Final Results

Finsbury Growth & Income Trust PLC 06 December 2004 6 December 2004 Finsbury Growth & Income Trust PLC Finsbury Growth & Income Trust PLC today announces preliminary results for the year ended 30 September 2004. 30 September 30 September Change 2004 2003 Share price (capital return) 199.5p 149.5p +33.4% Share price (total return)* +37.4% +24.0% n/a Net Asset Value per share (total return)* +26.0% +16.9% n/a FTSE All-Share Index (total return)* (company benchmark) +15.7% +16.7% n/a Net Asset Value per share (capital return) 203.5p 165.8p +22.7% Discount 2.0% 9.8% n/a Shareholders' Funds £74.2m £64.4m +15.2% Market Capitalisation £72.8m £58.1m +25.3% Dividends 1.8p 1.8p - Interim paid 4.1p 3.2p +28.1% Final proposed/paid 5.9p 5.0p +18.0% Total *source: AITC Chairman, Michael Reeve, commented: • A most successful year • 18% Increase in dividend over the year • 33.4% Increase in share price over the year • 10.3% NAV out-performance against the FTSE All-Share Index • 7.8% Reduction in discount to 2.0% as at 30 September 2004 For and on behalf of Close Finsbury Asset Management Limited - Company Secretary - ENDS - The following are attached: • Chairman's Statement • Consolidated Statement of Total Return • Consolidated Balance Sheets • Consolidated Cash Flow Statement • Notes to the Preliminary Results For further information please contact: Alastair Smith, Close Finsbury Asset Management Limited 020 7426 6240 Tracey Lago, Close Finsbury Asset Management Limited 020 7426 6219 Jo Stonier, Quill Communications 020 7763 6976 Michael Reeve, Chairman 020 7602 2624 Nick Train, Lindsell Train Limited 020 7225 6411 Chairman's Statement The year under review has been a busy and most successful one for your Company which at the time of writing is the best performing investment trust over the last twelve month period in its sector of UK Growth and Income Investment Trusts. At the Extraordinary General Meeting in May 2004 shareholders approved a change of name of the Company and a change in investment objective designed to give greater emphasis to the income component of total return. The Board also announced an active discount management policy whereby it would buy back the Company's shares at a discount of 5% to net asset value, retain such shares in treasury, to the maximum permitted by law, and reissue them at a discount to the prevailing net asset value per share provided that discount was less than the discount at which the shares were bought back by the Company. Your Company was the first investment trust to issue shares out of treasury and by September the Board had issued all such shares which shareholders had empowered it to issue; indeed had it been enabled to do so, it could have issued many more. Therefore a further EGM was convened in October at which shareholders empowered the Board to continue to operate this discount management policy by renewing the Board's power to buy-back up to 14.99% of the issued share capital and to issue in accordance with that policy up to 10% of such shares repurchased. Since then 360,000 shares have been issued from those held in treasury. As at 1 December 2004, the Company held 1,612,178 Ordinary shares in treasury for issue into the market or cancellation at a future date. The effect of the above changes together with the excellent investment performance resulted in an increase of 33.4% in the market price of your shares at 30 September 2004 compared with a year earlier and since that date it has increased by a further 5.3% as at 1 December 2004. The discount to net asset value at which your shares trade reduced from 15.1% and 9.8% at 30 September 2002 and 2003 respectively, to 2.0% at 30 September 2004. The net asset value total return produced by your Company's investment portfolio was 26.0%, which compares to the total return produced by the FTSE All Share Index of 15.7%. This represents an outperformance of 10.3%. Revenue Return and Dividend The revenue return per share rose to 6.12p compared with 5.04p in the previous year. As already foreshadowed your Board is recommending a final dividend of 4.1p per share (2003: 3.2p per share) to be paid on 26 January 2005 to shareholders on the register on 17 December 2004. The final dividend, together with the interim dividend already paid of 1.8p per share, makes a total distribution of 5.9p per share (2003: 5.0p per share). At the time of the EGM held in May 2004 the Board confirmed its intention to move to a dividend target of over 8.0p per share in the current financial year. Statement of Total Return The statement of total return is set out on page 26 of the Annual Report. The total return for the year was 43.39p per share (2003: 24.05p) made up of a revenue return of 6.12p per share (2003: 5.04p) and a capital return of 37.27p (2003: 19.01p). Chairman's Statement (continued) Investments The valuation of investments at 30 September 2004 was £90,539,000 (2003: £73,380,000). The net asset value per share at the year end was 203.5p (2003: 165.8p). The investment portfolio, an analysis of which is set out on page 9 of the Annual Report, remains a concentrated one with 28 investments. The weightings against the FTSE All Share Index remain similar to that last year with the exception of the non-cyclical consumer goods at 15.3%, compared to 6.2% last year. This increase is largely accounted for by the bid for Glenmorangie which resulted in the Company's investment increasing by more than twice its cost. Shareholders will recall that in order to implement the change in investment objective to give greater emphasis on the income component of total return, a modest realignment of the portfolio was planned by increasing the Company's investment in the preference share market from approximately 7% to a level up to 20% of the portfolio. By 30 September 2004 this realignment had been partially accomplished. At that date approximately 11.8% of the portfolio was invested in fixed income securities. Borrowings As part of the change in investment objective your Board decided to increase gearing up to 20% of assets. In addition to an existing uncommitted £5m facility, it accordingly arranged an increase from £15m to £20m in the revolving credit facility for a fixed term expiring in December 2008. At 30 September 2004 £15.25m was drawn down under this facility which is subject to a variable rate of interest but which is capable of being fixed at any time. Purchases and sale of shares Since 30 September 2003 your Company has bought back 4,295,000 shares of which 400,000 have been cancelled and 3,895,000 have been held in treasury. Of the latter 2,282,822 have been re-issued to the date of writing. Resolutions will be put forward at the Annual General Meeting to empower your Company to acquire up to 14.99% of its issued share capital of which 10% may be retained in treasury and be available for re-issue as demand arises. Outlook Your Board believes that the changes which it has initiated and the investment strategy adopted by our investment adviser will continue to increase shareholder value and enable your Company to grow organically thus increasing the liquidity in your shares and reducing the cost ratio. With this in mind your Board fully intends to utilise powers granted to it by shareholders to issue shares as demand arises. If such powers are exhausted by such demand then further EGMs will be convened to update them as has been necessary in the year under review. Chairman's Statement (continued) Annual General Meeting The Annual General Meeting of the Company will be held at 10 Crown Place, London EC2A 4FT on Wednesday, 19 January 2005 at 12 noon. I very much hope that as many shareholders as are able will attend as it is the one definite opportunity in the year for shareholders, the Board and our advisers to exchange views. Nick Train, of our investment adviser Lindsell Train Limited, will make a presentation after the meeting. Light refreshments will be served thereafter. Michael Reeve Chairman 6 December 2004 Consolidated Statement of Total Return for the year ended 30 September 2004 ---------------- -------- --- -------- --- -------- --- ------ --- ------ --- ------- Revenue Capital Total Revenue Capital Total 2004 2004 2004 2003 2003 2003 £'000 £'000 £'000 £'000 £'000 £'000 ---------------- -------- -------- -------- ------- ------- ------- Gains on investments - 14,617 14,617 - 7,892 7,892 Exchange losses on currency balances - - - - (1) (1) Income (note 2) 3,283 - 3,283 2,654 - 2,654 Investment management fee (note 3) (163) (332) (495) (134) (271) (405) Other expenses (631) - (631) (449) - (449) -------- -------- -------- ------ ------ ------- Net return before finance costs and taxation 2,489 14,285 16,774 2,071 7,620 9,691 Interest payable and similar charges (212) (430) (642) (114) (231) (345) -------- -------- -------- ------ ------ ------- Return on ordinary activities before taxation 2,277 13,855 16,132 1,957 7,389 9,346 Taxation on - - - - - - ordinary -------- -------- -------- ------ ------ ------- activities Return on ordinary activities after taxation for the financial year 2,277 13,855 16,132 1,957 7,389 9,346 Dividends in respect of equity shares (2,132) - (2,132) (1,942) - (1,942) ---------------- -------- -------- -------- ------ ------ ------- Transfer to reserves 145 13,855 14,000 15 7,389 7,404 ---------------- -------- -------- -------- ------ ------ ------- ---------------- -------- -------- -------- ------ ------ ------- Return per share 6.12p 37.27p 43.39p 5.04p 19.01p 24.05p (note 4) ---------------- -------- -------- -------- ------ ------ ------- The revenue column of this statement is the profit and loss account of the Group. Balance Sheet of the Group and of the Company as at 30 September 2004 Group Group Company Company 2004 2003 2004 2003 £'000 £'000 £'000 £'000 -------------------- --------- ------- -------- -------- Fixed asset investments Investment in subsidiary undertaking - - 645 645 Financial investments 90,539 73,380 90,539 73,380 -------------------- --------- ------- -------- -------- 90,539 73,380 91,184 74,025 Current assets Debtors 530 355 530 355 Cash at bank 251 985 251 982 -------------------- --------- ------- -------- -------- 781 1,340 781 1,337 Creditors Amounts falling due within one year (17,090) (10,312) (17,735) (10,954) -------------------- --------- ------- -------- -------- Net current liabilities (16,309) (8,972) (16,954) (9,617) -------------------- --------- ------- -------- -------- Net assets 74,230 64,408 74,230 64,408 -------------------- --------- ------- -------- -------- Capital and reserves Called up share capital 9,614 9,714 9,614 9,714 Other reserves: Share premium 121 - 121 - Special reserve 12,424 13,160 12,424 13,160 Capital redemption reserve 3,453 3,353 3,453 3,353 Capital reserve - realised 34,159 38,473 34,159 38,473 Capital reserve - unrealised 12,647 (1,959) 13,292 (1,314) Revenue reserve 1,812 1,667 1,167 1,022 -------------------- --------- ------- -------- -------- Equity shareholders' funds 74,230 64,408 74,230 64,408 -------------------- --------- ------- -------- -------- Net asset value per share 203.5p 165.8p 203.5p 165.8p -------------------- --------- ------- -------- -------- Consolidated Cash Flow Statement for the year ended 30 September 2004 2004 2003 £'000 £'000 ----------------------------- --------- -------- Net cash inflow from operating activities 1,952 1,927 Servicing of finance Bank overdraft and loan interest paid (577) (355) Taxation Taxation recovered - - Financial investment Purchases of investments (10,169) (7,938) Sales of investments 7,567 9,581 ----------------------------- --------- -------- Net cash (outflow)/inflow from financial investment (2,602) 1,643 Equity dividends paid (1,879) (1,690) ----------------------------- --------- -------- Net cash (outflow)/inflow before financing (3,106) 1,525 Financing Repurchase and cancellation of own shares (736) - Shares purchased and held in Treasury (7,013) - Treasury shares sold 3,571 - Drawdown/(repayment) of loans 6,550 (766) ----------------------------- --------- -------- Net cash inflow/(outflow) from financing 2,372 (766) ----------------------------- --------- -------- (Decrease)/increase in cash (734) 759 ----------------------------- --------- -------- Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash resulting from cashflows (734) 759 (Increase)/decrease in debt (6,550) 766 Exchange movements - (1) ----------------------------- --------- -------- Movement in net (debt)/funds (7,284) 1,524 Net debt at 1 October (7,715) (9,239) ----------------------------- --------- -------- Net debt at 30 September (14,999) (7,715) ----------------------------- --------- -------- Notes 1 Revenue Account The revenue columns of the Statement of Total Return represent the revenue accounts of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations have been acquired or discontinued during the year. 2 Income 2004 2003 £'000 £'000 Income from UK listed investments Franked investment income 3,214 2,627 Unfranked investment income 51 7 -------- ------- 3,265 2,634 -------- ------- Other income Bank interest receivable 18 17 Other income - 3 -------- ------- 18 20 -------- ------- Total Income 3,283 2,654 -------- ------- Total income comprises: Dividends 3,214 2,627 Interest from fixed interest securities 51 7 Bank interest 18 17 Other - 3 -------- ------- 3,283 2,654 -------- ------- 3 Investment Management Fees Revenue Capital Total Revenue Capital Total 2004 2004 2004 2003 2003 2003 £'000 £'000 £'000 £'000 £'000 £'000 Investment management fees 138 283 421 114 231 345 Irrecoverable VAT thereon 25 49 74 20 40 60 -------- ------- ------- -------- -------- ------- 163 332 495 134 271 405 -------- ------- ------- -------- -------- ------- 4 Return per share Revenue return per share is based on £2,277,000 (2003: £1,957,000) net revenue on ordinary activities after taxation, and on the weighted average number of shares in issue during the year, and for this purpose, shares held in treasury are treated as not being in issue, of 37,177,663 (2003: 38,856,430). Capital return per share is based on net capital return for the financial year of £13,855,000 (2003: £7,389,000) and on the weighted average number of shares in issue during the year of 37,177,633 (2003: 38,856,430). 5 Comparative information This preliminary statement is not the Company's statutory accounts. The above results for the year ended 30 September 2004 have been agreed with the Auditors and are an abridged version of the Company's full draft accounts, which have not yet been approved, audited or filed with the Registrar of Companies. They have been prepared using the same accounting policies as those adopted in the financial statements for the year ended 30 September 2003. The statutory accounts for the year ended 30 September 2003 have been delivered to the Registrar of Companies and those for 30 September 2004 will be despatched to shareholders shortly. The statutory accounts for the year ended 30 September 2003 received an audit report which was unqualified and did not contain statements under Section 237 (2) and (3) of the Companies Act 1985. Close Finsbury Asset Management Limited Company Secretary 6 December 2004 This information is provided by RNS The company news service from the London Stock Exchange

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