Interim Results

Preliminary Results For the six months ended 30 September 2002 Blue Planet Financials Growth and Income Investment Trust No 1 plc Blue Planet Financials Growth and Income Investment Trust No 2 plc Blue Planet Financials Growth and Income Investment Trust No 3 plc Blue Planet Financials Growth and Income Investment Trust No 4 plc Blue Planet Financials Growth and Income Investment Trust No 5 plc Blue Planet Financials Growth and Income Investment Trust No 6 plc Blue Planet Financials Growth and Income Investment Trust No 7 plc Blue Planet Financials Growth and Income Investment Trust No 8 plc Blue Planet Financials Growth and Income Investment Trust No 9 plc Blue Planet Financials Growth and Income Investment Trust No 10 plc Each of the investment trusts is a separate limited company, but otherwise they are to all intents and purposes identical. The information contained in this Interim Report including the financial statements applies equally to each of the ten Trusts. Trading in the shares and warrants of the Trusts The Trusts' shares and warrants can be traded in share or warrant units. Each unit comprises 10 shares or warrants respectively, 1 in each of the ten trusts. It is generally cheaper for investors to trade in the units rather than the underlying shares or warrants. Objective The ten Blue Planet Financials Growth and Income Investment Trusts offer investors a high level of income combined with capital growth and the opportunity to profit from the ongoing rationalisation of the Financial Services sector. Financial Highlights Six months ended Six months ended Year ended 30 September 2002 30 September 2001 31 March 2002 (unaudited) (unaudited) Pence per ordinary share Net asset value-basic 101.94 128.39 139.94 Net asset value-diluted 101.62 123.83 139.50 Dividend 1.35 1.50 4.00 Earnings 2.65 3.22 4.72 Capital Return (39.44) (12.74) (0.44) Total Return-basic (36.79) (9.52) 4.28 Dividend An interim net dividend of 1.35p per ordinary share has been declared, payable on 29 January 2003, to shareholders on the register as at the close of business on 31 December 2002. The Trusts' shares will be quoted ex-dividend on 27 December 2002. Capital Gains Tax Apportionment for capital gains tax between ordinary shares and warrants based on mid-market prices on the first day (25 April 1996) of dealings in the ordinary shares and the warrants: Each ordinary share 95.24p Each warrant 23.80p Chairman's Report Performance Shareholders will be aware of the extraordinary falls in financial markets which have seen equity indices at a six year low. This interim report covers the six months to 30 September 2002 for your Company - a period which saw your Company affected by very harsh conditions in equity markets. Broad indices like the FTSE 100 Index fell 29.4% and the more specific FTSE indices covering Banks fell 27.9% and Insurance fell 49.3%. The Company's investment portfolio fell 20.5% before adjustment for gearing. A company gears by borrowing money. It does this in the belief it can generate returns on those monies in excess of the cost of borrowing. In periods of falling portfolio values, gearing adversely affects performance, but beneficially affects performance in periods when the value of the company's investments are rising. When gearing is taken into account for this period the Net Asset Value fell 28.4%. The Net Asset Value was helped by the exercise of buyback powers which reduced the number of shares in issue and limited the fall in Net Asset Value per share to 27.2% Compared with the NAV reduction, the share price performed noticeably better with a 10.3% decline in the unit price. Within the portfolio best performances came from: * Erste Bank, Austria, which was sold after a rights issue was announced; * First Active subordinated bonds; and * Coventry Building Society Permanent Interest Bearing Shares (PIBs). Bond holdings in the portfolio were quite stable during the period. The stocks that suffered most were: * Abbey National because of unease about corporate strategy and leadership; * Hypovereins Bank, Germany, due to concern over loans exposure; and * Aviva (ex CGNU) owing to anxiety in relation to regulatory capital requirements. In the case of Hypovereins Bank, their extreme discount to book value may make them a target for corporate activity within the German Financial Sector. Gearing At the end of the interim period, the loan as adjusted for cash deposits represented 49% of Net Asset Value. Shareholder Services We constantly review the value for money of services to Shareholders. A review of costs from the Company has resulted in the decision to consolidate the information published in newspapers so that the share price will only be published in The Times from now on. Shareholders can view the share price on the Blue Planet website (www.blueplanet.ac) and the London Stock Exchange website (www.londonstockexchange.com). Other costs have also been reduced and this will be reflected in the full years results. Dividend The Company has continued its switch from bonds into equities and this has, as anticipated, reduced net income. This has been carried out in anticipation of a better overall return in the future. An interim dividend of 1.35p per share (13.5p per unit) will be paid to shareholders on 29 January 2003 against an interim dividend last year of 1.5p per share (15.0p per unit). Outlook Falls in equity markets were severe over the period, although there has been some recovery since. The impact of the stock market falls on corporate confidence will remain for some months. However, valuations on the whole look extremely attractive and some new corporate activity has been mooted, for example, with Abbey National and HSBC. Corporate activity will grow if markets remain around current levels as companies regain composure and look at the opportunities available to them from mergers and acquisitions. Justification for this increase will be productivity benefit. We shall be continuing to study employment figures in the UK as a key indicator in the next six months which, encouragingly, do not show any sign of significant easing. There are also encouraging signs of growth in consumer spending in the United States and continued growth in activity in bank transactions. I am happy to report that your Company has emerged from the storm of the last few months in good health and we are well placed to continue the trend of reducing bond holdings in favour of equities in the coming months. I believe that the shares, at current levels, represent a good, geared, recovery play on the banking and financial sector, and offer an attractive dividend yield. Thank you for your continuing support. Philip Court Chairman 09 December 2002 Statement of Total Return (incorporating the revenue account) For the six months ended 30 For the six months ended 30 For the year ended September 2002 (unaudited) September 2001 (unaudited) 31 March 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ £ £ £ Capital (losses)/gains on investments Net realised gains - 129,641 129,641 - - - - 78,664 78,664 Unrealised losses on investments - (660,567) (660,567) - (164,093) (164,093) - (56,511) (56,511) Net capital (losses) /gains on investments - (530,926) (530,926) - (164,093) (164,093) - 22,153 22,153 Gross revenue Income from investments 77,758 - 77,758 91,017 - 91,017 141,280 - 141,280 Other interest receivable 3,433 - 3,433 2,317 - 2,317 4,594 - 4,594 Gross revenue and capital (losses)/gains 81,191 (530,926) (449,735) 93,334 (164,093) (70,759) 145,874 22,153 168,027 Administrative expenses (28,977) (7,573) (36,550) (24,973) (7,990) (32,963) (45,059) (16,013) (61,072) Net return before interest payable and taxation 52,214 (538,499) (486,285) 68,361 (172,083) (103,722) 100,815 6,140 106,955 Interest payable (11,255) (11,255) (22,510) (11,050) (11,050) (22,101) (21,028) (21,028) (42,056) Return on ordinary 40,959 (549,754) (508,795) 57,311 (183,133) (125,823) 79,787 (14,888) 64,899 activities before taxation Taxation on return on ordinary activities (4,291) 4,524 233 (12,397) 5,241 (7,156) (13,826) 8,789 (5,037) Return on ordinary activities after taxation 36,668 (545,230) (508,562) 44,914 (177,892) (132,978) 65,961 (6,099) 59,862 Dividends declared Interim dividend of 1.35p (2002 1.5p) per share (18,406) - (18,406) (20,961) - (20,961) (20,961) - (20,961) Final dividend of - p (2002 1.5p) per share - - - - - - (34,698) - (34,698) (18,406) - (18,406) (20,961) - (20,961) (55,659) - (55,659) Transfer to 18,262 (545,230) (526,968) 23,953 (177,892) (153,939) 10,302 (6,099) 4,203 reserves Return per ordinary share - basic 2.65p (39.44)p (36.79)p 3.22p (12.74)p (9.52)p 4.72p (0.44)p 4.28p Return per ordinary share - diluted 2.65p (39.43)p (36.78)p 3.19p (12.54)p (9.45)p 4.71p (0.44)p 4.27p The Revenue column of the statement represents the Profit & Loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. Balance Sheet At 30 September 2002 At 30 September 2001 At 31 March 2002 (unaudited) (unaudited) £ £ £ Fixed asset investments Listed on a recognised investment exchange 2,057,588 2,457,081 2,314,819 Current assets 128,267 125,228 447,003 Creditors: amounts falling due within one year (46,049) (788,251) (69,600) Net current assets/(liabilities) 82,218 (663,023) 377,403 Total assets less current liabilities 2,139,806 1,794,058 2,692,222 Creditors: amounts falling due after more than one year (750,000) - (750,000) Net assets 1,389,806 1,794,058 1,942,222 Capital and reserves Called-up share capital 136,338 139,740 138,790 Share premium account 1,168,608 1,168,062 1,168,062 Other reserves Capital reserve - realised 271,091 126,656 180,889 Capital reserve - unrealised (305,965) 247,813 355,395 Capital redemption reserve 7,950 4,500 5,450 Warrant reserve 63,403 63,517 63,517 Revenue reserve 48,381 43,770 30,119 Equity Shareholders' Funds 1,389,806 1,794,058 1,942,222 Net Asset Value per Ordinary Share - basic 101.94p 128.39p 139.94p Net Asset Value per Ordinary Share - diluted 101.62p 123.90p 133.50p Cashflow For the six months For the six months For the year ended ended ended 30 September 2002 30 September 2001 31 March 2002 (unaudited) (unaudited) £ £ £ Operating activities Cash received from investments 62,294 65,892 138,369 Interest received 3,957 1,728 3,419 Investment management and secretarial fees paid (17,121) (15,752) (31,826) Cash received from/ 47 - (2,700) (paid to and on behalf of) directors Other cash payments (24,967) (18,308) (27,698) Net cash inflow from operating activities 24,210 33,560 79,564 Servicing of finance Interest paid (22,263) (27,084) (47,315) Taxation Tax recovered - - 17,090 Capital expenditure and financial investment Purchase of investments (664,794) (39,994) (42,775) Sale of investments 391,097 - 331,291 Equity dividend paid (34,698) (39,096) (60,057) Financing Purchase of own shares for cancellation (25,138) - (2,538) Proceeds from share issue 480 1,120 1,120 (Decrease)/increase in cash (331,106) (71,494) 276,380 Notes 1. The Company has adopted the recommendations of the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" (SORP). A statement of total return is presented above which combines the revenue account and the statement of realised and unrealised capital gains to give a "total return". A separate revenue account is therefore not required. 2. All expenses are charged to the revenue account with the exception of management fees and interest charges on borrowings, one half of which, less the appropriate tax, are charged to capital. 3. The return per ordinary share is based upon the following figures: 30 Sept 30 Sept 31 March 2002 2001 2002 Revenue return £36,668 £44,914 £65,961 Capital return £(545,230) £(177,892) £(6,099) Weighted average number of ordinary shares in 1,382,459 1,396,467 1,396,787 issue during the period - basic Weighted average number of ordinary shares in 1,382,791 1,407,755 1,399,157 issue during the period - diluted 4.During the first half of the year the Company purchased 25,000 of its own shares, which were then cancelled. An amount equal to the nominal value of the cancelled shares has been transferred to Capital Redemption Reserve. At 1 April 2002, the Company had 266,880 warrants in issue. Each warrant confers the right, exercisable normally on 31 July in any of the years from 2002 to 2010 inclusive, to subscribe for one new ordinary share at a price of £1.00 per share. On 31 July 2002, 480 warrants were exercised and 480 ordinary shares were issued. 266,400 warrants remain in issue. Net asset dilution arises from the potential exercise of outstanding warrants and is assumed only to take place if the net assets exceed the exercise price of £1.00. 5.The figures and financial information for the year ended 31 March 2002 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for the period. Those accounts have been delivered to the Registrar of Companies and include the report of the auditors which was unqualified and did not contain a statement either under section 237(2) or 237(3) of the Companies Act 1985. Portfolio Information Top 10 Holdings At 30 September 2002 Valuation % of Total Portfolio Equities 7,760 Credit Lyonnais Ordinary NPV Shares £159,633 7.8 16,000 Alliance & Leicester Ordinary 50p Shares £125,040 6.1 17,500 Abbey National Ordinary 10p Shares £90,125 4.4 10,600 Irish Life & Permanent Ordinary Eur0.32 Shares £76,585 3.7 3,166 BNP Paribas Eur1 Shares £65,674 3.2 Other £504,608 24.5 £1,021,665 49.7 Debt Securities £80,000 First Active 11 *% Subordinated Bonds £135,900 6.6 £100,000 BUPA Finance 10 *% Subordinated Bonds 2018 £123,125 6.0 £60,000 Skipton Building Society 12 7/8% PIBS £113,438 5.5 £55,500 Coventry Building Society 12 1/8% PIBS £99,519 4.8 £85,000 NPI 9 5/8% Subordinated Bonds £91,906 4.5 Other £472,035 22.9 £1,035,923 50.3 £2,057,588 100.0 (PIBS * Permanent Interest Bearing Shares) Company Information Directors Investment Manager Philip Court (Chairman) Blue Planet Investment Management Ltd Victoria W Killay Greenside House Kenneth C Murray 25 Greenside Place Edinburgh EH1 3AA Telephone No: 0131 466 6666 Facsimile No: 0131 446 6677 Email: info@blueplanet.ac www.blueplanet.ac Secretary and Registered Office Registrars Blue Planet Investment Management Ltd Northern Registrars Greenside House Northern House 25 Greenside Place Woodsome Park Edinburgh EH1 3AA Fenay Bridge Telephone No: 0131 466 6666 Huddersfield HD8 0LA Facsimile No: 0131 446 6677 Email: info@blueplanet.ac Shareholder Helpline No: 01484 600900 www.blueplanet.ac Email: shareholder.services@northernregistrars.co.uk www.northernregistrars.co.uk Auditors Registered Numbers Deloitte & Touche Registered in Scotland Edinburgh No. 1 Trust No. SC162796 No. 2 Trust No. SC162797 No. 3 Trust No. SC162798 No. 4 Trust No. SC162799 No. 5 Trust No. SC162800 No. 6 Trust No. SC162801 No. 7 Trust No. SC162802 No. 8 Trust No. SC162803 No. 9 Trust No. SC162804 No. 10 Trust No. SC162805 Bankers Custodians Lloyds TSB Scotland Plc The Royal Bank of Scotland Henry Duncan House Trust Company (I.O.M.) Ltd 120 George Street Royal Bank House Edinburgh EH2 4LH 2 Victoria Street Douglas Isle of Man IM99 1NJ Blue Planet Investment Management Ltd is regulated by the FSA. End

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