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UK Select Trust Ld (UKT)

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Thursday 13 March, 2008

UK Select Trust Ld

Final Results

UK Select Trust Limited
13 March 2008

                            UK SELECT TRUST LIMITED

                 Unaudited Preliminary Announcement of Results

                      For the year ended 31 December 2007

The Directors are pleased to present the preliminary announcement for the
Company for the year ended 31 December 2007.


For the year ended 2007

Review of 2007 Performance

2007 was another positive year for the UK equity market and also for the
shareholders of UK Select Trust.  The total return of 5.7% produced by the
Company exceeded the FTSE All-Share index, which returned 5.3% on a total return
basis.  Over the last three years, the Company has delivered a total return of
74.2% compared with a 50.1% total return in the FTSE All-Share index.

The Company's portfolio continued to be managed on a very active basis during
the year.  Strong stock selection combined with the positive impact of gearing
in a rising market enabled the Company to outperform its benchmark for the third
consecutive year.

Share Price and discount

The share price fell by 7% over the year reflecting an increase in the discount
at which your Company's shares trade relative to their net asset value.  At the
end of the year the discount stood at 18%.  The pronounced widening in the
discount is an issue experienced throughout the investment trust sector. The
Board will continue its policy of share buybacks to help reduce this discount.


The investment manager's positive stance towards the UK equity market resulted
in the Company employing an average gearing level of 16% during the year.

Earnings and dividend per share

Earnings per share for the year amounted to 3.96p (2006: 3.12p) and, on behalf
of the Board, I am pleased to recommend a final dividend 2.55p (2006: 2.40p)
which if approved, will be payable on 2 May 2008. This is in addition to the
interim dividend of 0.85p (2006: 0.85p), bringing the total dividend for the
year to 3.40p (2006: 3.25p). The Directors also propose that ordinary
shareholders should be offered the right to elect to receive new ordinary shares
in lieu of the cash final dividend.  Shares will be marked ex-dividend on 19
March 2008 and the record date for the final dividend will be 25 March 2008.


The outlook for global equity markets is more uncertain than it has been for
several years.  While significant monetary stimulus is being injected into the
US economy, the short-term direction of global demand will be heavily influenced
by the resilience of major emerging market economies such as China and India in
the face of a slowdown in Western economic growth.

However, the Board remains confident that the investment manager's process will
continue to identify companies with strong business models and trading on
attractive valuations which will deliver superior investment returns over the
long term for shareholders.

JM Le Pelley


                          INVESTMENT MANAGER'S REPORT

                      For the year ended 31 December 2007


UK equities delivered their fifth consecutive year of positive returns in 2007
with the FTSE All-Share Index rising by 5.3% on a total return basis.  However,
this masked a significant deterioration in equity returns in the second half of
the year fuelled by concerns over the mounting credit crisis in Europe and the

The Company's net asset value outperformed the benchmark FTSE All-Share Index
during the period, returning 5.7% on a total return basis as a result of strong
stock selection and a modest benefit from the Company's gearing.

Global Background

The global economic environment remained broadly supportive for equity markets
through the early months of 2007 with positive earnings momentum across many
sectors of the market accompanied by a steady flow of merger and acquisition
activity.  Whilst economic growth was showing signs of fatigue in the UK and US,
emerging markets such as China and India continued to expand rapidly.

The second half of the year was dominated by the escalating credit crisis in
Europe and the US.  Liquidity conditions within debt markets deteriorated
rapidly through the final quarter of the year as banks aggressively tightened
their lending criteria.  This contraction in credit markets fuelled concerns
that economic growth forecasts in both the UK and US would come under further
downward pressure.

The US economic agenda continued to be dominated by the domestic housing market.
  House price falls across many states accelerated through the year prompting
the Federal Reserve to cut interest rates in August for the first time since mid
2003.  It became clear through the fourth quarter of the year that the magnitude
of the banking sector write-downs were much greater than originally feared,
while the housing market outlook continued to worsen.  These factors combined to
force the Federal Reserve to act decisively and slash the target cost of
borrowing from 5.25% in August to the current level of 3.0%.

The sustainability of current growth rates in economies such as China, India and
Russia, in the face of a pronounced economic downturn in the West, has been a
major source of debate in equity markets.  Whilst it remains too early to have
definitive answers, the unrelenting strength of commodity markets adds much
weight to the view that emerging markets can de-couple in economic terms from
their Western counterparts.

The UK Stock Market

The fifth consecutive annual gain in the FTSE All-Share Index was most notable
for the change in leadership at the market capitalisation level.  The FTSE 100
Index (+7.4%) outperformed both the Mid Cap (-2.5%) and Small Cap (-10.6%)
indices for the first time since 2002.

This divergent performance across the market capitalisation spectrum reflected a
number of investment themes at work during the year.  The mining sector, one of
the largest constituents of the FTSE 100, delivered a gain of 52% over the year
with strong commodity prices and corporate activity boosting share prices. Rio
Tinto was the largest winner following a take-over approach from rival, BHP

The FTSE 100 also benefited from a perceived flight to quality as investors
became increasingly cautious on the outlook for equity markets.  Northern Rock's
approach to the Bank of England for emergency funding in September shook the
equity market and raised broader question marks over the level of gearing being
employed across the banking sector in general.  Sectors such as Tobacco,
Telecommunications and Beverages benefited from their safe haven status as
investors switched cash from small and mid sized companies which had performed
so strongly over the past four years.

The largest positive contributor to the Company's performance during the year
was KSK Power, a leading Indian power project developer and operator which
floated on the AIM market in November 2006.  The group is very well placed to
exploit the vast growth opportunity that exists from the structural shortage of
power in India. KSK continued to execute its strategy successfully through the
year sending its shares 130% higher.  The holdings in BG Group and Hardy Oil &
Gas also made significant positive contributions to performance.

The Company once again benefited from merger and acquisition activity with the
holdings in ICI, Scottish & Newcastle and Abbot Group the subjects of take-over
bids during the year at significant share price premiums.

The portfolio's position in the house-building sector was the largest detractor
from performance in 2007.  The holdings in Persimmon and Berkeley Group both
suffered from negative sentiment created by the downturn in the US housing
market combined with the tightening in lending conditions in the UK financial
system following the Northern Rock fall out.  This resulted in a sharp fall in
the number of mortgage approvals and in turn curtailed demand for new build
housing.  However, the UK housing market remains structurally under-supplied and
while earnings have come under pressure in the short term valuations do not
reflect the positive longer term industry dynamics.

Portfolio activity

The Company continues to be managed on a very active basis.  Major additions to
the portfolio during the year included bus company, First Group, building
contractor, Balfour Beatty and business process outsourcer, Capita Group.  The
positions in Wolseley, Yell Group and ICI were among those sold to fund these
new positions.  The Company's holding in Northern Rock was sold in the first
quarter of the year prior to the share price fall.

Portfolio construction continues to be shaped by rigorous fundamental analysis
at the stock-specific level. At present this translates into overweight
positions relative to the Company's benchmark in Resources, Construction and
Support Services. The major underweight positions include Pharmaceuticals,
Utilities and Food & Drug Retailers.


Global stock markets have endured a difficult start to 2008.   The UK has been
no exception to this with the FTSE All-Share Index tumbling by 8% in January.
Persistent concerns over the banking sector and the magnitude of book write
downs, particularly in the US, have fuelled high levels of volatility in equity
markets across the globe.  The Federal Reserve's aggressive monetary easing has
been well received by financial markets, though doubt remains as to how long it
takes for this action to achieve the goal of stimulating demand.

The Company has made an encouraging start to 2008 relative to its benchmark and
the portfolio will continue to be managed actively to capitalise on the share
price opportunities afforded by the current market volatility.


For the year ended 31 December 2007

                                                        2007                                      2006
                                       Revenue       Capital        Total        Revenue        Capital         Total
                                            £             £             £             £              £              £
Gains/(losses) on investments
Net realised gains on financial
assets and liabilities held at
fair value through profit or loss           -          3,515         3,515            -           4,811          4,811
Net changes in unrealised
(depreciation)/appreciation on
financial assets and liabilities
held at fair value through profit
or loss                                     -         (2,088)       (2,088)           -           1,299          1,299

Net foreign exchange gain                   -              1             1             -              -              -
                                            -          1,428         1,428             -          6,110          6,110

Other Income                             1,241          -            1,241         1,041           -             1,041

Investment management fees                  47           143           190            43            130            173
Performance fee                             20            62            82            20             60             80
Administration fees                         80             -            80            75              -             75
Registrars' fees                            12             -            12            11              -             11
Auditor's fees                              11             -            11            11              -             11
Director's fees                             73             -            73            67              -             67
Other expenses                              91          -               91            86              -             86
Total operating expenses before
finance costs                              334           205           539           313            190            503

Operating profit before
finance costs and tax                      907         1,223         2,130           728          5,920          6,648

Finance costs
Interest payable                            83           251           334            74            223            297

Profits before tax                         824           972         1,796           654          5,697          6,351
Withholding tax expense                      -             -             -             6              -              6

Profit after Tax

 Attributable to holders of
equity shares from operations              824           972         1,796           648          5,697          6,345

Basic & diluted return per
ordinary share                           3.96p         4.67p         8.63p         3.12p         27.44p         30.56p

The total column of this statement is the Income Statement 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.


For the year ended 31 December 2007

                           Equity         Own        Share       Capital      Capital        Capital   Revenue    Total
                            Share     held in      premium    redemption    reserve -       reserve-   reserve
                          Capital    treasury                    reserve     realised     unrealised
                            £'000       £'000        £'000         £'000        £'000          £'000     £'000    £'000

At 1 January 2007           2.083           -        5,422         4,308       11,079          5,369     3,578   31,839

Shares repurchased during       -        (426)            -             -            -              -         -    (426)
the year

Premium arising on share
- 2006 final dividend           -         189             -             -            -              -         -      189
- 2007 interim dividend         -          61             -             -            -              -       (1)       60
Dividends and scrips (Note      -           -             -             -            -              -     (677)    (677)
Net profit                      -           -             -             -        3,060        (2,088)       824    1,796

At 31 December 2007         2,083        (176)        5,422         4,308       14,139          3,281     3,724   32,781

There are no other recognised income and expenses

For the year ended 31 December 2006

                         Equity     Own shares        Share       Capital     Capital        Capital   Revenue    Total
                          Share        held in      premium    redemption     reserve       reserve-   reserve
                        Capital       treasury                    reserve    realised     unrealised
                          £'000          £'000        £'000         £'000       £'000          £'000     £'000    £'000

At 1 January 2006         2,073              -        5,205         4,297       6,813          4,070     3,572   26,030

Shares repurchased during   (11)             -            -            11       (136)              -         -    (136)
the year

Premium arising on share
- 2005 final dividend        15              -          164             -           -              -         -      179
- 2006 interim                6              -           53             -           -              -         -       59
Dividends and scrips          -              -            -             -           -              -     (642)    (642)
(Note 3)
Net profit                    -              -            -             -       4,402          1,299       648    6,349

At 31 December 2006       2,083              -        5,422         4,308      11,079          5,369     3,578   31,839

There are no other recognised income and expenses


As at 31 December 2007

                                                                                           2007             2006
                                                                                          £'000            £'000
Non-Current Assets
Financial assets at fair value through profit or loss (Cost:                             36,289           36,494
33,007) (note 4)

Total Non-Current Assets                                                                 36,389           36,494

Current Assets
Receivable from brokers                                                                   1,466              363
Other receivables                                                                           233              117
Cash at bank                                                                                336              422
Total Current Assets                                                                      2,035              902
Total Assets                                                                             38,324           37,396

Current Liabilities
Payables                                                                                    343              357

Total Current Liability                                                                     343              357

Non-Current Liabilities
Borrowings                                                                                5,200            5,200

Total Non-Current Liabilities                                                             5,200            5,200

Total Liabilities                                                                         5,543            5,557

Net assets attributable to holders of equity shares                                      32,781           31,839

Equity Shareholders' Funds
Share Capital                                                                             2,083            2,083
Own shares held in treasury                                                               (176)                -
Reserves                                                                                 30,874           29,756

                                                                                         32,781           31,839

Number of ordinary shares in issue (net of treasury shares)                          20,712,071       20,830,484

Net asset value per share                                                               158.27p          152.85p


For the year ended 31 December 2007

                                                                                2007             2006
                                                                               £'000            £'000
Cash flows from operating activities
Payment on purchase of investments                                         (120,860)         (64,803)
Proceeds from sale of investments                                            121,390           65,231
Cash received from investments                                                 1,081              993
Other income                                                                      43               32
Investment management fee paid                                                 (190)            (164)
Other cash payments                                                            (395)            (324)
Withholding tax paid                                                               -              (6)

Net cash inflow from operating activities                                      1,069              959

Cash flows from financing activities
Interest paid                                                                  (301)            (294)
Share repurchase                                                               (426)            (136)
Equity dividends                                                               (428)            (404)

Net cash outflow from investing activities                                   (1,155)            (834)

Net (decrease)/increase in cash and                                             (86)              125
cash equivalents

Cash and cash equivalents at the beginning of the year                           422              297

Cash and cash equivalents at the end of the year                                 336              422


Note 1 - Basis of Preparation

The unaudited preliminary announcement for the year ended 31 December 2007 has
been prepared upon the basis of the financial accounting policies set out in
Note 1 of the 2006 Annual Report and Financial Statements. Since the last
published Financial Statements the Company has transitioned to International
Financial Reporting Standards (IFRS).  The transition to IFRS did not involve
any changes in accounting practice or any restatement of figures.  Additional
disclosures are required due to IFRS 7 in respect of the Company's financial
instruments and management of capital.  However, these are not required for the

Whilst the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRSs), this announcement does not
itself contain sufficient information to comply with IFRSs.  The Company expects
to publish full financial statements that comply with IFRSs in April 2008.

Note 2 - Preliminary Announcement

The financial Information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 December 2007 or 2006.  The
financial Information for the year ended 31 December 2006 is derived from the
statutory accounts for that year. The auditors reported on those accounts; their
report was unqualified and did not contain a statement under Section 65(3) of
the Companies (Guernsey) Law, 1994.  The audit of the statutory accounts for the
year ended 31 December 2007 is not yet complete.  These accounts will be
finalized on the basis of the financial information presented by the Directors
in this preliminary announcement.
Note 3 - Dividends

                                                                                         2007            2006
                                                                                        £'000           £'000
Equity Dividends
Ordinary Shares
Interim of 0.85p (gross) on 20,806,410 shares for 2007 paid in
2007 (2006 paid in 2006: 0.85p (gross) on 20,773,284 shares)                              177             176

Final dividend for 2006: 2.40p (gross)on 20,825,333 shares paid in 2007
(2005 paid in 2006: 2.25p (gross) on 20,702,880 shares)                                   500             466
                                                                                          677             642

An additional dividend of 2.55p been proposed by the Board of Directors on 13 March 2008 for the year ended
31 December 2007 which is not reflected in these financial statements.

Note 4 - Investments
                                                               2007                          2006
                                                      Fair Value   % of net       Fair Value       % of net
                                                                    assets                          assets
                                                            £'000    £'000           £'000           £'000

Financial assets at fair value through profit or loss

Designated as at fair value through profit or

- Listed equity securities                                 36,289      110.65          36,494          114.62
                                                           36,289      110.65          36,494          114.62

Movement on financial assets and liabilities at fair value through profit or loss

                                                                                         2007            2006
                                                                                        £'000           £'000

Opening book cost                                                                      31,125          26,658
Opening unrealised appreciation                                                         5,369           4,070
Opening valuation                                                                      36,494          30,728

Purchases at cost                                                                     121,906          66,096
Sales - proceeds                                                                    (123,538)        (66,440)
         - realised gains on sales                                                      3,515           4,811
(Decrease)/Increase in unrealised appreciation                                        (2,088)           1,299
Closing valuation                                                                      36,289          36,494

Closing book cost                                                                      33,008          31,125
Closing unrealised appreciation                                                         3,281           5,369

Closing valuation                                                                      36,289          36,494

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                            

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