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Invesco Inc Grth Tst (IVI)

  Print      Mail a friend       Annual reports

Friday 08 June, 2007

Invesco Inc Grth Tst

Final Results

                        INVESCO Income Growth Trust plc                        

              Unaudited Preliminary Announcement of Final Results              

                       for the Year Ended 31 March 2007                        

Chairman's Statement

During the twelve months to 31st March 2007, the UK stock market performed
strongly, producing the fourth successive year of double-digit March-to-March
returns. A robust economic performance provided a supportive backdrop, allowing
company profits to continue to grow. Stock markets have also been supported by
an acceleration in merger and acquisition activity.

The Board is pleased to note that the total return for the period (comprising
the movement in NAV plus net dividends reinvested) was 20.3%. This compares
favourably to a 11.2% return from the benchmark, the FTSE All-Share Index. It
is encouraging to achieve above benchmark returns in any one year but the Board
would remind shareholders that an important investment objective of the Company
is to achieve long-term capital growth. The porfolio is managed accordingly and
this may result in individual years where below benchmark returns are achieved,
whilst the Company's long-term capital growth objective is not compromised. The
Company has produced a total return of 62.9% over the 5 years to 31st March
2007, compared to a 51.2% return in the FTSE All-Share Index.

The mid-market price of the ordinary shares increased from 204.75p to 240.00p
during the year, while the discount to net asset value per ordinary share
continued to narrow, from 10.8% to 8.7%.


The Board continues to monitor the Company's level of gearing which, when
prudently used, should enhance the returns to shareholders. Since the
conversion of the CULS, a bank facility of £20m is available for the purpose of
providing gearing. As at 31 March 2007, the Company had gearing of 107,
provided by the bank borrowings of £11.7m.

It is envisaged that, depending on market conditions, the Company's effective
gearing would normally be in the range 100-120% of NAV. It is important to
stress that, prior to a significant change within this range by the investment
manager; permission is required from the Board.

Convertible Unsecured Loan Stock (`CULS')

During the year, the entire issue of £18,995,313 nominal amount of CULS was
converted into 11,653,561 ordinary shares of 25p each.

Share Buy-Backs

Between 1 April and 16 June 2006, 1,001,663 ordinary shares were repurchased
and held as treasury shares. On 20 September 2006, all shares held in treasury
were cancelled (a total of 1,493,663 shares, which included all ordinary shares
repurchased during the year ended 31 March 2006). From 20 September 2006 to the
year end, 5,933,586 ordinary shares were repurchased for cancellation.
Therefore, throughout the Company's financial year, 6,935,249 ordinary were

Since the year end, a further 175,000 ordinary shares have been repurchased for

Overall, the repurchase of ordinary shares over the year has helped to reduce
the diluted discount to net asset value from 10.8% to 8.7%.

Revenue and Dividends

This is the first year your Company has paid quarterly dividends to
shareholders. A first interim dividend of 1.50p per ordinary share was paid on
20 October 2006. Second and third interim dividends of 1.75p each were paid on
29 December 2006 and 16 March 2007 respectively. Your Board have proposed a
final dividend of 2.75p payable on 17 July 2007 to ordinary shareholders on the
register on 22 June 2007. This increases the dividend from 7.05p (including the
Special) last year to 7.75p this year, a change of +9.9%. In arriving at this
figure the Board has undertaken a review of the Company's revenue reserves and
the potential for future dividend growth in the UK equity market. The Board
believes that this level of dividend is one from which dividend growth can be
maintained over the longer term at least in line with inflation.

Corporate Governance

The Board remains committed to maintaining the highest standards of Corporate
Governance and is accountable to you as shareholders for the governance of the
Company's affairs.

The Directors believe that, during the period under review, they have complied
with the provisions of the AIC Code of Corporate Governance as endorsed by the
Financial Reporting Council, save in respect of matters discussed in the
Corporate Governance statement contained in the Annual Report and Accounts.

Annual General Meeting

At the AGM there are five items of Special Business to be proposed:-

Share Issuance

First your Directors are asking for the usual authority to issue up to an
aggregate nominal amount of £5,013,503 (a third of the Company's issued share
capital as at 8 June 2007) in new ordinary shares. This will allow Directors to
issue shares within the prescribed limits should any favourable opportunities
arise to the advantage of shareholders. The powers authorised will not be
exercised at a price below Net Asset Value so that the interests of existing
shareholders are not diluted. This authority will expire at the AGM in 2008.

Secondly, your Directors are also asking for the usual authority to issue new
ordinary shares pursuant to a rights issue or otherwise than in accordance with
a rights issue of up to an aggregate nominal amount of £1,499,675 (10% of the
Company's issued share capital as at 8 June 2007) of new ordinary shares
dis-applying pre-emption rights. This will allow shares to be issued to new
shareholders without having to be offered to existing shareholders first, thus
broadening the shareholder base of the Company. This authority will expire at
the AGM in 2008.

Share Buybacks

Thirdly, your Directors are seeking to renew the authority to buyback up to
8,992,056 (14.99% of the Company's issued share capital as at 8 June 2007)
subject to the restrictions referred to in the notice of the AGM. This
authority will expire at the AGM in 2008.

Your Directors are proposing that shares bought back by the Company either be
cancelled or alternatively, be held as treasury shares with a view to their
resale if appropriate, or later cancellation. The holding of treasury shares is
restricted to 10% of the Company's issued share capital and any resale of them
will only take place on terms that are in the best interests of shareholders.

Electronic Communications and Amendments to the Articles of Association

Fourthly, your Directors are seeking general authority from shareholders to
send or supply documents, notices and other information to shareholders in
electronic form (e.g. by e-mail) or by means of publication on a website, in
accordance with provisions in the Companies Act 2006 (the "2006 Act") regarding
electronic communications with shareholders which became effective on 20
January 2007.

In particular, the passing of this resolution will allow the Company, subject
to the 2006 Act, to treat a shareholder as having consented to the supply of
notices, documents or information by publication on a website where such
shareholder has been asked individually by the Company to agree to the supply
of notices, documents or information in this manner and has not responded
within 28 days from when such request was sent.

Any shareholder may, if he or she wishes, continue to receive all
communications from the Company in hard copy form. Moreover, a shareholder may,
in relation to a particular communication, request a hard copy form of that
communication or, at any time, revoke his or her general agreement to
electronic communications by giving notice to the Company.

This resolution also seeks approval for the existing Articles of Association of
the Company to be updated with corresponding electronic communication
provisions and certain other minor technical amendments in accordance with
those provisions of the 2006 Act currently in force.

Shareholders should note that the terms of the new Articles of Association with
all the proposed changes highlighted are available for inspection on at 30
Finsbury Square, London. EC2A 1AG from 8 June 2007 until the close of the AGM
on 12 June 2007.

As the Government intends to bring into force the provisions of the 2006 Act in
various stages until October 2008, it is anticipated that shareholders may be
asked to approve further changes to the Articles of Association as may be
necessary at the next two AGMs of the Company.

Directors' Fees and Amendments to the Articles of Association

Finally, your Directors are proposing to amend the Articles of Association to
increase the aggregate fees that the Company can pay to Directors for their
services from £100,000 to £175,000 per annum. There are presently four
Directors on the Board. The proposed change will provide the Board with enough
headroom to appoint additional Directors should it be appropriate to do so and
any fee increases in line with inflation or as may be necessary in light of
increasing demands and accountability of the Corporate Governance and
Regulatory environment.

Your Directors have carefully considered all the resolutions proposed in the
Notice to the AGM and in their opinion, consider them all to be in the best
interests of shareholders as a whole. Your Directors therefore recommend that
shareholders vote in favour of each resolution.

The AGM of the Company will be held at the offices of INVESCO Asset Management
Limited on 12 July 2007 at 12.00noon. I do hope that as many shareholders as
possible will attend. This will be an opportunity not only to meet the
Directors but also to hear the views of Ciaran Mallon, who is the investment
manager at Invesco Perpetual with the day-to-day responsibility for managing
the Company's share portfolio.

John J. McLachlan


8 June 2007

Income Statement

for the year ended 31 March

                               2007 (Unaudited)              2006        
                  Revenue   Capital       Total Revenue   Capital   Total
                  £'000       £'000       £'000   £'000     £'000   £'000
Gains on                -    21,412      21,412       -    28,053  28,053
at fair value                                                            
profit or loss                                                           
Income              5,789       312       6,101   5,222         -   5,222
Investment          (604)     (604)     (1,208)   (551)     (551) (1,102)
management fee                                                           
Other expenses      (237)       (4)       (241)   (220)       (2)   (222)
Profit before                                                            
costs and           4,948    21,116      26,064   4,451    27,500  31,951
Finance costs       (350)     (350)       (700)   (511)     (511) (1,022)
Profit on           4,598    20,766      25,364   3,940    26,989  30,929
activities before                                                        
after tax                                                                
Return per                                                               
ordinary share                                                           
 - basic             8.1p     36.9p       45.0p    7.1p     48.3p   55.4p
 - diluted           8.1p     36.9p       45.0p    5.9p     40.2p   46.1p

The total column of this statement represents the Company's profit and loss
account. The supplementary revenue and capital columns are presented for
information purposes as recommended by the guidance note issued by the
Association of Investment Companies. All items in the above statement derive
from continuing operations and the Company has no other gains or losses and
therefore no statement of total recognised gains or losses is presented. No
operations were acquired or discontinued in the year.

Reconciliation of Movements in Shareholders' Funds

for the year ended 31 March

                                Equity            Capital           Capital    Capital                 
                       Share Component   Share Redemption  Special Reserve-   Reserve- Revenue         
                     Capital   of CULS Premium    Reserve  Reserve Realised Unrealised Reserve    Total
                       £'000     £'000   £'000      £'000    £'000    £'000      £'000   £'000    £'000
Restated at 1 April   13,984     1,102  23,200         50   19,728   24,162     21,347   5,195  108,768
Final dividend for         -         -       -          -        -        -          - (2,070)  (2,070)
Return for the year        -         -       -          -        -    4,663     22,326   3,940   30,929
from income                                                                                            
Interim dividend for       -         -       -          -        -        -          - (1,231)  (1,231)
Purchase of Treasury       -         -       -          -    (955)        -          -       -    (955)
At 31 March 2006      13,984     1,102  23,200         50   18,773   28,825     43,673   5,834  135,441
Final and special          -         -       -          -        -        -          - (2,664)  (2,664)
dividend for 2006                                                                                      
Return for the year        -         -       -          -        -    8,315     12,451   4,598   25,364
from income                                                                                            
Interim dividend for       -         -       -          -        -        -          - (2,833)  (2,833)
Share buy-backs      (1,484)         -       -      1,484 (15,863)        -          -       - (15,863)
Treasury shares        (373)         -       -        373        -        -          -       -        -
Conversion of CULS     2,914   (1,102)  16,821          -        -        -          -       -   18,633
At 31 March 2007      15,041         -  40,021      1,907    2,910   37,140     56,124   4,935  158,078

Balance Sheet

As at 31 March

                                               (Unaudited)     2006
                                                     £'000    £'000
Fixed assets                                                       
  Investments at fair value                        168,839  152,840
Current assets                                                     
  Debtors                                            1,182    1,347
  Cash at bank                                           -      486
                                                     1,182    1,833
Creditors: amounts falling due within one year    (11,943)    (688)
Net current assets                                (10,761)    1,145
Total assets less current liabilities              158,078  153,985
Creditors: amounts falling due after more than           - (18,544)
one year                                                           
Total net assets                                   158,078  135,441
Capital and reserves                                               
Called up share capital                             15,041   13,984
Equity component of CULS                                 -    1,102
Share premium account                               40,021   23,200
Other capital reserves:                                            
  Capital redemption reserve                         1,907       50
  Special reserve                                    2,910   18,773
  Capital reserve - realised                        37,140   28,825
  Capital reserve - unrealised                      56,124   43,673
Revenue reserve                                      4,935    5,834
Shareholders' funds                                158,078  135,441
Net asset value per ordinary share                                 
  - basic                                           262.8p   244.3p
  - diluted                                         262.8p   229.5p

Cash Flow Statement

For the year ended 31 March

                                               (Unaudited)     2006
                                               £'000          £'000
Cash flow from operating activities                  4,773    3,724
Servicing of finance                                 (593)    (903)
Net financial investment                             4,967    1,784
Equity dividends paid                              (5,497)  (3,301)
Cash inflow/(outflow) before management of           3,650    1,304
liquid resources and financing                                     
Financing                                         (15,863)    (955)
(Decrease)/increase in cash                       (12,213)      349
Reconciliation of cash flow to movement in net                     
(Decrease)/increase in cash                       (12,213)      349
Non-cash movement on CULS                           18,544    (119)
Change in net debt in the year                       6,331      230
Net debt at beginning of year                     (18,058) (18,288)
Net debt at end of year                           (11,727) (18,058)


1. Accounting Policies

The accounts have been prepared under the historical cost convention modified
to include the revaluation of investments, in accordance with applicable United
Kingdom Accounting Standards and in accordance with the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies"
issued by the Association of Investment Companies (`the SORP') in 2005.

The financial information for the year ended 31 March 2007 has been prepared on
a basis consistent with the accounting policies adopted for the year ended 31
March 2006.

2 Income

                                                       2007      2006
                                                      £'000     £'000
Income from listed investments                                       
UK dividends                                          5,752     4,904
UK unfranked investment income - interest                 -       266
                                                      5,752     5,170
Deposit interest                                         37        52
Total income                                          5,789     5,222
Dividends                                             5,752     4,904
Interest                                                 37       318
                                                      5,789     5,222

Special dividends of £312,000 (2006: nil) were in relation to dividends
received in lieu of capital distributions.

These have been allocated to capital.

3. Investment management fee

                      Revenue  2007        Total   Revenue  2006    Total  
                               (Unaudited)                  Capital        
                         £'000       £'000   £'000    £'000   £'000   £'000
Investment management      514         514   1,028      469     469     938
Irrecoverable VAT           90          90     180       82      82     164
                           604         604   1,208      551     551   1,102

The Company's Manager is INVESCO Asset Management Limited (`IAML'). The
contract between the Company and IAML may be terminated on three month's notice
and immediately in certain other circumstances. With effect from 1 April 2006,
the investment management fee is calculated and payable monthly in arrears
based on the value of the funds under management before deducting borrowings,
of 0.7% up to £100 million, 0.6% on the next £50 million, 0.55% on the next £50
million and if in excess of £200 million the fee will be reviewed. This fee is
allocated 50% to capital and 50% to revenue (2006: same) in accordance with the
Board's expected long-term split of returns, in the form of capital gains and
income respectively, from the investment portfolio of the Company. At 31 March
2007 £101,000 (2006: £99,000) was owed in respect of management fees.

4 Dividends on ordinary shares

                                                        2007         2006      
                                                        £'000        £'000     
Amounts recognised as distributions to equity holders                          
in year:                                                                       
Final dividend for the year ended 31 March 2006 of                             
3.95p payable on                                                               
54,942,061 shares (2005: 55,935,724 shares at 3.7p)            2,170      2,070
Special dividend for the year ended 31 March 2006 of                           
0.90p per share                                                                
payable on 54,942,061 shares (2005: nil)                         494          -
First interim dividend for the year ended 31 Mach 2007                         
of 1.5p payable                                                                
on 54,542,611 shares per share (2006: 55,935,724 shares          818      1,231
at 2.2p)                                                                       
Second interim dividend for the year ended 1 March 2007                        
of 1.75p payable                                                               
on 54,542,611 shares                                             955          -
Third interim dividend for the year ended 31 March 2007                        
of 1.75p payable                                                               
on 60,551,622                                                  1,060          -
                                                               5,497      3,301

We set out below the total dividend payable in respect of the financial year,
which is the basis on which the requirements of Section 842 Income and
Corporation Taxes Act 1988 are considered.

                                                                2007       2006
                                                               £'000      £'000
First interim dividend for the year ended 31 Mach 2007                         
of 1.5p payable                                                                
on 54,542,611 shares per share (2006: 55,935,724 shares          818      1,231
at 2.2p)                                                                       
Second interim dividend for the year ended 31 March                            
2007 of 1.75p payable                                                          
on 54,542,611 shares                                             955          -
Third interim dividend for the year ended 31 March 2007                        
of 1.75p payable                                                               
on 60,551,622 shares                                           1,060          -
Proposed final dividend for the year ended 31 March                            
2007 of 2.75p per                                                              
share payable on 59,987,036 shares (2006: 54,942,061           1,650      2,170
shares at 3.95p)                                                               
Special dividend for the year ended 31 March 2006 of                           
0.90p per share                                                                
payable on 54,942,061 shares                                       -        494
                                                               4,483      3,895

5 Return per ordinary share

                      Revenue         2007 Total   Revenue  2006    Total  
Return per ordinary                                                        
- basic                   8.1p       36.9p   45.0p     7.1p   48.3p   55.4p
- diluted                 8.1p       36.9p   45.0p     5.9p   40.2p   46.1p

Basic, capital and total return per ordinary share is based on each return on
ordinary shares after tax and on 56,324,873 (2006: 55,834,064) ordinary shares,
being the weighted average number of shares in issue during the year.

The diluted returns for 2007 are the same as the basic returns due to the
conversion of the entire CULS holdings in the year. In the prior year, diluted
returns per ordinary share are based on each return on ordinary activities
after tax and before interest on CULS and 67,487,630 being the weighted average
number of ordinary shares, assuming conversion of the CULS, in issue in that

6 Net asset value per ordinary shares

The net asset value per ordinary share and the net asset values attributable at
the year end were as follows:-

                Net Asset Value      Net Assets Net Asset Value      Net Assets
                      Per Share    Attributable       Per Share    Attributable
                           2007            2007            2006            2006
                (Unaudited)     (Unaudited)                   P           £'000
                P               £'000                                          
Ordinary shares                                                                
- Basic                   262.8         158,078           244.3         135,441
- Fully Diluted           262.8         158,078           229.5         153,985

The net asset value per ordinary share and the net assets attributable at the
year end on 60,162,036 (2006: 55,443,724) ordinary shares, being the number of
ordinary shares in issue at the year end.

The diluted net asset value is the same as the basic net asset value for the
year ended 31 March 2007 following the conversion of the entire issue of CULS
during the year. In the previous year, the diluted net asset value per ordinary
share was based on net assets at the year end and on the assumption that £
18,995,313 CULS were converted into 11,653,566 ordinary shares based on one 25p
ordinary share for every 163.0p of CULS.

The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 March 2007 or the year ended 31 March
2006. The financial information for 2006 is derived from the statutory accounts
for 2006, which have been delivered to the Registrar of Companies. The auditors
have reported on the 2006 accounts; their report was unqualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report

and did not contain a statement under section 237 (2) or (3) of the Companies
Act 1985. The statutory accounts for the year ended 31 March 2007 have not yet
been delivered to the Registrar of Companies, nor have the auditors yet
reported on them. The statutory accounts for the year ended 31 March 2007 will
be finalised on the basis of the information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.

The audited Report and Accounts will be posted to shareholders shortly. Copies
may be obtained during normal business hours from the Company's Registered
Office, 30 Finsbury Square, London, EC2A 1AG.

The Annual General Meeting will be held on 12 July 2007 at 12noon at 30
Finsbury Square, London, EC2A 1AG.

By order of the Board

INVESCO Asset Management Limited

8 June 2007


Mr Tim Mitchell

Tel - 020 7065 3182

Mr Andrew Watkins

Tel - 020 7065 4023

Miss Karina Bryant

Tel - 020 7065 3644