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UK Select Trust Ld (UKT)

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Wednesday 17 August, 2011

UK Select Trust Ld

Replacement: Half Yearly Report

RNS Number : 5571M
UK Select Trust Limited
17 August 2011
 



GENERAL TEXT AMENDMENT

 

The following amendment has been made to the 'Half Yearly Report' announcement released on 17 August 2011 at 13:51 under RNS No 5272M.

 

Under "Dividend" in the Half-Yearly Report and Condensed Unaudited Financial Statements for the period 1 January 2011 to 30 June 2011, the record date was incorrectly stated. It has been amended to the following  "An interim dividend of 0.95p per share will be paid on 4 November 2011 to shareholders on the register at 26 August 2011 (Six months ended 30 June 2010: 0.90p)."

 

All other details remain unchanged.

 

The full amended text is shown below.

 

UK Select Trust Limited

(the "Company")

 

Registered No:  475

 

Announcement of Results 

 

The financial information set out in this announcement is the full unedited Half-Yearly Report and Condensed Unaudited Financial Statements for the period 1 January 2011 to 30 June 2011 ("Statements") of the Company, as approved by the Board of Directors on 17 August 2011.  The Statements will be delivered to shareholders during August 2011.

To view the full version of this announcement including charts, click on, or paste the following link into your web browser. 
 

http://www.rns-pdf.londonstockexchange.com/rns/5571M_-2011-8-17.pdf

Enquiries:

 

Kleinwort Benson (Channel Islands) Fund Services Limited

Company Secretary

 

Telephone number :  01481 727111

Fax number: 01481 728317

 

17 August 2011

 

Dorey Court

Admiral Park

St Peter Port

Guernsey

GY1 3BG

 

 

 

 

 

 

UK Select Trust Limited

 

 

 

 

 

 

 

 

 

 

Half-Yearly Report and Condensed Unaudited Financial Statements

 for the period 1 January 2011 to 30 June 2011

 

 

 

 

 

 

 

 

 

 

 


UK Select Trust Limited

 

Contents

 

Trust Information                                                                                                                                 2

 

Objectives                                                                                                                                             2

 

Financial Highlights                                                                                                                            3

 

Cautionary Note                                                                                                                                   3

 

Directors and Advisors                                                                                                                      4

 

Chairman's Statement                                                                                                                         5

 

Interim Management Report                                                                                                              6

 

Responsibility Statement                                                                                                                    9

 

The Portfolio and Sector Distribution                                                                                              10

 

Condensed Statement of Comprehensive Income                                                                          14

 

Condensed Statement of Financial Position                                                                                    16

 

Condensed Statement of Net Assets Attributable to Shareholders                                          17

 

Condensed Statement of Cash Flows                                                                                               18

 

Notes to the Condensed Financial Statements                                                                               19

 

 

 

 

 

Trust information

 

UK Select Trust Limited's ordinary shares are listed on the London Stock Exchange.  They can be bought or sold by investors through a stockbroker or by asking a professional adviser e.g. lawyer, accountant or bank manager to do so on their behalf.

 

UK Select Trust Limited's share price is published daily under Investment Companies in the Share Information Service in the Financial Times.  In addition it is published every Monday on the business pages of The Guernsey Press and Star and Jersey Evening Post.

 

Objectives UK Select Trust Limited

 

UK Select Trust Limited (the "Company") is registered in Guernsey and complies with the definition of a UK Investment Trust Company.  The Company invests over 80% of its gross assets by value in companies listed or quoted on the London Stock Exchange and the investment policy aims to provide a total return to shareholders in excess of the net total return on the FTSE All-Share Index and a progressive dividend policy.

 

 

 

 

Financial Highlights

 





Six months ended


Six months ended

Year ended





30 June

2011


30 June

2010

31 December 2010









Net asset value per share



167.46p


137.63p

 161.75p



£34.82m


£28.45m

£33.46m

Revenue return on ordinary activities for the financial period/year after taxation

£0.33m


£0.32m

£ 0.69m

Capital (deficit)/ return on ordinary activities for the financial period/ year after taxation

£1.50m


£(2.25)m

£2.57m

Revenue return per ordinary share


1.60p


1.53p

3.36p

Capital (deficit)/ return per ordinary share


7.25p


(10.87)p

12.47p



0.95p


0.90p

3.90p

Share Price



137.50p


120.25p

 136.75p

Net asset value total return (3)



5.39%(6)


(5.17)%(5)

11.26%(4)

FTSE All-Share total return



2.96%


(6.15)%

14.51%









 (1) During the period the Company purchased 90,000 ordinary shares of 10p from the market to be held in Treasury. 195,645 ordinary shares of 10p each from the shares held in Treasury were reissued during the period. 37,999 shares remain in Treasury at 30 June 2011. These are held for reissue and the Company does not intend to cancel these.

 

(2) The dividend figures include the proposed dividend for the relevant financial period.

 

(3) Source: Datastream. Basis: Income reinvested and net of expenses.

 

(4) Based on the audited Annual Financial Reports for the years ended 31 December 2009 and 31 December 2010.

 

(5) Based on the audited Annual Financial Report for the year ended 31 December 2009 and the unaudited Net Asset Value as at 30 June 2010 released to market.

 

(6) Based on the audited Annual Financial Report for the year ended 31December 2010 and the unaudited Net Asset Value as at 30 June 2011 released to market.

 

Dividends 

                                                                                                                                                                                                                                         An interim dividend of 0.95p per share will be paid on 4 November 2011 to shareholders on the register at 26 August 2011 (Six months ended 30 June 2010: 0.90p).  The Company intends to continue with the policy of paying a second interim dividend each year to shareholders in May of the following year in place of a final dividend.

 

Cautionary Note and Forward Looking Statements

 

The Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the UK Select Trust Limited's strategies and the potential for those strategies to succeed.  The IMR should not be relied on by any other party or for any other purpose.

 

The IMR contains certain forward-looking statements.  These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward looking information.

 

 

Directors and Advisors

 

JM Le Pelley, (Born 1949),  Non-executive Chairman.  He joined the board in 1983.  Other Directorships include AcenciA Debt Strategies Limited.

 

DR Maltwood, (Born 1938),  Non-executive Director.  He joined the board in 1997 after a career in stockbroking in Jersey. He has held a number of positions including the Chairman and Director of a number of quoted companies.

 

G Ross Russell, (Born 1933),  Non-executive Director.  He joined the board in 1995.  He is a Director of Forsight 3 Venture Capital Trust Plc and former Chairman of the Chartered Institute of Securities and Investment and Deputy Chairman of the London Stock Exchange.


JG West FCA, (Born 1947),  Non-executive Director.  He joined the board in 1997.  He is the Chairman of Henderson Fledgling Trust Plc (formerly Gartmore Fledgling Trust Plc), Canaccord Genuity Limited, New City High Yield Fund Limited, and a Director of a number of public and private companies including British Assets Trust Plc and JP Morgan Income and Capital Trust Plc.  He is a former chief executive of Lazard Asset Management Limited.

 

D Warr, (Born 1953),  Non-executive Director and Audit Committee Chairman.  He is a fellow of the Institute of Chartered Accountants in England and Wales and joined the Board in 2006.  He is also Non-executive Chairman of FRM Diversified Alpha Limited and a Non-executive Director of Breedon Aggregates Limited (formerly Marwyn Materials Limited), Invista Foundation Property Trust Limited and Unigestion (Guernsey) Limited.     

 

Advisors 

 

Secretary and Registered Office                                                     Registrars

Kleinwort Benson (Channel Islands)                                                Capita Registrars (Guernsey) Limited

Fund Services Limited                                                                         Longue Hougue Road

Dorey Court                                                                                          St Sampson

Admiral Park                                                                                         Guernsey GY2 4JN

St Peter Port                                                                                          0870 162 3100

Guernsey GY1 3BG                                                                              (calls cost 10p per minute plus network extras,

01481 727111                                                                                         lines are open 8:30am to 5:30pm Monday-Friday)

 

Investment Manager                                                                           Stockbrokers

Scottish Widows Investment Partnership Limited                         Canaccord Genuity Limited

Edinburgh One                                                                                     Cardinal Place

Morrison Street                                                                                    7th Floor

Edinburgh EH3 8BE                                                                             80 Victoria Street

0131 655 8500                                                                                        London SW1E 5JL

                                                                                                                0207 050 6500

 

Recognised Auditor                                                                            Bankers and Custodian

Deloitte LLP                                                                                          HSBC Bank plc

Regency Court                                                                                     8 Canada Square

Glategny Esplanade                                                                             London E14 5HQ

St Peter Port

Guernsey GY1 3HW

01481 724011                                                                                                                                                                             

                                                                                                                                                               

                                                                                                               

                                                                                                               

                                                                               

                                                                                               


Chairman's Statement

 

Review of Performance

 

I am pleased to present your Company's interim report for the six months to 30 June 2011.  The Company produced a strong first half result with the net asset value rising by 5.39% on a total return basis.  This compared very favourably with the 2.96% total return from the FTSE All-Share Index.  Strong stock selection was the driver of this performance and the key contributors are discussed in the Interim Management Report.

 

Share Price and discount

 

The share price nudged 0.5% higher over the period while the discount at which your shares trade relative to their net asset widened to 17.9%.

 

Gearing

 

The Company continued to employ no borrowings during the interim period under review.

 

Dividend

 

The board is pleased to announce an interim dividend of 0.95p.

 
Prospects

 

The first half of 2011 has been characterised by slowing growth rates at both the macroeconomic and corporate earnings levels.  The European sovereign debt crisis and concerns over the deteriorating fiscal position in the US are currently dominating the news headlines and impacting investor sentiment accordingly. 

 

The problems facing some of the key emerging markets are very different.  In economies such as China, Russia and India the authorities are implementing policy action designed to moderate unsustainably high economic growth and inflation rates.

 

The UK stock market, however, continues to offer excellent value in both an historic context and relative to other asset classes such as bonds and cash.  The Company's portfolio will continue to be managed actively to maximise returns for shareholders.

 

 

 

 

 

J M Le Pelley

Chairman

17 August 2011

 

 

 

 


Interim Management Report

 

Introduction

 

The UK stock market continued to grind higher through the first half of the year, though the upward trend was interrupted by periodic bouts of nervousness as fears resurfaced over global economic growth. While the global economy continued to recover, growth rates varied significantly across the major economies. Emerging markets such as China and India continued to grow rapidly, with the main challenge in these economies being to dampen inflationary pressures through a series of interest rate hikes. At the other end of the spectrum the recovery in the UK stalled, with the economy standing still if the fourth quarter of 2010 and first quarter of 2011 are viewed together. In the US, the second round of quantitative easing, announced in November 2010, helped support the recovery, though growth also slowed into the first quarter of 2011, with unemployment remaining stubbornly high.

 

The period under review was dominated by several macroeconomic and geopolitical issues. Persistent fears over the rising rate of inflation in emerging and some developed markets became a key theme, with monetary authorities desperate to balance the need to control inflation while still providing adequate stimulus to maintain the momentum behind economic recovery. The European sovereign debt crisis remained firmly in the spotlight during the period, with Portugal the latest eurozone member to seek financial aid from the EU. In addition to the economic problems, equity markets also had to contend with the tragic earthquake in Japan as well as the escalating political crisis in the Middle East, which triggered a spike in the oil price.

 

Market leadership shifted considerably during the period, with the more economically sensitive sectors driving the market higher into the early part of 2011. Thereafter, renewed fears over the strength of the global economic recovery prompted a marked rotation in market leadership towards the more defensive sectors, such as tobacco and pharmaceuticals. The constant throughout the period was the lacklustre performance of the banks sector as fears over regulation and the escalating sovereign debt crisis in Europe continued to dominate investor sentiment.

 

 

Performance

 

Over the six months under review, the net asset value of the Company rose 5.39%, which compares favourably to the 2.96% rise in the FTSE All-Share Index over the same period.

 

Key contributors to performance included Resolution, an acquisition vehicle within the UK life assurance sector.  During the period, the company reassured investors that no further acquisitions would be undertaken with management fully focused on running the existing portfolio of businesses.  The company also announced a major capital return programme.

 

The Company's performance also benefitted from Berkeley Group's announcement that it planned to return £13 per share in cash to shareholders over the next ten years. This capital return reinforces our view that the London based house-builder remains significantly undervalued by the equity market. The holding in Indus Gas, an India-focused energy company, also performed very strongly following the announcement of a dramatic increase in its gas reserves base following the completion of an independent audit in December 2010.

 

 

 

 

 

 

 

 

Interim Management Report (continued)

 

 

Portfolio activity

 

Towards the end of the review period the portfolio's exposure to some of the more defensive sectors such as pharmaceuticals, tobacco and telecommunications, was reduced following a sustained period of very strong performance. Proceeds were reinvested in the mining sector which had been very weak on concerns over slowing global economic growth.  This provided an excellent buying opportunity with very attractive valuations. The Company also participated in the initial public offering of Glencore International. 

 

Construction of the Company's portfolio continues to be shaped by rigorous fundamental analysis at the stock-specific level. At this stage of the economic recovery, we prefer companies that are exposed to business-to-business spending rather than consumer discretionary spending. Fiscal austerity measures announced in the last year are only just starting to bite on household disposable incomes.

 

Outlook

 

It is not difficult to find reasons to be nervous about the outlook for the global economy. Chinese authorities continue to try to engineer a soft landing for their economy while a lasting solution to the European sovereign debt crisis appears some way off. In the UK, economic growth remains anaemic while inflation is proving to be more persistent than forecast. 

 

Equity valuations, however, remain undemanding, particularly when viewed against other asset classes, and we remain cautiously optimistic for the prospects for the UK equity market as we move into the second half of 2011.

 

Risks and uncertainties

 

The Company's objective in managing risk is the creation and protection of shareholder value. Risk is inherent in the Company's activities, but is managed through a process of ongoing identification, measurement and monitoring, subject to risks limits and other controls.

 

There are a number of potential risks and uncertainties which could have a material impact on the Company's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The Directors do not consider that the principal risks and uncertainties have changed since the publication of the annual report for the year ended 31 December 2010.

 

Financial risk profile

 

The Company's financial instruments comprise investments, cash and various items such as debtors, creditors etc that arise directly from the Company's operations.  The main purpose of these instruments is the investment of shareholders' funds.

 

Market price risk

 

The main risk arising from the Company's financial instruments is market price risk.


In accordance with the Company's investment objectives, the Company does not hedge against its exposure to market price risk.

 

The investment strategy of the Company has been delegated to the Company's Investment Manager, Scottish Widows Investment Partnership Limited under an agreement dated 25 April 2002.  The Investment Manager operates under agreed parameters and the Board monitors their performance on a regular basis.

 

Interim Management Report (continued)

 

 

 

Liquidity risk

 

The Company's assets comprise securities that can be readily realised to meet its obligations. As a result the Company is able to quickly liquidate its investments in these instruments at an amount close to its fair value in order to meet its liquidity requirements.

 

The Company has entered into a revolving 5-year loan facility explained in note 6.

 

Interest rate risk

 

The Company's interest rate sensitive assets and liabilities mainly comprise of cash at bank and a bank loan.  The cash at bank and bank loan facility are subject to floating rates and the loan facility is considered to be part of the investment strategy of the Company.  No other hedging is undertaken in respect of this interest rate risk. The bank loan facility, which is undrawn at the year end is due to expire on 23 September 2012.

 

Foreign currency risk

 

Foreign currency risk is the risk that the value of a financial instrument will fluctuate because of changes in foreign exchange rates.


The Company's foreign currency risk for the period arose from the investment portfolio including cash and was minimal as it was principally Sterling denominated.  No hedging was undertaken in respect of this foreign currency exposure. The Company had no significant exposure to foreign currencies as at 30 June 2011.

 

 

Scottish Widows Investment Partnership

 

20 July 2011

 

Scottish Widows Investment Partnership - SWIP - is one of the largest asset management companies in Europe. Our teams are recognised as high fliers within the industry. Our performance is based on their skills, backed by thorough research, and the ability to uncover and capitalise on opportunities as soon as they arise. These market-leading capabilities are further supported by a global presence that spans the UK, the US and Asia.

 

We invest across all asset classes, including equities, property, bonds and cash. We also offer specialist expertise in multi-manager, multi-asset solutions and socially responsible investing.

 

Our goal: to provide superior risk-adjusted returns and quality service for our clients, which include individuals, pension funds, charities and financial institutions from around the world.

 

Whatever your investment requirements, our teams have the innovation, drive and skill to deliver investment solutions that perform.

 

Scottish Widows Investment Partnership is part of the Lloyds Banking Group.

As of 30 June 2011, we manage funds worth £147 billion.

               



Responsibility Statement

 

We confirm that to the best of our knowledge:

 

·      the half-yearly report has been prepared in accordance with IAS 34 'Interim Financial Reporting';

·      the interim management report includes a fair review of the important events during the first six months of 2011 and provides a fair review of the risks and uncertainties faced by the Company in the remaining six months of the year, as required by Disclosure and Transparency Rules ("DTR") 4.2.7R; and

·      the interim management report includes a fair review of related party transactions and changes therein, as required by DTR 4.2.8R.

 

 

By order of the Board

 

 

JM Le Pelley

 

 

 

 

D Warr

Directors                  

     

17 August 2011

 

 

 

 

 

 

 

 



 

The Portfolio as at 30 June 2011
 


Company

Market Value

Activity





 



£'000






 









 

1

 

Resolution Ltd

2,426

Offer a broad spectrum of funds to cater for the differing investment needs.

 

2

Lloyds Banking Group Plc

2,287

Financial services group providing a range of banking and financial services, primarily in the United Kingdom, to personal and corporate customers.

 

3

Rio Tinto Plc

2,264

One of the global leaders in the extraction and processing of the earth's mineral resources.

 

4

Xstrata Plc

2,243

A diversified Swiss mining company operating a number of production sites in all continents of the world.

 

5

Indus Gas Ltd

1,927

Oil and gas exploration and development company based in India.

 

6

BP Plc

1,903

One of the world's largest energy companies, providing fuel for transportation, energy for heat and light, retail services and petrochemicals products for everyday items.

 

7

Reed Elsevier Plc

1,799

Publisher and information provider, publishing information for the scientific and medical professions, legal, and business-to-business sector.

 

8

Berkeley Group Holdings Plc

1,565

UK-based housebuilder and developer.


9

BG Group Plc

1,530

Involved in oil and gas transmission and distribution, as well as power generation.

 

10

Glencore International Plc

1,508

A leading integrated producer and marketer of commodities.

 

11

Smiths Group Plc

1,465

A world leader in the practical application of advanced technologies, Smiths Group delivers products and services for the threat & contraband, medical devices, energy, communications and engineered components markets worldwide.

 

12

KSK Power Ventur Plc

1,167

Engaged in emerging opportunities in the power development market.


13

Essar Energy Plc

1,016

Indian-focused energy company with assets in the existing power and oil and gas businesses.

 





 

14

Legal & General Group Plc

911

A leading provider of risk, savings and investment management products in the UK.

 

15

Ryanair Holdings Plc

907

Irish-based budget airline

 

16

RSA Insurance Group Plc

891

Worldwide commercial insurer providing property, automobile, liability, amd speciality insurance products.

 

17

Great Eastern Energy Corporation Plc

889

Indian-based energy provider.

 

18

AngloAmerican Plc

796

One of the world's largest mining companies.

 

19

Cairn Energy Plc

709

One of Europe's largest independent oil and gas exploration and production companies.

 

20

HSBC Holdings Plc

683

Large UK - based financial services group.

 

21

DS Smith Plc

632

International group focused on packaging and office products.

 

22

iEnergizer

607

Engaged in providing third-party integrated business process outsourcing solutions to clients throughout the world in three primary sectors: banking, financial services and insurance, and entertainment and telecommunications.

 

23

Vallares Plc

601

Investment vehicle aiming to purchase emerging markets oil and gas businesses.

 

24

Close Brothers Group Plc

518

Banking, securities and asset management group.

 





 

The Portfolio as at 30 June 2011 (continued)
 

25

Tate & Lyle Plc

502

Engaged in the manufacture and sale of ingredients and solutions to the food, beverage, industrial, animal feed, pharmaceutical, and personal care markets.

26

Dolphin Capital Investors Ltd

498

Real estate investment company focused on early-stage, large-scale, leisure-integrated residential resorts primarily in southeast Europe.

27

Hardy Oil & Gas Plc

428

AIM-listed oil and gas exploration company.

27

Cadogan Petroleum Plc

424

An independent oil and gas exploration, development and production company.

28

Tullett Prebon Plc

336

As intermediary in the wholesale financial markets industry facilitating the trading activities of its clients.

29

LXB Retail Properties Plc

307

Jersey based investment company investing in out-of-town and edge-of-town retail assets.

30

Breedon Aggregates Ltd

273

Acquires and manages companies and businesses in the UK and international building materials industry.

31

Petra Diamonds Ltd

245

The group's principal activity is exploring for and mining diamonds in Africa.

32

Aurora Russia Ltd

244

Investment vehicle established to make investments in small and mid-sized Russian companies.

33

Petroceltic International Plc

191

Oil and gas exploration and production company focused on the Gulf of Mexico.

34

Arden Partners Plc

75

Institutional stockbroker specialising in small, midcap and AIM companies.

35

Ingenious Media Active Capital Ltd

56

Media investment and advisory company in the UK.

36

Resaca Exploitation Inc (DI)

52

US-based independent oil and gas exploration company.

37

Newfound N.V.

10

Developer and operator of up-market holiday resorts.

38

Leed Petroleum Plc

-

Oil and gas exploration and production company focussed on the Gulf of Mexico.

39

Eatonfield Group Plc

-

Commercial and residential property developer with a focus on Wales and the North of England.


Total Valuation

   34,885

These holdings represent 100% of the total valuation.

 

 



 
Sector Distribution as at 30 June 2011







Total

Total



30 June 2011

30 June 2010

Sector Classification


%

%

Resources




Oil and Gas


              27.7

              26.2



              27.7

              26.2

Basic industrials




Construction and building materials


                5.3

                2.1  

Mining


              20.2

6.7



              25.5

              8.8

Non-cyclical consumer goods




Tobacco


-

6.5

Pharmaceuticals and biotechnology


              -

             10.3

Food Producers


1.4

-



              1.4

              16.8

Cyclical services




Support services


                1.7  

                -

Leisure, entertainment and hotels


                2.6

              3.7

Media and entertainment


5.2

                -



                9.5

              3.7

Non-cyclical services




Telecommunication services


               -

6.3



               -

               6.3  

Utilities




Utilitiles other


              3.4

              17.5  



              3.4

              17.5

General Industries




Packaging


1.8

-

Advanced Technologies


4.2

-



                6.0  

                -

Financials




Banks


               8.5

                9.5

Specialty and other finance


                2.6

                4.5

Real Estate


                1.4

                1.4

Investment companies


                1.8

                0.2

Non life insurance


                2.6

                3.1

Life assurance


                9.6  

                  -  



              26.5

              18.7

Net current assets


                -

                2.0



                

                

Net assets


             100.0

             100.0

 

Note: The distribution of investments is based on the valuations at 30 June 2011 and 30 June 2010. All of the investments above are listed or quoted on the London Stock Exchange, with the exception of  Newfound N.V. which is an unlisted trading entity.



 
Sector Distribution as at 30 June 2011 (continued)

 

 

1

Resources

       27.7%

2

Basic industrials

       25.5%

3

Non-cyclical consumer goods

         1.4%

4

Cyclical services

         9.5%

5

General industrials

         6.0%

6

Utilities

         3.4%

7

Financials

       26.5%

 

By sector as a percentage

 



Condensed Statement of Comprehensive Income

for the six months ended 30 June 2011 (unaudited)






 

Six months ended 30 June 2011

 

Six months ended 30 June 2010




Notes


Revenue


Capital


Total


Revenue


Capital


Total






£'000


£'000


£'000


£'000


£'000


£'000

Income














Dividend revenue                                 3                          


553


-


553


511


-


511

Other revenue                                       3                          


-


-


-


-


-


-

Net gains on financial assets

at fair value through profit or loss        5                          


-


1,571


1,571


-


(2,187)


  (2,187)

Net foreign exchange (loss)/gain



-


(1)


(1)


-


(1)


(1)




553


1,570


2,123


511


(2,188)


(1,677)

Expenses
















Investment management fees

10


22


65


87


19


57


76

Performance fee


10


1


4


5


-


-


-

Administration fees


10


49


-


49


50


-


50

Registrars' fees


          


10


-


10


14


-


14

Auditors' fees





9


-


9


7


-


7

Directors' fees and expenses


    10       


55


-


55


42


-


42

Other expenses


76


-


76


61


-


61

Total operating expenses before finance costs



222


69


291


193


57


250














Operating profit/(loss) before finance costs



331


1,501


1,832


318


(2,245)


(1,927)

















Finance costs















Interest payable




1


4


5


1


3


4














Profit for the period



330


1,497


1,827


317


(2,248)


(1,931)















Basic return/(deficit) per ordinary share

4


1.60p


7.25p


8.85p


1.53p


(10.87)p


(9.34)p

 

 

The total column of this statement is the condensed statement of comprehensive income of the Company, with the revenue and capital columns representing supplementary information.

 

All revenue and capital items in the above statement derive from continuing operations. All income is attributable to the ordinary shareholders of the Company.

 

 

 

 

 

 

 

 

 

 

The Notes on Pages 19 to 23 are an integral part of these condensed financial statements.


Condensed Statement of Comprehensive Income (continued)

for the six months ended 30 June 2011 (unaudited)






 

Year ended 31 December 2010




Notes


Revenue


Capital


Total







£'000


£'000


£'000


Income









Dividend revenue                                                               3                          


1,031


-


1,031


Other revenue                                                                     3                          


12


-


12


Net gains on financial assets

at fair value through profit or loss                                      5                          


-


2,714


2,714


Net foreign exchange (loss)/gain



-


(20)


(20)





1,043


2,694


3,737


Expenses











Investment management fees

10


40


118


158


Performance fee


10


-


-


-


Administration fees


10


89


-


89


Registrars' fees


          


26


-


26


Auditors' fees





18


-


18


Directors' fees and expenses


       10       


97


-


97


Other expenses


79


-


79


Total operating expenses before finance costs



349


118


467










Operating profit/(loss) before finance costs



694


2,576


3,270













Finance costs










Interest payable




2


6


8










Profit for the year



692


2,570


3,262











Basic return/(deficit) per ordinary share

4


3.36p


12.47p


15.83p


 

 

The total column of this statement is the condensed statement of comprehensive income of the Company, with the revenue and capital columns representing supplementary information.

 

All revenue and capital items in the above statement derive from continuing operations. All income is attributable to the ordinary shareholders of the Company.

 

 

 

 

 

 

 

 

 

 

 

 

The Notes on Pages 19 to 23 are an integral part of these condensed financial statements.

Condensed Statement of Financial Position

as at 30 June 2011(unaudited)

 

 


Notes


 

 

30 June

2011


 

 

30 June

2010


31 December 2010





£'000


£'000


£'000

Assets








Cash and cash equivalents




346


537


3,841

Due from brokers




-


-


900

Other receivables and accrued income



122


180


229

Financial assets at fair value through profit or loss

5


34,885


27,865


28,607

Total assets




35,353


28,582


33,577










Liabilities









Due to brokers




366


-


-

Other payables and accrued expenses




167


136


117

Total  liabilities




533


136


117










Net assets attributable to shareholders



34,820


28,446


33,460










Represented by









Share capital


7


2,083


2,083


2,083

Treasury share reserve


7


(94)


(269)


(245)

Reserves



32,831


26,632


31,622









Net assets attributable to shareholders



34,820


28,446


33,460









Number of ordinary shares in issue (net of Treasury shares)

7


20,792,485


20,667,819


20,686,840









Net asset value per share

8


167.46p


137.63p


161.75p

 

These financial statements were approved by the Board of Directors on 17 August 2011 and signed on behalf of the Board by:

 

 

JM Le Pelley                                                                        D Warr

Director                                                                                 Director

 

 

 

 

 

 

 

 

 

 

 

 

 

The Notes on Pages 19 to 23 are an integral part of these condensed financial statements.

Condensed Statement of Net Assets Attributable to Shareholders

for the six months ended 30 June 2011 (unaudited)

 


Equity share capital

Treasury share reserve

Share premium

Capital redemption reserve

Capital reserve-realised

Capital reserve- unrealised

Revenue reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2011

2,083

(245)

5,401

4,308

14,214

3,718

3,981

33,460

Shares repurchased during the period

-

(124)

-

-

-

-

-

(124)

Cash dividends:









-2010 2nd interim dividend

-

-

-

-

-

-

(343)

(343)

Scrip dividends

-

275

-




(275)

-

Net profit

-

-



1,091

406

330

1,827

At 30 June 2011

2,083

(94)

5,401

4,308

15,305

4,124

3,693

34,820

 

There are no other recognised income and expenses for the six months ended 30 June 2011

 

For the six months ended 30 June 2010 (unaudited)

 


Equity share capital

Treasury share reserve

Share premium

Capital redemption reserve

Capital reserve-realised

Capital reserve- unrealised

Revenue reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

At 1 January 2010

2,083

(380)

5,411

4,308

10,788

4,574

4,048

30,832

Shares repurchased during the period

-

(123)

-

-

-

-

-

(123)

Cash dividends:









-2009 second interim dividend

-

-

-

-

-

-

(331)

(331)

Scrip dividends

-

234


-

-

-

(234)

-

Net profit

-

-

-

-

1,978

(4,227)

317

(1,932)

At 30 June 2010

2,083

(269)

5,411

4,308

347

3,800

28,446

 
 
 
There are no other recognised income and expenses for the six months ended 30 June 2010
 

 

 

 

 

 

 

 

 

 

 

The Notes on Pages 19 to 23 are an integral part of these condensed financial statements.

Condensed Statement of Cash Flows

for the six months ended 30 June 2011(unaudited)








Six months ended


Year ended



30 June 2011


30 June 2010


31 December 2010


Notes

£'000


£'000


£'000

Cash flows from operating activities






Payment on purchase of financial investments


(23,891)


 

(34,673)


(61,505)

Proceeds from sale of financial investments


20,450


33,916


63,894

Cash received from investments


602


781


1,232

Other income


-


-


12

Investment management fee paid


(42)


(79)


(154)

Other cash payments


(142)


(17)


(53)








Net cash (outflow)/inflow from operating activities


(3,023)


(72)


3,426








Cash flows from financing activities







Interest paid


(5)


(4)


(8)

Share repurchase


(124)


(123)


(189)

Equity dividends paid


(343)


(331)


(435)








Net cash outflow from financing activities


(472)


(458)


(632)








Net (decrease)/increase in cash and cash equivalents

(3,495)


(530)


2,794








Effect of exchange rate changes on cash and cash equivalents


-


-


(20)








Cash and cash equivalents at the beginning of the period/year


3,841


1,067


1,067








Cash and cash equivalents at the end of the period/year


346


537


3,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Notes on Pages 19 to 23 are an integral part of these condensed financial statements.

Notes to the Condensed Financial Statements (unaudited)

 

1.         General information

 

UK Select Trust Limited is a UK Investment Trust Company incorporated under The Companies (Guernsey) Law, 2008, with its registered office at Dorey Court, Admiral Park, St Peter Port, Guernsey. UK Select Trust Limited's shares are listed on the London Stock Exchange.

 

The objective of the Company is to invest over 80% of its gross assets by value in companies listed or quoted on the London Stock Exchange and the investment policy aims to provide a total return to shareholders in excess of the net total return on the FTSE-All Share Index and a progressive dividend policy.

 

The Company has no employees.

 

The half-yearly report has not been audited or reviewed by the auditors Deloitte LLP pursuant to the Auditing Practices Board guidance on 'Review of Interim Financial Information'.

 

The information presented for the year ended 31 December 2010 does not constitute the statutory financial statements of the Company. A copy of the annual financial report and audited financial statements for that year have been delivered to the Guernsey Financial Services Commission. The auditors' report on those financial statements was unqualified and did not contain a statement under Section 263(2) of The Companies (Guernsey) Law, 2008.

 

2.         Accounting Policies

 

a.         Basis of presentation

 

The half-yearly report for the six months ended 30 June 2011 has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. The half-yearly report should be read in conjunction with the annual financial statements for the year ended 31 December 2010, which have been prepared in accordance with International Financial Reporting Standards.

 

b.         Standards and interpretations

 

The accounting policies applied in the half-yearly report are consistent with those of the annual financial statements for the year ended 31 December 2010, as described in those financial statements.

 

c.         Going Concern

 

In the opinion of the Directors, there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.  For this reason the condensed financial statements have been prepared using the going concern basis. 

 

The Directors have arrived at this opinion by considering, inter-alia, the following factors:

 

·      the Company has sufficient liquidity to meet all on-going expenses;

·      the portfolio of investments held by the Company consists of listed investments which are readily realisable and therefore the Company will have sufficient resources to meet its liquidity requirements; and

·      the Company currently has no external borrowings and therefore is under no obligation to repay any borrowing facilities for the foreseeable future.

 



 

Notes to the Condensed Financial Statements (unaudited) (continued)

 

3.         Dividend and other revenue


Six months ended


Year ended


30 June


30 June


31 December


2011


2010


2010


£'000


£'000


£'000

Dividend revenue from investments designated at fair value through profit or loss:


Dividends

553


511


1,031


 

553


 

511


 

1,031







Other revenue from financial assets not at fair value through profit or loss:


Unclaimed dividends 2003/2004



-


12

Total revenue

 

553


 

511


 

1,043







4.         Basic return/(deficit) per ordinary share

 


Six months ended

Six months ended

Year ended


30 June 2011

30 June 2010

31 December 2010


Revenue

Capital

Total

Revenue

Capital

Total

Revenue

Capital

Total


pence

pence

pence

pence

pence

pence

pence

pence

pence

Return/(deficit)

1.60

7.25

8.85

1.53

(10.87)

(9.34)

3.36

12.47

15.83

 

Revenue return per ordinary share is based on the net revenue on ordinary activities of £330,000 (Six months ended 30 June 2010: £317,000. Year ended 31 December 2010: £692,000.) and on 20,645,138 ordinary shares, being the weighted average number of ordinary shares in issue during the period (Six months ended 30 June 2010: 20,684,456 . Year ended 31 December 2010: 20,608,335).

 

Capital return per ordinary share is based on a net capital return for the financial period of £1,497,000 (Six months ended 30 June 2010: capital deficit £2,248,000. Year ended 31 December 2010: capital return £2,570,000) and on 20,645,138 ordinary shares, being the weighted average number of ordinary shares in issue during the period (Six months ended 30 June 2010: 20,684,456. Year ended 31 December 2010: 20,608,335).



 

 

Notes to the Condensed Financial Statements (unaudited) (continued)

 

5.         Investments






Six months ended

Six months ended

Year ended






30 June 2011

30 June 2010

31 December 2010






Fair Value

% of net assets

Fair Value

% of net assets

Fair Value

% of net assets

Financial assets at fair value through profit or loss


£'000


£'000


£'000









- Listed equity securities

34,875

100.23 

27,855

97.92

28,597

85.47

-De-listed trading entities


10

0.03

10

0.04

10

0.03






34,885

100.26    

          27,865

   97.96

   28,607

 86.50



















 Six months ended


Year ended



 30 June


 30 June


31 December


2011


2010


2010

Net gains/(losses) on financial assets at fair value through profit or loss

£'000


£'000


£'000

Realised gains



1,165     


2,040 

      

               3,570

Unrealised gains/(losses)

406    


(4,227)


 (856)
















1,571  


   (2,187)


            2,714












 

6.         Loan facility

 

The Company has a revolving 5 year loan facility, secured on the assets of the Company, which is due to expire on 23 September 2012 with an aggregate principal amount of £2,000,000, for the purposes of future investment.   During the half-year ended 30 June 2011, the loan facility was not utilised.  Interest is payable at a rate of six month sterling LIBOR plus 0.6% and the borrowing is held at amortised cost. During the period, interest of £nil (Six months ended 30 June 2010: £nil. Year ended 31 December 2010: £nil) was paid. A fee of 0.30% per annum is payable on the undrawn amount of this facility, resulting in £3,000 being paid for the period ended 30 June 2011(1). Further, the Company is required to comply with the following financial covenants imposed by the bank:

 

·      the Company is required to ensure that the borrowing does not at any time exceed 45% of the Adjusted Gross Asset Value;

·      the Company is required to maintain the Net Worth at not less that £20,000,000; and

·      the Company is required to ensure that the investment portfolio includes holdings in not less that 30 separate businesses.

 

(1)             The loan is secured on the assets of the Company.



 

Notes to the Condensed Financial Statements (unaudited) (continued)

 

7.         Share capital







30 June


30 June


31 December







2011


2010


2010







£'000


£'000


£'000

Authorised










100,000,000 ordinary shares of 10p each

     10,000


10,000


             10,000

250,000 5% cumulative preference restrictive voting shares of £1 each

          250


250


                  250







     10,250


 

10,250


             10,250

 

The holders of the five per cent cumulative preference restrictive voting shares shall be entitled, out of profits for dividend, to a fixed cumulative preferential dividend at the rate of five per cent per annum and in a winding-up or on a return of capital shall be entitled to repayment of capital in priority to the ordinary shareholders.  At 30 June 2011, no five per cent cumulative preference restrictive voting shares had been issued (30 June 2010: none, 31 December 2010: none).  The ordinary shareholders carry the right to receive any surplus income and in winding-up any surplus assets, after repayment of the preference capital and dividends as above.

 







30 June

 2011


31 December 2010







£'000


£'000

Issued, called up and fully paid:






20,830,484 ordinary shares of 10p each




(2010: 20,830,484)




       2,083


           2,083







30 June 2011







Treasury share reserve

Shares in issue







Shares

Nominal

Cost

£'000

Shares Nominal

Cost

£'000

Balance at 1 January 2011



  143,644

           245

20,830,484

2,083

Shares purchased and held in Treasury

 90,000

           124

 -

 -

Shares issued in lieu of dividends from Treasury

   (195,645)

(275) 

 -

 -

Balance at 30 June 2011

 37,999

 94

20,830,484

2,083

















31 December 2010







Treasury share reserve

Shares in issue







Shares Nominal

Cost

£'000

Shares Nominal

Cost

£'000

Balance at 1 January 2010



254,402

380

20,830,484

2,083

Shares purchased and held in Treasury

  150,000

189

                   -

 -

Shares issued in lieu of dividends from Treasury

(260,758)

(324)

 -

 -

Balance at 31 December 2010



143,644

           245

 

20,830,484

 

2,083

 

During the period no shares were purchased for cancellation (year ended 31 December 2010: none).

 

Notes to the Condensed Financial Statements (unaudited) (continued)

 

7.         Share capital (continued)

 

On 17 January 2011, 50,000 shares were purchased for Treasury at a total cost including expenses of £68,834 and on 31 January 2011, 40,000 shares were purchased for Treasury at a total cost including expenses of £55,067.

 

On 27 May 2011, 195,645 shares were issued to shareholders who elected to receive them in lieu of a second interim cash dividend for 2010. Ordinary shares of 10p each, fully paid were issued to shareholders from the Treasury reserves account held by the Company.

 

8.         Net asset value per share

 

Net asset value per ordinary share is based on net assets attributable to the ordinary shareholders of £34,820,000 (Six months ended 30 June 2010: £28,446,000. Year ended 31 December 2010: £33,460,000) and on 20,792,485 (Six months ended 30 June 2010: £20,667,819. Year ended 31 December 2010: 20,686,840) ordinary shares, being the number of ordinary shares in issue at the end of the period.

 

9.         Related party transactions

 

The members of the Board of Directors are listed on page 4 of the half-yearly report. Fees earned by the Directors of the Company during the period were £53,750 (Six months ended 30 June 2010: £41,000. Year ended 31 December 2010: £94,750) of which £nil (Six months ended 30 June 2010: £11,250. Year ended 31 December 2010: £nil) was outstanding at the period end.  Allowable expenses claimed by Directors in the course of their duties amounted to £1,067 for the six months ended 30 June 2011 (Six months ended 30 June 2010: £514.Year ended 31 December 2010: £2,344).

 

D Warr is a Non-Executive Director of Breedon Aggregates Limited of which the Company holds 1,583,270 shares as at 30 June 2011.

 

The Investment Manager, Scottish Widows Investment Partnership Limited ("SWIP") exercises discretion over 28.50% (Six months ended 30 June 2010: 28.91%. Year ended 31 December 2010: 28.42%) of shares in the Company, on behalf of their clients, and earned investment management fees of £87,254 (Six months ended 30 June 2010: £76,237. Year ended 31 December 2010: £157,732) during the period of which £87,254 (Six months ended 30 June 2010: £35,664. Year ended 31 December 2010: £42,090) was outstanding at the period end.  During 2011 SWIP earned a performance fee of £5,232 (Six months ended 30 June 2010: £Nil. Year ended 31 December 2010: £Nil) which was outstanding at the period end. The basis of calculation of these fees is detailed in note 4 of the annual financial statements.

 

The Company has appointed Kleinwort Benson (Channel Islands) Funds Services Limited to provide administrative and accounting services.  Administrative fees (including the accounting fee) for the period ended 30 June 2011 totalled £49,330 (Six months ended 30 June 2010: £50,000. Year ended 31 December 2010: £95,000) of which £49,330 (Six months ended 30 June 2010: £50,000. Year ended 31 December 2010: £45,000) was outstanding at the period end.

 

10.       Events after the reporting date

 

There have been no significant events after the reporting date which in the opinion of the Board of Directors require disclosure in the financial statements. 


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