Final Results

Artemis Alpha Trust PLC 01 August 2006 ARTEMIS ALPHA TRUST PLC Preliminary Results for the year ended 30th April 2006 Chairman's Statement Performance Artemis Alpha Trust had a strong recovery in the second half of the year, following a disappointing first half. The basic net asset value increased by 36.8% for the six months to 30th April 2006, and by 28.9% for the full year. The fully diluted net asset value rose by 26.1% for the year. The broader market, as represented by the FTSE All Share Index, rose by 28.3% over the year. The Company continues its overweight exposure to the oil and gas sector, a policy which has proved successful over the past two years. Another significant contribution to performance has come from the Company's investment in Artemis Investment Management. Further details are contained in the Investment Manager's Review and the Portfolio of Investments in the Annual Report and Accounts. Dividends The Board has declared a second interim dividend of 1.2p per ordinary share (2005:1.1p) bringing total dividends for the year ended 30th April 2006 to 2.2p per share (2005:2.1p), an increase of 4.8% over dividends paid in 2005. The second interim dividend will be paid on 31st August 2006 to those shareholders on the register of members at the close of business on 11th August 2006. Board Composition In April 2006, Tom Cross Brown was appointed to the Board as a non executive Director. Having previously been global chief executive officer of ABN AMRO Asset Management, he has vast experience of the investment world and will be a valuable addition to your Board. In accordance with the Company's Articles of Association, he will stand for election at the forthcoming Annual General Meeting. Mr Peel and Mr Sobczak retire by rotation, as required by the Company's Articles of Association, and will be proposed for re-election at the forthcoming Annual General Meeting. Accounting Standards The financial statements for the year ended 30th April 2006 have been prepared under International Financial Reporting Standards, which is now a requirement for all listed companies preparing consolidated accounts. As a result, a number of changes have been made to the financial statements, the most notable being the change from valuing quoted investments at their mid market price to their bid market prices and the recognition of dividends in the accounting period they are declared and approved for payment. A fuller explanation and reconciliation of the changes is set out in the notes to the financial statements. Company Secretary and Registered Office The Board now considers it appropriate for administrative purposes that the Company Secretary's role should be carried out by the Investment Manager and this change took effect from 27th June 2006. The Company's registered office has been moved to Artemis' office at Cassini House, 57 St James's Street, London SW1A 1LD. Investment Plan The Investment Plan enables investors to acquire shares in the Company in a cost effective manner, either through a lump sum investment or regular monthly investments. Further information and documentation can be obtained by contacting Artemis Investment Management Limited on 0800 092 2051 or from the following web address, www.artemisonline.co.uk/pdf/brochures/alphatrustinvestmentplan.pdf. Annual General Meeting Your Company's Annual General Meeting this year will be held at the offices of Artemis Investment Management Limited, 42 Melville Street, Edinburgh EH3 7HA on Thursday, 7th September 2006 at 12 noon. Full details of the business to be conducted at the meeting are set out in the Notice of Meeting which is contained in the Annual Report and Accounts. As always, your Board would welcome your attendance at the meeting as it provides an opportunity to ask questions of the Board and Investment Manager. Should you have any detailed or technical questions, it would be helpful if these could be raised in advance of the meeting with the Company Secretary. If you are unable to attend the meeting, your Board would encourage you to send in your proxy votes. Outlook After three years of strong stock market performance, it is not all together surprising that some form of correction has occurred. At the time of writing, world equity markets had fallen from their recent highs with growing concerns over the reappearance of inflationary pressures and a belief that global growth will begin to slow. However, there remains a significant amount of liquidity, and company balance sheets generally remain strong by historic standards and this may continue to provide a degree of support for equity markets. Your Board views the coming year with a degree of caution, but believes that the Company's broad investment policy will help identify investment opportunities to continue the growth in net assets. Simon Miller Chairman 1st August 2006 Consolidated Income Statement For the year ended 30th April 2006 Year ended 30th April 2006 Year ended 30th April 2005 Revenue Capital Total Revenue Capital Total Notes Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Investment income 1,272 - 1,272 759 - 759 Other income 575 - 575 456 - 456 ---------- ---------- ----------- ----------- ---------- ---------- Total revenue 1,847 - 1,847 1,215 - 1,215 ----------- ---------- ----------- ----------- ---------- ---------- Gains on investments - 19,003 19,003 - 19,411 19,411 (Losses)/gains on current (23) - (23) - 312 asset investments 312 Currency losses - (50) (50) - (13) (13) ---------- ---------- ----------- ---------- ----------- ---------- Total income 1,824 18,953 20,777 1,527 19,398 20,925 ---------- ---------- ----------- ---------- ----------- ---------- Expenses Investment management fees (58) (520) (578) (44) (389) (433) Other expenses (339) - (339) (301) (60) (361) ---------- --------- ----------- ----------- ----------- ---------- Profit before finance costs and 1,427 18,433 19,860 1,182 18,949 20,131 tax ---------- --------- ----------- ----------- ----------- ---------- Finance costs (64) (570) (634) (42) (374) (416) ---------- --------- ----------- ----------- ----------- ---------- Profit before tax 1,363 17,863 19,226 1,140 18,575 19,715 ---------- --------- ----------- ----------- ----------- ---------- Tax (154) 209 55 (82) 63 (19) ---------- --------- ----------- ----------- ----------- ---------- Profit for the year 1,209 18,072 19,281 1,058 18,638 19,696 ---------- ---------- ----------- ----------- ----------- ---------- Earnings per ordinary share (basic) 2 3.63p 54.21p 57.84p 3.42p 60.29p 63.71p ---------- ---------- ----------- ----------- ----------- ---------- Earnings per ordinary share (diluted) 2 3.37p 50.31p 53.68p 3.23p 56.90p 60.13p ----------- ---------- ----------- ----------- ----------- ---------- The total column of this statement represents the Income Statement of the Group, prepared in accordance with International Financial Reporting Standards ('IFRSs'). The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of Artemis Alpha Trust plc. There are no minority interests. Balance Sheets As at 30th April 2006 Group Company Group Company Notes 2006 2006 2005 2005 Non-current assets Investments 87,511 95,755 74,415 81,946 ----------- ----------- ------------ ------------ Current assets Investments held by subsidiary 768 - 654 - Other receivables 1,202 980 837 837 Cash and cash equivalents 7,994 7,866 2,907 - ----------- ----------- ----------- ----------- 9,964 8,846 4,398 837 ----------- ----------- ----------- ----------- Total assets 97,475 104,601 78,813 82,783 ----------- ----------- ----------- ----------- Current liabilities Other payables (2,158) (9,284) (2,378) (6,348) Bank Loan (11,500) (11,500) (11,500) (11,500) ------------ ------------ ----------- ----------- (13,658) (20,784) (13,878) (17,848) ------------ ----------- ----------- ----------- Net assets 83,817 83,817 64,935 64,935 ------------ ----------- ----------- ----------- Equity attributable to equity holders Share capital 334 334 333 333 Share premium 23,984 23,984 23,912 23,912 Special reserve 8,208 8,208 8,208 8,208 Warrant reserve 1,299 1,299 1,101 1,101 Capital redemption reserve 2 2 2 2 Retained earnings - revenue 1,540 525 1,001 376 Retained earnings - capital 48,450 49,465 30,378 31,003 ----------- ----------- ----------- ----------- Total equity 83,817 83,817 64,935 64,935 ----------- ----------- ----------- ----------- Net asset value per ordinary share (basic) 3 251.26p 194.88p ----------- ----------- Net asset value per ordinary share (diluted) 3 229.67p 182.09p ----------- ----------- Statements of Changes in Equity For the year ended 30th April 2006 Share Share Special Warrant Capital Retained Retained Total capital premium reserve reserve redemption earnings- earnings- account reserve Revenue Capital Group Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 For the year ended 30th April 2005 At 1st May 2004 306 18,431 8,208 367 2 380 11,740 39,434 Profit for the year - - - - - 1,058 18,698 19,756 Issue of manager - - - 734 - - - 734 warrants Issue of shares 27 5,493 - - - - - 5,520 Expenses of share - (12) - - - - (60) (72) issue Dividends paid - - - - - (437) - (437) and declared --------- ----------- ---------- ----------- ------------ ------------ ----------- ----------- At 30th April 2005 333 23,912 8,208 1,101 2 1,001 30,378 64,935 --------- ----------- ---------- ----------- ------------ ------------ ----------- ---------- For the year ended 30th April 2006 At 1st May 2005 333 23,912 8,208 1,101 2 1,001 30,378 64,935 Profit for the year - - - - - 1,209 18,072 19,281 Issue of manager - - - 198 - - - 198 warrants Issue of shares 1 72 - - - - - 73 Dividends paid - - - - - (670) - (670) and declared --------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- At 30th April 2006 334 23,984 8,208 1,299 2 1,540 48,450 83,817 --------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- Share Share Special Warrant Capital Retained Retained Total capital premium reserve reserve redemption earnings- earnings- account reserve Revenue Capital Company Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 For the year ended 30th April 2005 At 1st May 2004 306 18,431 8,208 367 2 157 11,963 39,434 Profit for the year - - - - - 656 19,100 19,756 Issue of manager - - - 734 - - - 734 warrants Issue of shares 27 5,493 - - - - - 5,520 Expenses of share issue - (12) - - - - (60) (72) Dividends paid - - - - - (437) - (437) and declared --------- ---------- ---------- ----------- ---------- ----------- ------------ --------- At 30th April 2005 333 23,912 8,208 1,101 2 376 31,003 64,935 --------- ---------- ---------- ----------- ---------- ----------- ------------ --------- For the year ended 30th April 2006 At 1st May 2005 333 23,912 8,208 1,101 2 376 31,003 64,935 Profit for the year - - - - - 819 18,462 19,281 Issue of manager - - - 198 - - - 198 warrants Issue of shares 1 72 - - - - - 73 Dividends paid - - - - - (670) - (670) and declared --------- ---------- ---------- ----------- ----------- ----------- ----------- --------- At 30th April 2006 334 23,984 8,208 1,299 2 525 49,465 83,817 --------- ---------- ---------- ----------- ----------- ----------- ----------- --------- Cash Flow Statements For the year ended 30th April 2006 Group Company Group Company 2006 2006 2005 2005 Â£'000 Â£'000 Â£'000 Â£'000 Operating activities Profit before tax 19,226 19,281 19,715 19,715 Interest payable 634 634 416 416 Gains on investments held at fair value through profit or (19,003) (19,539) (19,411) (19,876) loss Net losses on foreign exchange 50 50 13 13 Net movement in current assets investments 23 - (312) - (Increase)/decrease in other receivables (313) (312) 48 48 Increase in other payables 36 36 132 138 Overseas withholding tax recovered - - 3 3 Overseas tax received/(paid) 6 6 (26) (26) ------------ ------------ ------------ ------------- Net cash inflow from operating 659 156 578 431 activities before interest and tax Interest paid (607) (607) (425) (425) Corporation tax paid (445) - - - ------------ ------------ ----------- ------------ Net cash (outflow)/inflow from operating activities (393) (451) 153 6 ------------ ------------ ----------- ------------ Cashflow from investing activities Purchase of investments (35,768) (35,286) (51,480) (54,246) Sales of investments 43,172 43,172 40,925 40,931 ----------- ------------ ----------- ------------ Net cash inflow/(outflow) from investing activities 7,404 7,886 (10,555) (13,315) ----------- ------------ ----------- ------------ Financing activities Issue of manager warrants 198 198 734 734 Dividends paid (670) (670) (436) (436) Increase in bank loan - - 6,700 6,700 Increase in inter company loan - 2,355 - - Share issue 73 73 - - Share issue expenses (72) (72) - - ----------- ------------ ---------- ---------- Net cash (outflow)/inflow from financing activities (471) 1,884 6,998 6,998 ----------- ------------ ---------- ----------- Net increase/(decrease) in cash and cash equivalents 6,540 9,319 (3,404) (6,311) Cash and cash equivalents at the start of the year (10,096) (13,003) (5) (5) Effect of foreign exchange rate changes 50 50 13 13 Cashflow from increase in loans - - (6,700) (6,700) ------------ ----------- ------------ ------------ Cash and cash equivalents at the end of the year (3,506) (3,634) (10,096) (13,003) ------------ ----------- ------------ ------------ Bank overdraft - - (1,503) (1,503) Bank loans (11,500) (11,500) (11,500) (11,500) Cash and cash equivalents 7,994 7,866 2,907 - ------------ ----------- ----------- ------------ (3,506) (3,634) (10,096) (13,003) ------------ ----------- ----------- ------------ Notes 1. Accounting policies The Group's financial statements have, for the first time, been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union. The Company's financial statements have also been prepared in accordance with IFRSs as adopted by the European Union and with the provisions of the Companies Act 1985. The Company has taken advantage of the exemption provided under section 230 of the Companies Act 1985 not to publish its income statement and related notes. 2. Earnings per ordinary share The basic revenue earnings per ordinary share is based on the revenue profit for the year of Â£1,209,000 (2005: Â£1,058,000) and on 33,338,030 (2005: 30,914,756) ordinary shares, being the weighted average number of ordinary shares in issue during the year. The basic capital earnings per ordinary share is based on capital profits for the year of Â£18,072,000 (2005: Â£18,638,000) and on 33,338,030 (2005: 30,914,756) ordinary shares, being the weighted average number of ordinary shares in issue during the year. For the purposes of calculating diluted revenue and capital earnings per ordinary share, the number of ordinary shares is the weighted average used in the basic calculation plus the number of ordinary shares deemed to be issued for no consideration on exercise of all manager warrants by reference to the average share price of the ordinary shares during the year. The calculations indicate that the exercise of warrants would result in an increase in the weighted average number of ordinary shares of 2,583,320 (2005: 1,844,066). 3. Net asset value per ordinary share The basic net asset value per ordinary share is based on net assets of Â£83,817,000 (2005: Â£64,935,000) and on 33,358,488 (2005: 33,320,799) shares, being the number of ordinary shares in issue at the year end. The diluted net asset value per ordinary share has been calculated on the assumption that the 6,671,697 manager warrants (2005: 6,118,689) in issue were exercised resulting in a total of 40,030,185 ordinary shares in issue (2005: 39,439,488). 4. Explanation of transition to IFRS a) Reconciliation of equity at 30th April 2005 The Company has adopted IFRSs in respect of the year ended 30th April 2006. In accordance with IFRS 1 'First Time Adoption of Financial Reporting Standards' the following is a reconciliation of the figures at 30th April 2005, which were previously reported under the applicable UK Accounting Standards. Group Company Note Previously IFRS IFRS Previously IFRS IFRS Reported adjustments 30th reported adjustments 30th UK GAAP Â£'000 April UK GAAP Â£'000 April 30th April 2005 30th April 2005 2005 Â£'000 2005 Â£'000 Â£'000 Â£'000 Fixed assets Investments (i) 74,593 (178) 74,415 74,416 (178) 74,238 Investment in (ii) - - - 7,020 688 7,708 subsidiary undertakings Current assets (ii) 4,058 340 4,398 837 - 837 Creditors: amounts falling due within one year (iii) (14,214) 336 (13,878) (18,184) 336 (17,848) ------------ ----------- ------------ ------------ ------------- ----------- Total assets less current liabilities 64,437 498 64,935 64,089 846 64,935 ------------ ----------- ---------- ----------- ------------- ----------- Capital and reserves Share capital 333 - 333 333 - 333 Share premium 23,912 - 23,912 23,912 - 23,912 Special reserve 8,208 - 8,208 8,208 - 8,208 Warrant reserve 1,101 - 1,101 1,101 - 1,101 Capital redemption 2 - 2 2 - 2 reserve Retained earnings - (iv) 325 676 1,001 40 336 376 revenue Retained earnings - (iv) 30,556 (178) 30,378 30,493 510 31,003 capital ------------ ------------ ----------- ------------- ------------ ----------- 64,437 498 64,935 64,089 846 64,935 ------------ ------------ ----------- ------------- ------------ ----------- Net asset value per ordinary share 193.38 1.50 194.88 ------------ ------------ ----------- b) Reconciliation of the Consolidated Statement of Total Return to the Income Statement for the year ended 30th April 2005 Under IFRS, the Income Statement is the equivalent of the Statement of Total Return as reported previously. Â£'000 Return per ordinary share Total transfer to reserve per consolidated statement of total 18,771 62.79 return Add back dividends on ordinary shares 642 - Change from mid to bid basis at 30th April 2004 143 - Change from mid to bid basis at 30th April 2005 (178) - Change in valuation of current asset investments at 30th April (22) - 2004 Change in valuation of current asset investments at 30th April 340 - 2005 ------------ ------------ Profit for the year per consolidated income statement 19,696 63.71 ------------ ------------ c) Reconciliation of the Cash Flow Statement for the year ended 30th April 2005 Note Previously reported Effect of IFRS UK GAAP Transition to 2005 2005 IFRSs Â£'000 Â£000 Â£'000 Net cash inflow from operating activities (v) 578 (425) 153 Returns on investments and servicing of (v) (10,980) 425 (10,555) finance Equity dividends paid (vi) (436) 436 - ------------- ------------- ----------- Net cash inflow before financing (10,838) 436 (10,402) Financing (vi) 7,434 (436) 6,998 ------------- ------------- ----------- Decrease in cash (3,404) - (3,404) ------------- ------------- ----------- The above reconciliation shows the re-allocation of amounts within the cash flow statement and the actual cash flows remain unchanged. Notes are shown below. 5. Reconciliation of opening balances at 1st May 2004 The Company has adopted IFRSs in respect of the year ended 30th April 2006. In accordance with IFRS 1 'First Time Adoption of Financial Reporting Standards' the following is a reconciliation of the figures at 30th April 2004, the date of the Group's transition to IFRS, which were previously reported under the applicable UK Accounting Standards. Group Company Note Previously IFRS IFRS Previously IFRS IFRS Reported adjustments 30th Reported adjustments 30th UK GAAP Â£'000 April UK GAAP Â£'000 April April 30th 2004 30th April 2004 2004 Â£'000 2004 Â£'000 Â£'000 Â£'000 Fixed assets Investments (i) 39,742 (143) 39,599 39,742 (143) 39,599 Investments in subsidiary (ii) - - - - 223 223 undertaking Current assets (ii) 5,873 22 5,895 5,673 - 5,673 Creditors: amounts (iii) (6,191) 131 (6,060) (6,192) 131 (6,061) falling due within one year ----------- ----------- ----------- ------------- ------------- ----------- Total assets less current liabilities 39,424 10 39,434 39,223 211 39,434 ----------- ----------- ----------- ------------- ------------- ----------- Capital and reserves Share capital 306 - 306 306 - 306 Share premium 18,431 - 18,431 18,431 - 18,431 Special reserve 8,208 - 8,208 8,208 - 8,208 Warrant reserve 367 - 367 367 - 367 Capital redemption 2 - 2 2 - 2 reserve Retained earnings - (iv) 227 153 380 26 131 157 revenue Retained earnings - (iv) 11,883 (143) 11,740 11,883 80 11,963 capital ------------ ------------ ------------ ------------- ------------- ----------- 39,424 10 39,434 39,223 211 39,434 ------------ ------------ ------------ ------------- ------------- ----------- Net asset value per 128.86 0.04 128.90 ordinary share ------------ ------------ ------------ Notes to the reconciliations (i) Non-current assets investments are all classified as held at fair value under IFRSs and are carried at bid prices which equates to their fair value. They were previously carried at mid market prices. The resultant difference is included in retained earnings. (ii) Current asset investments are classified as held at fair value under IFRSs and are carried at bid prices which equates to their fair value. They were previously carried at the lower of cost or mid market value. The resultant difference is included in retained earnings. (iii) No provision has been made for any dividend relating to the year end that was not declared and approved until after the balance sheet date. Under IFRSs the dividends are not recognised until they are irrevocably committed for payment. Dividends previously accrued under UK GAAP have been adjusted accordingly. (iv) Under IFRS, there is no differentiation between 'capital' and 'revenue gains/losses'. The previous headings of 'Capital reserve - realised' and 'Capital reserve-unrealised' are now included under the heading 'Retained earnings - capital'. (v) Bank interest paid is now shown under operating activities rather than servicing of finance. (vi) Equity dividends are now disclosed under financing. 6. 2005 accounts The financial information set out above does not constitute the Company's statutory accounts for the year ended 30 April 2006 and 30 April 2005 but is derived from those accounts. Statutory accounts for 2005 have been delivered to the Registrar of Companies. The statutory accounts for 2005 and 2006 both received an audit report which was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 30 April 2006 have not yet been delivered to the Registrar of Companies and will be delivered following the Annual General Meeting. 7. Dividend The Directors declare a second interim dividend of 1.2p per ordinary share, which will be paid on 31st August 2006 to eligible shareholders on the register as at close of business on 11th August 2006. The Annual Report will be sent to shareholders in early August 2006 and thereafter copies will be available from the registered office at Cassini House, 57 St James's Street, London SW1A 1LD. The Annual General Meeting of the Company will be held on 7th September 2006. Artemis Investment Management Limited Secretary 1st August 2006 This information is provided by RNS The company news service from the London Stock Exchange

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