out
in the Statement of Recommended Practice ('SORP') for Financial Statements of Investment Trust Companies ('ITC
'), values the investment portfolio at mid market prices in its Balance Sheet. The monetary effects of FRS 26
have resulted in a reduction in the net asset value per Ordinary Share of 1.54p (30 June 2004: 2.14p, 31
December 2004: 2.02p).
Reconciliation of net asset value to published net asset value:
30 June 2005 30 June 2005 30 June 2004 30 June 2004 31 December 31 December
2004 2004
Total Per Share Total Per Share Total Per Share
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
£'000 pence £'000 pence £'000 pence
Published net asset value 44,413 150.04 39,649 133.95 41,591 140.51
Valuation of investments at
bid prices (1)
(455) (1.54) (632) (2.14) (599) (2.02)
Write off of investment (2) (163) (0.54) - - - -
-------- -------- -------- -------- -------- --------
Net asset value per FRS 26 43,795 147.96p 39,017 131.81p 40,992 138.49p
-------- -------- -------- -------- -------- --------
(1) In accordance with FRS 26, fair value through profit and loss investments have been value at Stock
Exchange quoted market bid prices at the close of business on the Balance Sheet date. However, in accordance
with the SORP for ITCs, the net asset value reported each month to the London Stock Exchange and The Channel
Islands Stock Exchange reflects these investments valued at Stock Exchange quoted market mid prices.
(2) Following the suspension of trading by the FSA in Eurodis Electron on 14 July 2005 and the subsequent
appointment of an administrator by reason of its financial position, the holding of Eurodis Electron has been
written down to zero from a value of £162,868 at 30 June 2005 on a quoted market mid price basis.
14. Reconciliation of net revenue before finance costs and taxation to net cash inflow from operating
activities
Six months Six months Year ended 31
ended 30 ended 30 December 2004
June 2005 June 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net revenue before finance costs and taxation 1,613 1,380 2,622
Management fees charged to the capital reserve (256) (240) (487)
Decrease/(increase) in accrued income 295 175 (17)
Decrease in other debtors 4 3 2
(Decrease)/increase in other creditors and accruals (5) 1 12
-------- -------- --------
Net cash inflow from operating activities 1,651 1,319 2,132
-------- -------- --------
If you have any queries please contact:
Andrew Duquemin
Collins Stewart Fund Management Limited
2nd Floor
No 1 Le Truchot
St Peter Port
Guernsey
GY1 4AE
Tel: (01481) 731 987
Fax: (01481) 720 018
www.ci.collins-stewart.com
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