Final Results

RNS Number : 6576B

Rights and Issues Inv Trust PLC

22 February 2011

 



RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CHAIRMAN'S STATEMENT

After the rapid contraction of 2008-9, the UK economy managed to pull out of recession in 2010. More importantly, strong growth in the world economy has led to a resurgence in international trade benefiting export-orientated companies.

The stock market had a quieter year with a rise of 12.1% in the FTSE All-share Index with a slightly better performance by smaller cap indices.

Your Trust experienced a strong finish to the year. The net asset value of capital shares rose from 2158.5p to 3105.7p and that of the income shares from 549.3p to 752.9p. These are increases of 43.9% and 37.1% respectively.

Discretionary Unit Fund Managers achieved modest progress with pre-tax profits of over £200,000. Again there was a major contribution from stock profits which will not necessarily be repeated.

After the difficult circumstances of the last two years, your Directors have been able to maintain dividends at 25.5p per income share and 1.275p per capital share. Additionally, the supplementary capital dividend of 68.6829p per capital share was paid on 2nd January, 2011 and barring unforeseen circumstances, will be maintained at 68.6829p per capital share payable on 2nd January, 2012.

In accordance with the established practice, your Directors have reviewed the performance of the Trust over the last five years: The performance of shareholders funds shows a rise of 4.4% compared with a rise of 8.7% by the FTSE All-share index. In addition, the dividend of the income shares has not matched inflation. For the first time the Trust has not met its criteria during a five year period but the circumstances of the world banking crisis fully explains why this happened. Taking this into account as well as the long-term performance of the Trust, your Directors therefore recommend that the life of the Trust should be extended by a further five years. It is also intended to modify the income criterion to maintain the income dividend over the period. This change reflects recent experience and the unique income demands of the respective class rights of the Trust.

Lastly, this is my first statement as Chairman and I would like to thank my predecessor, Simon Knott, for his contribution over the last three decades. During his time as chairman, shareholders funds rose from £3m to £70m and the Trust is in a strong position to meet the challenges of the future.

D. M. BRAMWELL

Chairman

You can view or download copies of the Half Year and Annual reports from our website at www.rightsandissues.co.uk.

They are to be posted to shareholders and are available at the registered office of the Company.

Risks and uncertainties

Cautionary statement

This report contains forward-looking statements that involve risk and uncertainty. These have been made by the directors in good faith based on the information available to them at the time of their approval of this report. Due to the inherent uncertainties, including stock market risk factor, actual results may differ materially from those expressed or implied by these forward-looking statements.

Further information on the principal long-term risks and uncertainties of the Trust is included in the annual report.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and accounts in accordance with applicable United Kingdom law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

The Directors are required to prepare the accounts for each financial year which present fairly the financial position of the Group and the financial performance and cashflows of the Company and the Group for that period. In preparing those Accounts the Directors are required to:

·	select suitable accounting policies and then apply them consistently;
·	make judgements and estimates that are reasonable and prudent;
·	present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
·	provide additional disclosures when compliance with the specific requirements of IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the group's financial position and financial performance;
·	state that the Company has complied with IFRS subject to any material departures disclosed and explained in the accounts; and
·	prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the Accounts comply with the Companies Act 2006 and Article 4 of the IAS regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and the Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Visitors to the website need to be aware that legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors confirm that to the best of their knowledge that:

·	the accounts, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group; and

·	the annual report includes a fair review of the development and performance of the business and the position of the company, together with a description of the principal risks and uncertainties that they face.

D. M. Bramwell, Director

S. J. B. Knott, Director

22nd February, 2011

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CONSOLIDATED INCOME STATEMENT

for the year ended 31st December, 2010

			Year ended 31st December, 2010						Year ended 31st December, 2009
	Notes		Revenue		Capital		Total		Revenue		Capital		Total
			£		£		£		£		£		£
Investment income	2		1,724,112		-		1,724,112		1,337,008		-		1,337,008
Other operating income	2		256,115		-		256,115		238,092		-		238,092
Total income			1,980,227		-		1,980,227		1,575,100		-		1,575,100
Gains/(Losses) on fair value
through profit or loss assets	10		159,456		20,721,113		20,880,569		88,079		11,299,776		11,387,855
			2,139,683		20,721,113		22,860,796		1,663,179		11,299,776		12,962,955
Expenses
Investment management fee			-		-		-		-		-		-
Other expenses	3		531,960		-		531,960		502,147		-		502,147
			531,960		-		531,960		502,147		-		502,147
Profit before tax			1,607,723		20,721,113		22,328,836		1,161,032		11,299,776		12,460,808
Tax	5		-		-		-		-		-		-
Profit for the period			1,607,723		20,721,113		22,328,836		1,161,032		11,299,776		12,460,808
Earnings per share
Return per income share (p)	7		18.5p		210.6p		229.1p		0.9p		114.8p		115.7p
Return per capital share (p)	7		69.6p		947.6p		1017.2p		68.7p		516.8p		585.5p

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the parent company. There are no minority interests.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CONSOLIDATED BALANCE SHEET

as at 31st December, 2010

						Company				Group
		Notes		2010		2009		2010		2009
				£		£		£		£
Non-current assets
Goodwill		8		-		-		65,191		65,191
Investments - Fair value through
profit or loss		10		62,861,280		44,425,529		62,429,808		43,994,057
				62,861,280		44,425,529		62,494,999		44,059,248
Current assets
Trading investments				-		-		650,233		498,578
Trade and other receivables		14		310,904		238,011		400,967		244,640
Current tax receivable				49,610		29,291		-		-
Amounts due from group undertakings				1,191,706		949,329		-		-
Cash and cash equivalents				5,433,124		3,630,674		6,386,189		4,470,403
				6,985,344		4,847,305		7,437,389		5,213,621
Total assets				69,846,624		49,272,834		69,932,388		49,272,869
Current liabilities
Trade and other payables		15		71,159		40,595		278,019		161,726
Current tax payable				-		-		-		-
				71,159		40,595		278,019		161,726
Total assets less current liabilities				69,775,465		49,232,239		69,654,369		49,111,143
Net assets				69,775,465		49,232,239		69,654,369		49,111,143
Equity
Called up share capital		16		1,225,000		1,225,000		1,225,000		1,225,000
Share premium account		17		225,326		225,326		225,326		225,326
Retained reserves:
Capital reserve		17		39,952,082		37,150,280		39,952,082		37,150,280
Revaluation reserve		17		27,136,454		9,217,143		27,136,454		9,217,143
Dividend equalisation reserve		17		1,236,603		1,414,490		1,115,507		1,293,394
Total equity				69,775,465		49,232,239		69,654,369		49,111,143
Net asset value per share
Income shares								752.9p		549.3p
Capital shares								3105.7p		2158.5p

The financial statements were approved by the board and authorised for issue on 22nd February 2011. They were signed on its behalf by:

D.M.Bramwell, Director

S. J. B. Knott, Director

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31st December, 2010

				Share						Dividend
		Share		premium		Capital		Revaluation		equalisation
		capital		account		reserve		reserve		reserve		Total
		£		£		£		£		£		£
Balance at 31st December, 2008		1,225,000		225,326		40,751,585		(5,683,938)		1,924,122		38,442,095
Changes in equity for 2009
Profit/(Loss) for the period		-		-		(3,601,305)		14,901,081		1,161,032		12,460,808
Total recognised income and expense		1,225,000		225,326		37,150,280		9,217,143		3,085,154		50,902,903
Dividends		-		-		-		-		(1,791,760)		(1,791,760)
Balance at 31st December, 2009		1,225,000		225,326		37,150,280		9,217,143		1,293,394		49,111,143
Changes in equity for 2010
Profit/(Loss) for the period		-		-		2,801,802		17,919,311		1,607,723		22,328,836
Total recognised income and expense		1,225,000		225,326		39,952,082		27,136,454		2,901,117		71,439,979
Dividends		-		-		-		-		(1,785,610)		(1,785,610)
Balance at 31st December, 2010		1,225,000		225,326		39,952,082		27,136,454		1,115,507		69,654,369

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 31st December, 2010

				Share						Dividend
		Share		premium		Capital		Revaluation		equalisation
		capital		account		reserve		reserve		reserve		Total
		£		£		£		£		£		£
Balance at 31st December, 2008		1,225,000		225,326		40,751,585		(5,683,938)		2,045,218		38,563,191
Changes in equity for 2009
Profit for the period		-		-		(3,601,305)		14,901,081		1,161,032		12,460,808
Total recognised income and expense		1,225,000		225,326		37,150,280		9,217,143		3,206,250		51,023,999
Dividends		-		-		-		-		(1,791,760)		(1,791,760)
Balance at 31st December, 2009		1,225,000		225,326		37,150,280		9,217,143		1,414,490		49,232,239
Changes in equity for 2010
Profit for the period		-		-		2,801,802		17,919,311		1,607,723		22,328,836
Total recognised income and expense		1,225,000		225,326		39,952,082		27,136,454		3,022,213		71,561,075
Dividends		-		-		-		-		(1,785,610)		(1,785,610)
Balance at 31st December, 2010		1,225,000		225,326		39,952,082		27,136,454		1,236,603		69,775,465

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

CASH FLOW STATEMENT

for the year ended 31st December, 2010

						Company				Group
				2010		2009		2010		2009
		Notes		£		£		£		£
Cashflows from operating activities
(Loss)/Profit before tax				22,279,226		12,431,517		22,328,836		12,460,808
Adjustments for:
Losses/(Gains) on investments				(20,721,113)		(11,299,776)		(20,721,113)		(11,299,776)
Purchases of investments				(5,426,717)		(5,202,296)		(5,426,717)		(5,202,296)
Proceeds on disposal of investments		19		7,712,079		7,490,291		7,712,079		7,490,291
Movement in trading investments		19		-		-		(151,655)		(78,972)
Operating cash flows before movements
in working capital				3,843,475		3,419,736		3,741,430		3,370,055
Decrease/(increase) in receivables				(315,270)		(198,355)		(156,327)		(33,087)
Increase/(decrease) in payables				30,564		(3,082)		116,293		(106,039)
Net cash from operating activities before income taxes				3,558,769		3,218,299		3,701,396		3,230,929
Income taxes received/(paid)				29,291		1,648		-		-
Net cash from operating activities				3,588,060		3,219,947		3,701,396		3,230,929
Cash flows from financing activities
Dividends paid				(1,785,610)		(1,791,760)		(1,785,610)		(1,791,760)
Net cash (used in)/from financing activities				(1,785,610)		(1,791,760)		(1,785,610)		(1,791,760)
Net increase/(decrease) in cash and cash equivalents				1,802,450		1,428,187		1,915,786		1,439,169
Cash and cash equivalents at beginning of year				3,630,674		2,202,487		4,470,403		3,031,234
Cash and cash equivalents at end of year				5,433,124		3,630,674		6,386,189		4,470,403

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

Notes:

1. The figures set out above are derived from the audited consolidated accounts of Rights and Issues Investment Trust Plc and its subsidiaries for the years ended 31 December 2009 and 31 December 2010. The 2010 accounts will be sent to shareholders shortly.

2. The financial information contained in this announcement does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The 2010 accounts, on which the report of the auditors is unqualified, will be filed with the Registrar of Companies in due course. The audited accounts for the year ended 31 December 2009 on which the report of the auditors contained no qualification or statement under either Section 498(2),(3)or (4) of the Companies Act 2006, have been filed with the Registrar of Companies.

3. DIVIDENDS AND OTHER APPROPRIATIONS

Amounts recognised as distributions to equity holders in the period:

		2010		2009		2010		2009
		p		p		£		£
Income
Final dividend for the year ended 31st December, 2009		17.00		17.00		418,200		418,200
Interim dividend for the year ended 31st December, 2010		8.50		8.50		209,100		209,100
Capital
Final dividend for the year ended 31st December, 2009		1.2750		1.6500		20,910		27,060
Supp cap dividend for the year ended 31st December, 2010		68.6829		68.6829		1,126,400		1,126,400
						1,774,610		1,780,760
Dividends on non-equity shares:
Cumulative preference		5.5%		5.5%		11,000		11,000

The Articles provide for a supplementary Dividend to Capital Shareholders to be paid not only in respect of future potential Preference Share issues which are not made, but also the 20,480,000 Preference Shares which could have been issued following the increases in the Capital Reserve revealed by the accounts since 1981.

		2010		2009		2010		2009
		p		p		£		£
Income
Proposed final dividend for the year ended 31st December, 2010		17.00		17.00		418,200		418,200
Capital
Proposed final dividend for the year ended 31st December, 2010		1.2750		1.2750		20,910		20,910

The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

RIGHTS AND ISSUES INVESTMENT TRUST PUBLIC LIMITED COMPANY

NOTES TO THE ACCOUNTS continued

for the year ended 31st December, 2010

3. DIVIDENDS AND OTHER APPROPRIATIONS (continued)

We also set out below the total dividend payable in respect of the financial year, which is the basis on which the requirements of Section 1158 Corporation Tax Act 2010 are considered.

		2010		2009		2010		2009
		p		p		£		£
Dividends on equity shares
Income
Interim dividend for the year ended 31st December, 2010		8.50		8.50		209,100		209,100
Proposed final dividend for the year ended 31st December, 2010		17.00		17.00		418,200		418,200
		25.50		25.50
Capital
Supp cap dividend for the year ended 31st December, 2010		68.6829		68.6829		1,126,400		1,126,400
Proposed final dividend for the year ended 31st December, 2010		1.2750		1.2750		20,910		20,910
		69.9579		69.9579		1,774,610		1,774,610

 

END

 

 

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