Final Results

Value & Income Trust plc 22 May 2006 VALUE AND INCOME TRUST PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2006 SUMMARY 31 March 2006 31 March 2005 (restated) Net asset value per share valuing debt at par 260.6p 213.7p Net asset value per share valuing debt at market value 226.9p 188.7p Ordinary share price 227.0p 181.0p Total interim dividend and proposed final dividend per share 6.4p 6.2p Total assets less current liabilities £156.8 million £134.4 million THE YEAR • VIT's share price total return for the year was +29.5% compared with the FTSE All-Share Index total return of +27.5% • VIT's share price total return over the last three years was +123.1% compared with the FTSE All-Share Index total return of +93.8% • Net dividend for the year is 6.4p, up 3.2% - the nineteenth consecutive year of increase Value and Income Trust invests in higher yielding, less fashionable areas of the UK commercial property and equity markets, particularly in medium and smaller sized companies. It aims for long-term real growth in dividends and capital values without undue risk. Outlook Despite the rise in property and equity markets, the outlook for real rents and dividend growth remains encouraging and Value and Income Trust is fully invested. Dividend The Directors are recommending a final dividend of 3.3p per Ordinary Share to be paid on 13 July 2006 to shareholders registered on 23 June 2006. The ex-dividend date is 21 June 2006. The Annual Report will be posted to shareholders at the end of May 2006. Copies can be obtained from Edinburgh Fund Managers plc, Donaldson House, 97 Haymarket Terrace, Edinburgh, EH12 5HD or OLIM Limited, Pollen House, 10-12 Cork Street, London, W1S 3NP. For further information, please contact:- Matthew Oakeshott or Angela Lascelles of OLIM Limited Tel: 0207-439-4400 VALUE AND INCOME TRUST PLC GROUP INCOME STATEMENT for the year ended 31 March 2006 Year ended Year ended 31 March 2006 31 March 2005 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 (Restated) (Restated) (Restated) Investment income Dividend income 3,577 - 3,577 3,388 - 3,388 Interest receivable from listed - - - 421 - 421 investments ________ ________ ________ ________ ________ ________ 3,577 - 3,577 3,809 - 3,809 ________ ________ ________ ________ ________ ________ Rental income 3,259 - - 3,116 - 3,116 Interest receivable on short 154 - - 133 - 133 term deposits Underwriting income - - - 1 - 1 ________ ________ ________ ________ ________ ________ Other operating income 3,413 - 3,413 3,250 - 3,250 ________ ________ ________ ________ ________ ________ Total income 6,990 - 6,990 7,059 - 7,059 Gains and losses on investments Realised gains on - 8,237 8,237 - 1,741 1,741 held-at-fair-value investments Unrealised gains on investments - 15,435 15,435 - 18,859 18,859 ________ ________ ________ ________ ________ ________ Total revenue 6,990 23,672 30,662 7,059 20,600 27,659 ________ ________ ________ ________ ________ ________ Expenses Investment management fees (335) (1,156) (1,491) (268) (1,084) (1,352) Other operating expenses (367) - (367) (364) - (364) Finance costs (3,501) - (3,501) (3,501) - (3,501) ________ ________ ________ ________ ________ ________ Total expenses (4,203) (1,156) (5,359) (4,133) (1,084) (5,217) ________ ________ ________ ________ ________ ________ Profit before tax 2,787 22,516 25,303 2,926 19,516 22,442 Taxation - (1,075) (1,075) - (724) (724) ________ ________ ________ ________ ________ ________ Profit for the period 2,787 21,441 24,228 2,926 18,792 21,718 ________ ________ ________ ________ ________ ________ Earnings per ordinary share 6.12 47.07 53.19 6.42 41.26 47.68 (pence) VALUE AND INCOME TRUST PLC COMPANY INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2006 Year ended Year ended 31 March 2006 31 March 2005 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 (Restated) (Restated) (Restated) Investment income Dividend income 3,590 - 3,590 3,388 - 3,388 Interest receivable from listed - - - 421 - 421 investments ________ ________ _______ ________ ________ ________ 3,590 - 3,590 3,809 - 3,809 ________ ________ _______ ________ ________ ________ Rental income 1,163 - 1,163 1,065 - 1,065 Interest receivable on short term 120 - 120 95 - 95 deposits ________ ________ _______ ________ ________ ________ Other operating income 1,283 - 1,283 1,160 - 1,160 ________ ________ _______ ________ ________ ________ Total income 4,873 - 4,873 4,969 - 4,969 Gains and losses on investments Realised gains on held-at-fair-value - 8,237 8,237 - 1,741 1,741 investments Unrealised gains/(losses) on - 14,385 14,385 - 18,163 18,163 investments ________ ________ _______ ________ ________ ________ Total revenue 4,873 22,622 27,495 4,969 19,904 24,873 ________ ________ _______ ________ ________ ________ Expenses Investment management fees (235) (923) (1,158) (187) (895) (1,082) Other operating expenses (267) - (267) (229) - (229) Finance costs (1,851) - (1,851) (1,851) - (1,851) ________ ________ _______ ________ ________ ________ Total expenses (2,353) (923) (3,276) (2,267) (895) (3,162) ________ ________ _______ ________ ________ ________ Profit before tax 2,520 21,699 24,219 2,702 19,009 21,711 Taxation 9 - 9 7 - 7 ________ ________ _______ ________ ________ ________ Profit for the period 2,529 21,699 24,228 2,709 19,009 21,718 ________ ________ _______ ________ ________ ________ Earnings per ordinary share 5.55 47.64 53.19 5.95 41.73 47.68 VALUE AND INCOME TRUST PLC BALANCE SHEET AT 31 MARCH 2006 GROUP COMPANY As at As at As at As at 31 March 2006 31 March 2005 31 March 2006 31 March 2005 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ASSETS (Restated) (Restated) (Restated) (Restated) Non current assets Investments held at fair 103,750 85,758 121,776 100,534 value through profit or loss Investment properties held 52,250 45,875 17,525 15,450 at fair value through profit or loss _______ _______ _____ _______ 156,000 131,633 139,301 115,984 Current assets Cash and cash equivalents 2,105 3,133 1,506 2,913 Other receivables 540 1,092 535 992 _______ _______ _____ _______ 2,645 4,225 2,041 3,905 _______ _______ _____ _______ TOTAL ASSETS 158,645 135,858 141,342 119,889 Current liabilities Other payables (1,827) (1,449) (2,165) (2,046) _______ _______ _____ _______ 156,818 134,409 139,177 117,843 Non-current liabilities Debenture stock (35,491) (35,515) (20,491) (20,515) Deferred tax (2,641) (1,566) - - _______ _______ _____ _______ (38,132) (37,081) (20,491) (20,515) _______ _______ _____ _______ 118,686 97,328 118,686 97,328 _______ _______ _____ _______ EQUITY Ordinary share capital 4,555 4,555 4,555 4,555 Share premium 18,446 18,446 18,446 18,446 Retained Earnings 95,685 74,327 95,685 74,327 _______ _______ _____ _______ 118,686 97,328 118,686 97,328 _______ _______ _____ _______ Net Asset Value per ordinary 260.56 213.67 260.56 213.67 share (pence) VALUE AND INCOME TRUST PLC STATEMENT OF CHANGES IN EQUITY FOR THE YEAR Group Year ended 31 March 2006 Year ended 31 March 2005 Share Share Retained Total Share Share Retained Total capital premium earnings capital premium earnings £000 £000 £000 £000 £000 £000 £000 £000 Net assets at 31 March 4,555 18,446 74,327 97,328 4,555 18,446 55,342 78,343 2005 Net profit for the year - - 24,228 24,228 - - 21,718 21,718 Dividends paid - - (2,870) (2,870) - - (2,733) (2,733) _________ ________ ________ ________ _________ ________ ________ ________ Net assets at 31 March 4,555 18,446 95,685 118,686 4,555 18,446 74,327 97,328 2006 _________ ________ ________ ________ _________ ________ ________ ________ Company Year ended 31 March 2006 Year ended 31 March 2005 Share Share Retained Total Share Share Retained Total capital premium earnings capital premium earnings £000 £000 £000 £000 £000 £000 £000 £000 Net assets at 31 March 4,555 18,446 74,327 97,328 4,555 18,446 55,342 78,343 2005 Net profit for the year - - 24,228 24,228 - - 21,718 21,718 Dividends paid - - (2,870) (2,870) - - (2,733) (2,733) _________ ________ ________ ________ _________ ________ ________ ________ Net assets at 31 March 4,555 18,446 95,685 118,686 4,555 18,446 74,327 97,328 2006 _________ ________ ________ ________ _________ ________ ________ ________ VALUE AND INCOME TRUST PLC GROUP STATEMENT OF CASH FLOWS for the year ended 31 March 2006 2006 2005 £000 £000 £000 £000 Cash flows from operating activities Dividend income received 4,008 4,001 Rental received 3,788 2,677 Interest received 161 124 Other income 1 Operating expenses paid (1,839) (1,725) ________ ________ NET CASH FROM OPERATING ACTIVITIES 6,118 5,078 Cash flows from investing activities Purchase of investments (22,490) (20,907) Sale of investments 21,739 21,307 ________ ________ NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES (751) 400 Cash flow from financing activities Interest paid (3,525) (3,525) Dividends paid (2,870) (2,733) ________ ________ NET CASH FROM FINANCING ACTIVITIES (6,395) (6,258) ________ ________ NET DECREASE IN CASH AND CASH EQUIVALENTS (1,028) (780) Cash and cash equivalents at 1 April 2005 3,133 3,913 ________ ________ Cash and cash equivalents at 31 March 2006 2,105 3,133 ________ ________ VALUE AND INCOME TRUST PLC COMPANY STATEMENT OF CASH FLOWS for the year ended 31 March 2006 2006 2005 £000 £000 £000 £000 Cash flows from operating activities Dividend income received 4,020 4,001 Rental received 1,398 900 Interest received 125 90 Operating expenses paid (1,454) (1,051) ________ ________ NET CASH FROM OPERATING ACTIVITIES 4,089 3,940 Cash flows from investing activities Purchase of investments (22,490) (18,657) Sale of investments 21,739 21,307 NET CASH (OUTFLOW)/INFLOW FROM ________ ________ INVESTING ACTIVITIES (751) 2,650 Cash flow from financing activities Interest paid (1,875) (1,875) Dividends paid (2,870) (2,733) ________ ________ NET CASH FROM FINANCING ACTIVITIES (4,745) (4,608) ________ ________ NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,407) 1,982 Cash and cash equivalents at 1 April 2005 2,913 931 ________ ________ Cash and cash equivalents at 31 March 2006 1,506 2,913 ________ ________ NOTES TO FINANCIAL STATEMENTS: 1 Accounting policies The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee (IASC) that remain in effect, and to the extent that they have been adopted by the European Union. These are the first financial statements prepared in accordance with IFRS. Previously the financial statements were prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP) including the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'. UK GAAP differs in certain respects from IFRS. When preparing the financial statements to 31 March 2006 the Directors have amended certain accounting and valuation methods applied in the UK GAAP financial statements to comply with IFRS. The disclosures required by IFRS 1 First-time Adoption of International Financial Reporting Standards (IFRS 1) concerning the transition from UK GAAP to IFRS are given in the full Report and Financial Statements. (a) Basis of preparation The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial assets. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the Association of Investment Trust Companies (AITC) in January 2003 (and revised in December 2005) is consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. (b) Basis of consolidation The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries). Control is achieved where the company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Audax Properties plc and VIT Securities Limited, both wholly owned subsidiaries of the Company, charge expenses wholly to income. On consolidation, however, an adjustment is made to charge 70% of the investment management fee paid by Audax Properties plc to capital. The allocation has no effect on the total return of the Company or the Group. (c) Presentation of income statement In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AITC, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In accordance with the company's status as a UK investment company under section 266 of the Companies Act 1985, net capital returns may not be distributed by way of dividend. Additionally the net revenue is the measure that the directors believe to be appropriate in assessing the company's compliance with certain requirements set out in section 842 of the Income and Corporation Taxes Act 1988. (d) Income Dividend income from investments is recognised as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the period end are treated as revenue for the period. Where the group has elected to receive dividend income in the form of additional shares rather than cash, the amount of cash dividend foregone is recognised as income. Any excess in the value of shares received over the amount of cash dividend foregone is recognised as a gain in the income statement. Interest receivable from cash and short term deposits and interest payable is accrued to the end of the period. Rental and other income is recognised as earned. (e) Expenses All expenses are accounted for on an accruals basis. Expenses are presented as capital where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect, the investment management fees are allocated 30% to revenue and 70% to capital to reflect the Board's expectations of long term investment returns. Any performance fees payable are allocated to capital, reflecting the fact that, although they are calculated on a total return basis, they are expected to be attributable largely to capital performance. It is normal practice for investment trust companies to allocate finance costs to capital on the same basis as the investment management fee allocation. However as the Company has a significant exposure to property, and property companies do not charge finance costs to capital, the directors consider it inappropriate to allocate finance costs to capital. (f) Taxation Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. Due to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. This is not the case for the subsidiary companies, and hence the group, where such provision is made, calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. (g) Dividends payable Interim dividends are recognised as a liability in the period in which they are paid as no further approval is required in respect of such dividends. Final dividends are recognised as a liability only after they have been approved by shareholders in general meeting. (h) Investments All investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are recognised at fair value through profit or loss. For listed investments, this is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange electronic trading service covering most of the market including all FTSE 100 constituents and most liquid FTSE 250 constituents along with some other securities. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the income statement and are ultimately recognised in the retained earnings. In respect of investment properties, fair value is established by half-yearly professional valuation on an open market basis by King Sturge and Co, Chartered Surveyors and Valuers and in accordance with the RICS Appraisal and Valuation Manual. (i) Cash and cash equivalents Cash and cash equivalents comprises deposits held with banks. (j) Non - current liabilities All loans and borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost. Amortised cost is calculated by taking into account any discount or premium on settlement. The costs of arranging any interest-bearing loans are capitalised and amortised over the life of the loan. 2. Restatement of opening balances Information for the year to 31 March 2005 is extracted from the financial statements for that year which were prepared under UK GAAP, have been filed with the Registrar of Companies and which contain an unqualified audit report. The historic information has been restated to conform to IFRS. 3. Proposed Final Dividend The final dividend of 3.3 pence per share, subject to shareholder approval at the Annual General Meeting, will be paid on 13 July 2006 to shareholders on the register at the close of business on 23 June 2006. The ex-dividend date is 21 June 2006. 4. Statutory Financial Statements The financial information contained within this preliminary announcement does not constitute the Company's statutory financial statements as defined in section 240 of the Companies Act 1985 for the years ended 31 March 2006 or 2005, but is derived from those financial statements. Statutory financial statements for 2005 have been delivered to the Registrar of Companies and those for 2006 will be delivered following the Company's Annual General Meeting which will be held at Donaldson House, 97 Haymarket Terrace, Edinburgh on Friday 7 July 2006 at 12.30 pm. The auditors report in respect of the year ended 31 March 2005 was unqualified and did not contain statements under s237(2) or (3) of the Companies Act 1985. The auditors have not yet reported on the financial statements to 31 March 2006.The financial statements and preliminary announcement were approved by the Board of directors on 22 May 2006. 5. Publication of Financial Statements The financial statements will be posted to shareholders in June 2006 and copies will be available from the Company Secretary and the Managers, OLIM Limited. For Value and Income Trust plc Edinburgh Fund Managers plc, Secretary 22 May 2006 This information is provided by RNS The company news service from the London Stock Exchange

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