Final Results
Witan Pacific Investment Trust PLC
22 April 2008
WITAN PACIFIC INVESTMENT TRUST PLC
Unaudited preliminary announcement for the year ended 31 January 2008
Chairman's Statement
I am delighted that, for the second year running, I can report that the Company
outperformed its benchmark.
The Company's Net Asset Value ('NAV') total return of 4.7% outperformed the MSCI
AC Asia Pacific Free Index by just over 2.0% in the year. Since adoption of the
multi-manager structure in May 2005 the Company is 1.9% ahead of the benchmark
index's return.
When your Board implemented the multi-manager structure it was designed to lead
to outperformance of the index with low levels of volatility relative to the
index, bearing in mind the markets in which it invests. As I noted last year,
the pattern of returns from both the managers during the course of this year
reflects their individual strengths. For the year ended 31 January 2008, Nomura
outperformed the benchmark by 1.9%, with a return of 4.6%, and Aberdeen
outperformed by 3.0%, with a 5.7% return. Nomura's outperformance showed greater
consistency through the year whereas Aberdeen's was more volatile. For an Asia
Pacific Manager the weighting to Japan is the single biggest decision they make
and, both your managers maintained an underweight position during the year.
We believe that the structure of the fund which gives investors access to all of
Asia, and where our two investment managers use their expertise to make the
asset allocation between countries, makes this Company particularly suitable for
those who want broad exposure to the area but who do not wish to make the asset
allocation decision themselves.
Your Board brings a diverse range of skills and experience to bear when
reviewing critically the investment managers' policies and results. They
interact with the managers regularly to understand the consistency of the
implementation of the managers' styles and logic in their investment process.
During the year both managers have regularly attended our Board meetings in
person and by video link. I spent time with the managers in Singapore, where I
went on company visits and attended investment team meetings. This was highly
informative as I saw how each manager's process worked in action. The executive
managers and the directors also met informally with the investment managers when
they were visiting the UK.
It is pleasing to report a slight reduction in the total expense ratio ('TER'),
year on year, excluding performance fees, to 0.7%. The Board is committed to
running your Company in the most cost effective and efficient way as possible
and this low TER demonstrates that an Investment Trust structure is a highly
effective way to run a multi-manager vehicle at a low cost.
We continue our policy of distributing as much income as may be prudent. This
year we are recommending a final dividend of 1.65p per share, an increase of 10%
compared with last year's dividend. This dividend is payable on 27June 2008 to
shareholders on the register at the close of business on 30 May 2008.
Your Board believes that it is in shareholders' interests to buy back the
Company's shares when they are standing at a substantial discount to their NAV.
During the year the Company bought back 5,344,472 shares which had the effect of
enhancing the NAV by approximately 0.8%. It is intended to seek renewal of the
buy back authority at the forthcoming Annual General Meeting ('AGM'). In
addition, the Board proposes to seek the renewal of authority to take shares
into treasury for re-sale to the market at a later date. This power will be used
to issue shares only at NAV or at a premium to NAV.
As a result of the outcome of various court cases over the last twelve months
regarding the historic imposition of VAT on Investment Management Fees some
Investment Trusts may eventually be able to reclaim significant amounts of VAT.
However, as the Company conducts virtually all of its business outside the UK,
and indeed the EU, it has very little VAT to reclaim.
After the migration of savings schemes to Witan Wealthbuilder in late 2006 it is
pleasing that 3,206 investors now participate in the Company through these
savings schemes. Regular updates on your Company can be found on
www.witanpacific.com
As to the future, while the effects of the US sub-prime crisis work themselves
out in the credit markets and in the economies as a whole, the question will be
how far might the contagion spread. The overall outlook for the Asia-Pacific
region will be dependant on whether its economies have now truly decoupled from
the major western economies. But even if the economies have separated from the
US and Europe, the stockmarkets may not be immune from what is happening to
other world markets. Integration in Asia continues apace: many Japanese
companies for example are now driven by Asian demand, not just domestic factors.
An important strength in the structure of the Company is the location of the
managers within the region. Each one has offices in both Tokyo and Singapore
(and other countries) and both are well placed to determine the asset allocation
between Japan and the other countries in the region and to judge in which
companies are the best to invest.
The AGM will be held on 12 June 2008 at 12 noon at Cazenove Auditorium, 20
Moorgate, London, EC2R 6DA. I look forward to welcoming all of those able to
attend.
Gillian Nott
Chairman
22 April 2008
Business Review
The review which follows is designed to provide shareholders with information
about your Company's business and results for the year ended 31 January 2008.
The Business Review is addressed only to shareholders as a body and no liability
can be admitted by the Directors to any other party in connection herewith. Any
forward looking statements contained in the Business Review reflect the
knowledge and information available to Directors at the time the Business Review
was prepared.
This Business Review has been prepared in accordance with the requirements of
Sections 416 and 417 of the Companies Act 2006 and current best practice.
All of the matters previously dealt with in the Executive Manager's Review are
now included in this review which covers the following:
• Objective and Strategy
• Management arrangements
• Portfolio Review
• Investment Manager review process
• Buy back policy
• Third party service providers review process
• Principal Risks
• Key performance indicators
• Your Board's priorities for 2008
• Outlook
Objective and Strategy
The Company's investment objective are to provide shareholders with a balanced
portfolio of investments in the Asia-Pacific region designed to outperform the
MSCI AC Asia Pacific Free Index ('MSCI Index') in sterling terms. From an
investment perspective this means that your Company will seek to provide steady
above average performance compared with the relevant MSCI Index in sterling
terms predominantly aiming to achieve this through growth in capital.
Your Company aims to outperform by using an active multi-manager approach.
Currently the Board has appointed two investment managers but their performance
is subject to regular review and the Board has the ability, should it wish, to
change the managers and to increase/decrease the number of managers used. The
Company has a policy of deploying gearing in a tactical sense, giving its
Investment Managers discretion to hold up to 10% of their portfolio in cash or
borrow up to 10%. Your Company will distribute as much income as may be prudent
on an annual basis to shareholders.
The Board employs share buy-backs to manage the discount appropriately expecting
that the level will be comparable to most of its peers. Share buy-backs provide
liquidity and enhance the NAV of the Company. In addition, your Company sponsors
an ongoing marketing programme provided by Witan Investment Services Limited.
This programme reaches out to both the private and professional investor using a
blend of targeted marketing disciplines.
Your Board aims to provide the best possible return to shareholders. The
unbundling of the investment management services and other necessary services
has provided greater transparency of the Company's cost base. Your Board applies
strict controls on costs and expenses, maintaining a total expense ratio for the
Company of less than 1%.
Management Arrangements
The management of the Company's assets is entirely outsourced to third parties.
Witan Investment Services Limited acts as Executive Manager to manage and
control the outsourced structure and relationships and to assist the Board on
investment strategy and marketing.
In summary, the Board sets the Company's strategy and the Executive Manager
monitors and implements this same strategy.
The following table shows the investment management arrangements:
Equity Mandate Investment Manager Mandate Benchmark (£) % of Initial Portfolio
Asia-Pacific Aberdeen MSCI AC Asia Pacific Free 50%
Index
Asia-Pacific Nomura MSCI AC Asia Pacific Free 50%
Index
Your Company has also appointed third parties for the various supporting
services it requires. The principal ones are JPMorgan Chase for global custody,
BNP Paribas Fund Services UK Limited for investment accounting and
administration and BNP Paribas Secretarial Services Limited for company
secretarial services. From time to time, as required, the Company also buys in
services for legal, investment consulting, financial and tax advice.
Although multi-manager arrangements can prove expensive, the Company's careful
cost control has resulted in a total expense ratio of 0.7% which is much lower
than any retail open-ended funds with this regional mandate.
Portfolio Review
For the second year running returns from the Asia-Pacific markets, as a whole,
were relatively modest at 2.6% for the year ended 31 January 2008. Also, like
last year this return masks a great deal of volatility both within markets as
the year progressed and across markets. There was a nervous start to the year as
a result of a sharp drop in Chinese equities as the Chinese authorities moved to
curb runaway lending. Sentiment rebounded on upbeat corporate earnings and
macroeconomic news flow, but markets suffered a second sell-off when the first
signs of US mortgage lending troubles surfaced in August 2007. Emergency funding
by the major central banks and US interest rate cuts to boost liquidity helped
ameliorate the downswing in sentiment, but fear was never far away and
resurfaced again in January 2008 when the extent of the sub-prime mortgage
crisis became more apparent.
Across the region there was once again a great dispersion of returns; from
Indonesia which was up 57.1%, India (+42.4%) and Thailand (+34.6%) to Japan
(-10.7%) and Taiwan (-1.1%).
Although markets were volatile, economies maintained their momentum throughout
the year, with Japan a notable exception. A change in prime minister there did
little to dispel policy dithering, while weak incomes and jobs growth left
household spending flat. Elsewhere, the twin growth engines remained China and
India, with a stronger Euro helping to boost demand from Europe.
India's growth was precipitated by continued strong domestic demand, while
Singapore benefited from a construction boom as did Hong Kong. However, set
against these positive developments, rising prices continued to worry
policymakers. China, India, Japan, South Korea and Taiwan tightened monetary
policy, while Australia did the same to cool consumer spending. In contrast,
Indonesia and the Philippines were able to cut already high interest rates to
boost growth; Thailand also eased policy.
Meanwhile, the political order changed in many countries. In Australia, the
Labour Party's sweeping victory ended John Howard's eleven year rule while, in
Thailand, People Power Party's leader Samak Sundaravej was appointed prime
minister, paving the way for return of populist policies and former leader
Thaksin Shinawatra. Both South Korea's conservative candidate Lee Myung-Bak and
Taiwan's opposition nationalist Kuomintang Party scored strong wins at the
polls. In Japan, Liberal Democrat Party stalwart Yasuo Fukudo replaced Shinzo
Abe as prime minister as noted above. Pakistan postponed its national elections
after opposition leader Benazir Bhutto was assassinated in December 2007.
Your Company is managed in two approximately equal-sized portfolios by Aberdeen
and Nomura. Each is expected to outperform the MSCI AC Asia Pacific Free Index
in sterling over the medium to long-term. Although both have strong investment
philosophies based on fundamental research and a long term track record of
outperformance, they manage their portfolios in very different ways.
Aberdeen is a pure stockpicker, investing in a relatively small number of stocks
that have met their exacting research criteria. They do not take top down
country or even sector views - instead these become a reflection of the
individual stock preferences. They focus on 'well-managed businesses with strong
balance sheets and cashflows, sensible management with regard for minority
shareholders and attractive valuations'. They pay little regard to Index
construction and therefore will deviate significantly from the Index returns.
Their track record built up over a very long time period does suggest that they
have the capability to outperform the Index substantially.
During the year under review, the Aberdeen portfolio returned 5.7% in sterling
terms, compared with the benchmark Asia-Pacific Index's, return of 2.6%. The
main reason for this outperformance was that Aberdeen's stock positions resulted
in them being overweight in India and Hong Kong, markets which did very well,
and underweight in Japan which, as noted above, performed poorly.
New holdings in their portfolio included four Japanese holdings: Shin-etsu
Chemical Company, which produces and distributes chemical and fertiliser
products, Mitsubishi Estate, the premier landlord in the prime Marunouchi
district of Tokyo, Sapporo Hokuyo, which has a strong banking franchise in the
northern province of Sapporo and Toyota Motor Corporation which has a strong
product range and a different geographical emphasis from rival Honda Motor,
which Aberdeen also hold. Aberdeen also started positions in Singapore-listed
Fraser & Neave, a regional food and beverages company with additional interests
in property and publishing. To fund these purchases Aberdeen sold chemicals
manufacturer Kaneka and transportation logistics group Seino Holdings on
business concerns, as well as MUFJ Financial Group, Japan's largest bank.
On the outlook for the region Aberdeen say:
'The sub-prime fallout may have some way to go, with credit markets continuing
to shrink. For this reason, investor confidence in Asia remains fragile. A
decline in export demand, which is already setting in, is likely to deepen,
given that the US is facing recession and the European Union recently lowered
its growth outlook. In Japan, the central bank has become increasingly worried
about the economy. Consumer prices have been rising, but not to levels that
would spur the Bank of Japan to normalise interest rates. Across the rest of
Asia, inflation is likely to remain a thorn in the side of policymakers.
However, corporate fundamentals remain strong. One positive effect of a slowing
global economy has been the skimming of the froth from markets, such as China
and India. As a result, the gap between these outperfomers and laggard markets,
such as Thailand, has narrowed. But nowhere are valuations especially cheap,
which is why further consolidation is desirable. We see earnings at best in
single digits this year, but in a tougher environment there will be as much
focus on balance sheet strength. So saying, we remain cautious over the short
term and committed to our approach of investing only in companies with quality
management that are conservatively run.'
Nomura regard themselves as a 'core' or 'flexible' manager in terms of style.
They focus on identifying stocks, through fundamental research, which are
trading at less than fair value. Nomura also take top down country and sector
views and control the size of positions they take against the index. Their
relative approach is designed to add value in all market conditions over the
medium to longer term. Their long term track record supports this claim.
During the year under review, the Nomura portfolio returned 4.6%; they therefore
outperformed the index by 1.9%. Country allocation and stock selection both
contributed positively to the relative performance. In terms of country
allocation, the underweight position in Japan and the overweight position in
Hong Kong and China added value to the portfolio. In terms of stock selection,
the value added from the Asia excluding Japan portfolio was able to overcome the
negative contribution from the Japanese holdings. The Australian portfolio
contributed significantly to the outperformance helped by a large overweight
position in resource companies including BHP Billiton and Rio Tinto. Both
companies benefited from the surging commodity prices that led to the prospect
of significant earnings upgrades. In addition, news of BHP Billiton's approach
to Rio Tinto with a merger proposal sent Rio Tinto's stock price to a record
high. Stock selection in China was also positive. Zijing Mining in the materials
sector contributed positively as the stock rallied on the back of strong global
gold prices. In Japan lack of exposure to Nintendo had a negative effect as
sales of the new games consoles boomed.
On the outlook, Nomura say:
'Asian stock markets are likely to continue to exhibit high levels of volatility
amidst the uncertainty in the US. We should begin to see some earnings
downgrades across the region, which will keep investor sentiment on the cautious
side and could cause some re-evaluation of assumptions. Balance sheets of most
Asian economies are healthy and they are therefore well placed to withstand an
economic slowdown. Nevertheless, since these economies do rely on exports to a
certain extent, they would also be vulnerable to slowing US and European
economies. Against this background we are happy to remain underweight in Japan
and cautiously overweight in Hong Kong and China. India is our most favoured
market as it is the least correlated with the rest of Asia and offers ample
stock selection opportunities.'
Performance for the year 31 January 2007 to 31 January 2008 and from inception
of the multi-manager structure to 31 January 2008
Investment Value of funds % of the Performance in Benchmark Performance in Benchmark
Manager under management Company's the year performance the period performance
£m at 31.01.08 assets under 31.01.07 to 31.01.07 to 31.05.05 to 31.05.05 to
management at 31.01.08 31.01.08 31.01.08 31.01.08
31.01.08
% % % (annualised) % (annualised)
Aberdeen 65.2 49.9 5.7 2.6 16.1 14.0
Nomura 65.3 50.0 4.6 2.6 15.1 14.0
Investment Manager Review Process
During the year ended 31 January 2008, as in the previous year, the Board
reviewed the Company's benchmark and the investment management structure to
ensure that they were still appropriate for your Company's objectives.
The Board have appointed Witan Investment Services to monitor and review the
performance of the respective investment managers, Aberdeen and Nomura.
In addition, the Board met with the investment managers four times during the
year under review. At these meetings the investment managers were asked, among
other things, to:
• explain their asset allocation within the region;
• explain their choice of investments, which enabled the Board to check that
these were within the Company's mandate guidelines and in accordance with the
Investment Manager's own investment philosophies;
• provide a detailed analysis of their performance to date and the reasons
behind it;
• report on any significant changes to the organisation; and
• re-affirm their investment strategy and philosophy.
If the Board had felt any dissatisfaction on any of these points then this would
have led to a formal review.
Buy back Policy
Your Board believes that it is in shareholder's interests to buy back the
Company's shares when they are standing at a substantial discount to NAV. Any
purchase of shares at a discount to their NAV will lead to an increase in that
NAV and will support an increase in the Company's share price, all other things
being equal.
In the year ended 31 January 2008 the Company bought back and cancelled a total
of 5,344,472 of its ordinary shares at a cost of £9,334,000 including stamp
duty. The result of this in terms of performance enhancement was to add just
under 0.8% to the NAV per share as at 31 January 2008.
Third Party Service Providers
As described in Management Arrangements above, the Company has outsourced all of
its operational infrastructure to third party organisations. Contracts and
service level agreements have been defined to ensure that the service provided
by each of the third party organisations is of a sufficiently professional and
technically high standard required. All third party service providers are
reviewed by the Audit and Management Engagement committee on an annual basis.
Principal Risks
Because the Company is essentially a vehicle for overseas equity investment,
your Board is unlikely, in normal conditions to be anything other than fully
invested subject to the tactical positions of the Investment Managers. The prime
risk, therefore, of investing in the Company, remains a fall in equity prices.
The other generic risks associated with any international or regional equity
portfolio are those of strategy and of country, currency, industrial sector and
stock selection. There are also risks associated with the selection of
Investment Managers. Your Board seeks to manage these risks through the
appropriate application of gearing, liquidity and investment mandates and by
monitoring the stock selection activities of your Investment Managers. Moreover,
the adverse effects of a failure, however defined, by an individual Investment
Manager are reduced significantly by the multi-manager structure, and the
different styles of each of the two Investment Managers. Further, your Board
regularly reviews the Investment Managers for this reason.
In addition, your Company also faces the risk that its objective and strategy
become inappropriate in a rapidly changing financial services and savings
market. This is a matter which is reviewed regularly at meetings of your Board.
These reviews focus on investment policy, the role of marketing and the Witan
Wealthbuilder savings schemes and discount control policies, as well as wider
industry trends.
Finally, there are operational and regulatory risks, and the risk of errors and
omissions. These are regularly reviewed by the Company's Audit Committee. Your
Board also takes professional legal, accounting and tax advice in advance,
concerning any proposed activity of your Company. Operationally, the
multi-manager structure is robust as each of the Investment Managers, the
custodian and the fund accountants keep their own records which are reconciled
on a monthly basis. In addition, our Executive Manager, Witan Investment
Services Limited monitors the activities of all third parties and escalates any
issues to the Board. Comprehensive contractual obligations and indemnification
provisions have been put in place with each of the third party service
providers.
Key Performance Indicators
Your Board assesses its performance in meeting the Company's objective against
the following key performance indicators:
• Net asset value return
• Share price return
• Performance against the benchmark
• Discount to net asset value
• Dividend payout
• The level of buy-back activity
• Total expense ratio
• Growth in number of private investors
The Board also reviews both absolute and relative volatility and risk statistics
for the portfolio.
Your Board's Priorities for 2008
At the beginning of every year, your Board has an 'away day' at which it sets
its priorities for the next twelve months. In January 2008 the Board agreed that
it would progress discussions around the strategic direction of the Company,
strengthen relationships with existing shareholders, enhance the Company's
marketing activities and seek to generate new shareholders.
Outlook
Since the multi-manager arrangements were put in place in May 2005 markets in
the Asia-Pacific region (and around the world) have continued to perform well
and the Company has outperformed its benchmark. The outlook for the Asia-Pacific
region is still very attractive over the medium to long term. Nevertheless, the
problems of the developed economies and markets are likely to impact on
Asia-Pacific markets. We can expect volatility to remain high.
By order of the Board
BNP Paribas Secretarial Services Limited,
Secretary
22 April 2008
UNAUDITED INCOME STATEMENT
for the year ended 31 January 2008
Year ended 31 January 2008 Year ended 31 January 2007
Revenue Capital Revenue Capital
return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on investments held at fair
value through profit or loss - 4,262 4,262 - (966) (966)
Exchange losses - (71) (71) - (144) (144)
Investment income (note 2) 3,183 - 3,183 3,491 - 3,491
Management fees (335) - (335) (323) - (323)
Performance fees - (165) (165) - (134) (134)
Other expenses (603) (37) (640) (826) (40) (866)
--------- --------- --------- --------- --------- ---------
Net return/(loss) before finance charges
and taxation 2,245 3,989 6,234 2,342 (1,284) 1,058
Finance charges (189) - (189) (173) - (173)
--------- --------- --------- --------- --------- ---------
Net return/(loss) on ordinary activities
before taxation 2,056 3,989 6,045 2,169 (1,284) 885
Taxation on ordinary activities (note 3) (649) 49 (600) (739) 40 (699)
--------- --------- --------- --------- --------- ---------
Net return/(loss) on ordinary activities
after taxation 1,407 4,038 5,445 1,430 (1,244) 186
====== ====== ====== ====== ====== ======
Return/(loss) per ordinary share - pence
(note 4) 2.00 5.74 7.74 1.75 (1.52) 0.23
====== ====== ====== ====== ====== ======
All revenue and capital items in the above statement derive from continuing
operations.
The total columns of this statement represent the Income Statement of the
Company. The revenue return and capital return columns are supplementary to this
and are prepared under guidance published by the Association of Investment
Companies.
The Company had no recognised gains or losses other than those disclosed in the
Income Statement and Reconciliation of Movements in Shareholders' Funds.
UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 January 2008
Called up Share Capital
share premium redemption Capital Revenue
capital account reserve reserves reserve Total
£'000 £'000 £ '000 £'000 £'000 £'000
Year ended 31 January 2008
At 31 January 2007 18,223 5 39,348 66,387 8,586 132,549
Net return from ordinary
activities after taxation - - - 4,038 1,407 5,445
Dividends paid in respect of year
ended 31 January 2007 - - - - (1,077) (1,077)
Purchase of own shares (1,336) - 1,336 (9,334) - (9,334)
--------- --------- --------- --------- --------- ---------
At 31 January 2008 16,887 5 40,684 61,091 8,916 127,583
====== ====== ====== ====== ====== ======
Year ended 31 January 2007
At 31 January 2006 21,701 5 35,870 89,691 8,286 155,553
Net (loss)/return from ordinary
activities after taxation - - - (1,244) 1,430 186
Dividends paid in respect of year
ended 31 January 2006 - - - - (1,130) (1,130)
Purchase of own shares (3,478) - 3,478 (22,060) - (22,060)
--------- --------- --------- --------- --------- ---------
At 31 January 2007 18,223 5 39,348 66,387 8,586 132,549
====== ====== ====== ====== ====== ======
UNAUDITED BALANCE SHEET
at 31 January 2008
2008 2007
£'000 £'000
Fixed assets
Investments designated as held at fair value through profit or loss 128,721 133,353
------------ ------------
Current assets
Debtors 1,434 673
Cash at bank and short term deposits 2,311 2,903
------------ ------------
3,745 3,576
------------ ------------
Creditors: amounts falling due within one year
Bank loan (3,000) (3,000)
Other (1,840) (1,334)
------------ ------------
(4,840) (4,334)
------------ ------------
Net current liabilities (1,095) (758)
------------ ------------
Total assets less current liabilities 127,626 132,595
------------ ------------
Provision for liabilities and charges (43) (46)
------------ ------------
Net assets 127,583 132,549
====== ======
Capital and reserves
Called up share capital 16,887 18,223
Share premium account 5 5
Capital redemption reserve 40,684 39,348
Capital reserves 61,091 66,387
Revenue reserve 8,916 8,586
------------ ------------
Equity shareholders' funds 127,583 132,549
====== ======
Net asset value per ordinary share - pence (note 5) 188.88 181.85
====== ======
Authorised and approved by the Board on 22 April 2008 and signed on its behalf
by:
Gillian Nott
Chairman
UNAUDITED CASH FLOW STATEMENT
for the year ended 31 January 2008
2008 2008 2007 2007
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 1,913 2,109
Servicing of finance
Bank and loan interest paid (159) (162)
------------ ------------
Net cash outflow from servicing of finance (159) (162)
Taxation
UK Corporation tax paid (428) (490)
Withholding tax deducted from dividends (179) (206)
------------ ------------
Net tax paid (607) (696)
Capital expenditure and financial investment
Purchases of investments (40,041) (36,748)
Sales of investments 48,883 56,651
Capital expenses and performance fee payments (94) (155)
------------ ------------
Net cash inflow from financial investment 8,748 19,748
Equity dividends paid (1,077) (1,130)
------------ ------------
Net cash inflow before financing 8,818 19,869
Financing
Repurchase of own shares/tender offer (9,339) (22,055)
------------ ------------
Net cash outflow from financing (9,339) (22,055)
------------ ------------
Decrease in cash (521) (2,186)
====== ======
Reconciliation of net cash flow to movements in net
funds/(debt)
Decrease in cash as above (521) (2,186)
Exchange movements (71) (144)
------------ ------------
Movement in net debt in the year (592) (2,330)
Net (debt)/funds at 1 February (97) 2,233
------------ ------------
Net debt at 31 January (689) (97)
====== ======
NOTES TO THE ACCOUNTS
for the year ended 31 January 2008
1 Basis of preparation
The financial statements have been prepared on the basis of the accounting
policies set out in the Company's financial statements for the year ended 31
January 2007.
2 Investment income
2008 2007
£'000 £'000
Income from investments held at fair value through profit or loss
Overseas dividends 2,975 3,204
UK dividends 40 27
Overseas scrip dividends 14 81
-------- --------
3,029 3,312
-------- --------
Other income
Bank interest 121 155
Stock lending fees 33 24
-------- --------
154 179
-------- --------
Total income 3,183 3,491
===== =====
Total income comprises:
Dividends 3,029 3,312
Other income 154 179
-------- --------
3,183 3,491
===== =====
Income from investments comprises:
Listed overseas 2,989 3,285
UK listed 40 27
-------- --------
3,029 3,312
===== =====
3 Taxation on ordinary activities
Analysis of tax charge for the year
2008 2008 2007 2007
Revenue Capital 2008 Revenue Capital 2007
return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000
Corporation tax payable at
30% (2007: 30%) 615 (49) 566 680 (40) 640
Relief for overseas
taxation (142) - (142) (170) - (170)
--------- --------- --------- --------- --------- ---------
473 (49) 424 510 (40) 470
Overseas taxation 179 - 179 221 - 221
--------- --------- --------- --------- --------- ---------
Total current taxation
charge 652 (49) 603 731 (40) 691
Deferred tax
On accrued income (3) - (3) 8 - 8
--------- --------- --------- --------- --------- ---------
Taxation on ordinary
activities 649 (49) 600 739 (40) 699
===== ===== ===== ===== ===== =====
4 Return/(loss) per ordinary share
The total return per ordinary share is based on the net return attributable to
the ordinary shares of £5,445,000 (2007: £186,000) and on 70,319,982 ordinary
shares (2007: 81,701,101) being the weighted average number of shares in issue
during the year.
The total return can be further analysed as follows:
2008 2007
£'000 £'000
Revenue return 1,407 1,430
Capital return/(loss) 4,038 (1,244)
-------- --------
Total 5,445 186
===== =====
Weighted average number of ordinary shares 70,319,982 81,701,101
Revenue return per ordinary share - pence 2.00 1.75
Capital return/(loss) per ordinary share - pence 5.74 (1.52)
---------- ----------
Total per ordinary share - pence 7.74 0.23
====== ======
The Company does not have any dilutive securities.
5 Net asset value per ordinary share
Net asset values are based on net assets of £127,583,000 (2007: £132,549,000)
and on 67,545,851 (2007: 72,890,323) ordinary shares in issue at the year end.
6 Dividends
A final dividend of 1.65p per share for the year ended 31 January 2008 will be
paid on 27 June 2008 to ordinary shareholders on the register at close of
business on 30 May 2008. The ex-dividend date is 28 May 2008. The total cost of
this dividend, based on the number of shares in issue as at 22 April 2008, is
£1,114,000. For the year ended 31 January 2007, 1.50p per share was paid to
ordinary shareholders.
7 Financial Statements
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31 January 2008 or 31 January
2007. The financial information for the year ended 31 January 2007 has been
extracted from the audited statutory accounts for that year. The auditors report
on those accounts was unqualified and did not contain a statement under either
Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory
accounts for the year ended 31 January 2008 will be finalised on the basis of
the financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.
Copies of the annual report and accounts will be sent to shareholders in May
2008 and will be available from the Company Secretary at the registered office
of 55 Moorgate, London, EC2R 6PA. For further information, please contact:
BNP Paribas Secretarial Services Limited
Tel: 0141 225 3009
22 April 2008
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 3 hours ago Marlowe
- 3 hours ago Haleon
- 3 hours ago TUI AG Reg Shs (DI)
- 3 hours ago Georgia Capital
- 3 hours ago Weir Group