Half Yearly Report

RNS Number : 6309T

Hansa Trust PLC

21 November 2013

 



HANSA TRUST PLC

Announcement of Half-Yearly Results

for the six months ended 30 September 2013

Hansa Trust PLC announces its Half-Yearly Results for the six months ended 30 September 2013.

Financial Highlights	Six months ended 30 September 2013 (Unaudited)	Year ended 31 March 2013 (Audited)
Net Asset Value - Total Return	0.5%	(1.8)%
Performance Benchmark	1.7%	3.8%
Capital return per equity share	(10.2)p	(36.7)p
Revenue return per equity share	15.3p	16.1p
Net asset value per equity share	1,076.5p	1,082.9p
Dividend per equity share	5.0p	14.0p
Total income (£000's)	4,923	6,193
Revenue before taxation (£000's)	3,686	3,886

An interim dividend of 5.0p per share (amounting to £1,200,000) is to be paid.

Ex-dividend date: 27 November 2013

Record date: 29 November 2013

Payment date: 16 December 2013

The following are attached:

·    Chairman's Statement

·    Condensed Group Income Statement

·    Condensed Statement of Changes in Equity

·    Condensed Group Balance Sheet

·    Condensed Group Cash Flow Statement

·    Notes

For further information please contact:

Stephen Thomas                       Hansa Capital Partners LLP                  020 7647 5750

CHAIRMAN'S STATEMENT

THE ASSET VALUE (AT 30 SEPTEMBER 2013)

NAV: 1076.5p per share (-6.4p; -0.6%)

Benchmark: +1.7%

Background to Markets:

The past six months have been a rather benign period for stock markets in the developed world but rather less so for those of emerging market countries, many of whose markets suffered from both declining share prices and particularly from falling currencies.  In fact a feature of the period was the strength of Sterling, which rose against the US Dollar, the Euro, the Japanese Yen and particularly against the Brazilian Real.

The lack of any horrific news on the European front led to European bourses performing rather better than other developed world stock markets as the table below suggests - more out of a sense of relief one suspects.  In any event developed world economies seem to be returning to growth mode, albeit at pretty slow rates - aided and abetted by continuing loose monetary and, in some countries, loose fiscal policies.  Stock markets, as we have mentioned before, tend to be driven by a mixture of confidence and money, both of which helped drive them higher.

	Currency (v.£)	Stock Market	Stock Market
	(v. £)	(local currency)	(in £s)
France (CAC)	-1.3%	+11.0%	+9.6%
Germany (DAX)	-1.3%	+10.3%	+8.8%
Japan (TOPIX)	-9.8%	+16.1%	+4.7%
UK (FTSE All Share)		+1.9%	+1.9%
USA (S&P 500)	-5.6%	+7.2%	+1.1%
China (Shanghai Comp)	-4.8%	-8.1%	-12.5%
Brazil (Bovespa)	-15.4%	-7.1%	-21.4%

Concern amongst international investors about the effect on emerging market economies of a normalisation of American monetary policy had an effect on their markets and their currencies generally and on the so called BRIC countries particularly; all four of them suffered declines when expressed in Sterling.  Most noticeably for us Brazil's BOVESPA Index (in £s) declined by 21.5%.  The news coming out of Brazil is not hugely encouraging at the moment, albeit the news from Ocean Wilsons (- c. 9%) is really quite good.

Against this background our own net asset value declined by only 0.6% and our two share prices (ordinary and A ordinary) declined by circa 5.5% and 4.5% respectively (more about which later).

The net asset value declined by 0.6% over the first six months - largely as a result of the dividend of 11.5p per share declared at the year end. The decline in the value of our holding in Ocean Wilsons, which reduced the net asset value by c. 35p per Hansa Trust share (see the table below) was more than offset by the improvement in value of the rest of the portfolio.  The rest of the portfolio made good progress, contributing c. 40p to the net asset value.  The holding in Ocean Wilsons apart, all of the top ten holdings made a positive contribution - with particularly good performances coming from our investments in Herald Investment Trust and Hansteen Holdings.

I should emphasise that we are never unduly concerned by the short term price movements of our holdings, which all too often bear little relationship with the underlying progress of the companies concerned.  Without wishing to sound complacent we are generally pleased with the progress being made by our investee companies, including, importantly, Ocean Wilsons.

Per Hansa Share:	31-Mar-13		30-Sep-13			Δ%
Ocean Wilsons holding:	405.3p		370.2p		-35.1p	-8.7%
Rest of Portfolio (incl. net current liabilities):	677.6p		717.8p		+40.2p	+5.9%
Dividend:			-11.5p		-11.5p	+2.1%
Net Asset Value per share:	1,082.9p		1,076.5p		-6.4p	-0.6%

We also place emphasis on our long-term performance - regarding five years as a minimum time period to make comparisons.  Since the 30^th September 2008 (shortly after the Lehman Brothers debacle) our net asset value has risen by 260.1p per share - albeit in a rather roller coaster manner given the volatility of the stock market - and we have paid out dividends of 77.5p, providing a total return of 335.6p or 41.1%.  That compares with a total return of our benchmark of 24.5%.

THE SHARE PRICES

Ordinary shares:                    790.5p (- 46.5p; - 5.6%)

"A" Ordinary shares:            779.0p (- 36.0p; - 4.4%)

The two share prices declined producing a slightly wider discount: 26.6% on the Ordinary shares and 27.6% on the A Ordinary shares.  As I indicated in the last annual report and as discussed at the Company's annual general meeting, we have embarked upon a programme designed to raise the awareness of Hansa Trust in the market place.  While we fully expect that raising our profile will, in time, create more demand for the Company's shares, it is not a short term-fix.  Meanwhile the poor perception of Brazil in the eyes of investors is, we believe, affecting the demand for our shares because of our large investment in Ocean Wilsons (circa 34% of our net asset value at the end of September 2013).

However, as many shareholders will be aware, the share price of Ocean Wilsons itself sells at a discount to its underlying book value, comprising the holding of 58.25% of Wilson Sons and its own wholly owned investment subsidiary, Ocean Wilson Investments.  That discount at the end of September amounted to 26.4%, which, when consolidated into our own net asset value, leaves our two shares - the Ordinary and the A Ordinary - selling on discounts of 34.6% and 35.6% respectively.

THE INTERIM DIVIDEND

The Board of Directors has declared an interim dividend of 5.0p per share to be paid on 16 December 2013 to shareholders on the Register of Members on 29 November 2013. In considering the interim dividend, the Board has taken into account the fact that - historically at least - most of the profit earned during the year has been earned in the first half. In order to even out the two payments, the Board has decided to declare a higher interim dividend of 5.0p (versus 3.5p last year). The dividend policy, however, remains unchanged - namely to pay out as dividends the profit earned in the year. It should not, therefore, be assumed that the total dividend for the current year will be more than was paid last year.

PROSPECTS

Once again John Alexander, our portfolio manager, has produced a detailed account of the portfolio and commentary on the state of those economic and financial affairs that are likely to affect us - so I won't go into great detail and repeat what he has written.

Our own prospects are in part influenced by the external financial environment, which is looking rather better than it has for quite some time and in part on ourselves and the portfolio that we look after.  It is certainly the case that, no matter how well our investee companies do, it will be hard for their share prices to rise (and thence our own net asset value) in an adversarial financial environment.  Given the commitments of governments to very loose monetary policies on a quite unprecedented scale (producing only quite modest economic growth) and the need to return to some form of financial integrity one day, it is hard to believe that the recovery won't hit a bump at some time.  The effect on the American economy of the shutdown of its Government for a very short space of time illustrates the point.  However given the overriding priority of most governments to get re-elected, the return to financial integrity may well be some way off.

Our portfolio's prospects of course depend on the progress of the companies in which we are invested.  Here John goes into quite some detail on our important investments - most particularly - on Ocean Wilsons.  The outlook for it continues, we believe, to be most promising benefiting as it does from excellent management and good commercial prospects.

It is also encouraging that a number of our other larger holdings in smaller companies are also doing well - particularly NCC Group, Herald Investment Trust, Kofax, Goals Soccer Centres, Hansteen Holdings and Galliford Try.

We, the Board of Directors, remain enthusiastic about the long-term prospects for our investee companies and thence the prospects for our own net asset value.  However we need to improve the awareness of the "Hansa story" in order to address the issue of the large discount at which our shares sell in relation to the underlying net asset value.  We have started that process, so that - hopefully - the combination of good portfolio returns and a declining discount on a long-term basis should produce good long-term returns for shareholders.

Alex Hammond-Chambers

Chairman

20 November 2013

CONSOLIDATED GROUP INCOME STATEMENT

for the six months ended 30 September 2013

	(Unaudited)			(Unaudited)			(Audited)
	Six months ended			Six months ended			Year ended
	30 September 2013			30 September 2012			31 March 2013
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£000	£000	£000	£000	£000	£000	£000	£000	£000
Investments
Losses on investments held at fair value	-	(2,460)	(2,460)	-	(27,736)	(27,736)	-	(8,809)	(8,809)
Exchange losses on currency balances	-	(1)	(1)	-	(6)	(6)	-	-	-
	-	(2,461)	(2,461)	-	(27,742)	(27,742)	-	(8,809)	(8,809)
Income
Investment income	4,923	-	4,923	4,428	-	4,428	6,193	-	6,193
	4,923	(2,461)	2,462	4,428	(27,742)	(23,314)	6,193	(8,809)	(2,616)
Expenses
Investment management fees	(824)	-	(824)	(737)	-	(737)	(1,512)	-	(1,512)
Other expenses	(394)	-	(394)	(364)	-	(364)	(753)	-	(753)
	(1,218)	-	(1,218)	(1,101)	-	(1,101)	(2,265)	-	(2,265)
Profit/(loss) before finance costs and taxation	3,705	(2,461)	1,244	3,327	(27,742)	(24,415)	3,928	(8,809)	(4,881)
Finance costs	(19)	-	(19)	(19)	-	(19)	(42)	-	(42)
Profit/(loss) before taxation	3,686	(2,461)	1,225	3,308	(27,742)	(24,434)	3,886	(8,809)	(4,923)
Taxation	(4)	-	(4)	(4)	-	(4)	(16)	-	(16)
Profit/(loss) for the period	3,682	(2,461)	1,221	3,304	(27,742)	(24,438)	3,870	(8,809)	(4,939)
Return per Ordinary and 'A'
non-voting Ordinary share	15.3p	(10.2)p	5.1p	13.8p	(115.6)p	(101.8)p	16.1p	(36.7)p	(20.6)p

The Company does not have any income or expense that is not included in the profit for the period. Accordingly the "Profit for the period" is also the "Total comprehensive income for the period", as defined in IAS 1 (revised) and no separate Statement of Comprehensive Income has been presented.

All of the profit and total comprehensive income for the period is attributable to the Company's shareholders.

The total column of the statement is the Income Statement of the Company prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.

The Statement above is regarded as being in a condensed form due to the fact that fewer explanatory notes are included than would be the case in the Annual Report.

Condensed Statement of Changes in Equity
for the six months ended 30 September 2013 (Unaudited)
	Share capital	Capital redemption reserve	Retained earnings	Total
	£000	£000	£000	£000
Net assets at 1 April 2013	1,200	300	258,408	259,908
Profit for the period	-	-	1,221	1,221
Dividends	-	-	(2,760)	(2,760)
Net assets at 30 September 2013	1,200	300	256,869	258,369
Condensed Statement of Changes in Equity
for the six months ended 30 September 2012 (Unaudited)
	Share capital	Capital redemption reserve	Retained earnings	Total
	£000	£000	£000	£000
Net assets at 1 April 2012	1,200	300	266,707	268,207
loss for the period	-	-	(24,438)	(24,438)
Dividends	-	-	(2,520)	(2,520)
Net assets at 30 September 2012	1,200	300	239,749	241,249
Condensed Statement of Changes in Equity
for the year ended 31 March 2013 (Audited)
	Share capital	Capital redemption reserve	Retained earnings	Total
	£000	£000	£000	£000
Net assets at 1 April 2012	1,200	300	266,707	268,207
loss for the period	-	-	(4,939)	(4,939)
Dividends	-	-	(3,360)	(3,360)
Net assets at 31 March 2013	1,200	300	258,408	259,908

The Statements above are regarded as being in a condensed form due to the fact that fewer explanatory notes are included than would be the case in the Annual Report.

CONSOLIDATED GROUP BALANCE SHEET

as at 30 September 2013
	(Unaudited)	(Unaudited)	(Audited)
	30 September	30 September	31 March
	2013	2012	2013
	£000	£000	£000
Non-current assets
Investments held at fair value through profit or loss	259,873	242,802	262,403
Current assets
Trade and other receivables	426	719	439
Cash and cash equivalents	1,701	594	126
	2,127	1,313	565
Current liabilities
Trade and other payables falling due within one year	(3,631)	(2,866)	(3,060)
Net current liabilities	(1,504)	(1,553)	(2,495)
Net assets	258,369	241,249	259,908
Capital and reserves
Called up share capital	1,200	1,200	1,200
Capital redemption reserve	300	300	300
Retained earnings	256,869	239,749	258,408
Total equity shareholders' funds	258,369	241,249	259,908
Net asset value per Ordinary and 'A' non-voting Ordinary share	1,076.5p	1,005.2p	1,082.9p

The Statement above is regarded as being in a condensed form due to the fact that fewer explanatory notes are included than would be the case in the Annual Report.

CONSOLIDATED GROUP CASHFLOW STATEMENT

for the six months ended 30 September 2013	(Unaudited)	(Unaudited)	(Audited)
	Six months	Six months	Year
	ended	ended	ended
	30 September	30 September	31 March
	2013	2012	2013
	£000	£000	£000
Cash flows from operating activities
Gain before finance costs and taxation	1,244	(24,415)	(4,881)
Adjustments for:
Realised losses on investments	2,772	2,121	2,121
Unrealised (gains)/losses on investments	(312)	25,615	6,688
Effect of foreign exchange rate changes	1	6	-
Decrease/(increase) in trade and other receivables	13	(425)	(145)
(Decrease)/increase in trade and
other payables	(29)	(22)	22
Taxes paid	(4)	(4)	(16)
Purchase of non‑current investments	(1,073)	(469)	(1,319)
Sale of non‑current investments	1,143	875	1,051
Net cash inflow from operating activities	3,755	3,282	3,521
Cash flows from financing activities
Interest paid on bank loans	(19)	(19)	(42)
Dividends paid	(2,760)	(2,520)	(3,360)
Repayment of loans	600	(280)	(130)
Net cash outflow from financing activities	(2,179)	(2,819)	(3,532)
Increase/(decrease) in cash and cash equivalents	1,576	463	(11)
Cash and cash equivalents at 1 April	126	137	137
Effect of foreign exchange rate changes	(1)	(6)	-
Cash and cash equivalents at end of period	1,701	594	126

The Statement above is regarded as being in a condensed form due to the fact that no explanatory notes are included as would be the case in the Annual Report.

Notes:

1. This Announcement is not the Company's Half-Yearly accounts. It is an abridged version of the Company's full Half-Yearly accounts for the six months ended 30 September 2013, which have not yet been approved or distributed to shareholders.

2. The full Half-Yearly accounts for the six months ended 30 September 2013 have been prepared in accordance with International Financial Reporting Standards ("IFRS") and using the same accounting policies as those in the last published annual accounts, being those to 31 March 2013.

3. Statutory accounts for the 12 months ended 31 March 2013 have been delivered to the Registrar of Companies and received an audit report which was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain statements under Section 498 of the Companies Act 2006.

Hansa Capital Partners LLP - Company Secretary

21 November 2013

 

END

 

 

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