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Perpetual Inc&Growth (PLI)

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Wednesday 16 June, 2004

Perpetual Inc&Growth

Final Results

                Perpetual Income & Growth Investment Trust plc                 

              Preliminary Announcement of Unaudited Final Results              

Chairman's Statement

Stock markets recovered strongly for a large part of the financial year under
review in response to the improving prospects for global economic recovery led
by the US and as investors looked for value in oversold stocks. I am pleased to
report that your company participated fully in the rally and during the twelve
months to 31 March 2004 the Company's share price rose by 45.5%. Over the same
period, the diluted net asset value per share (`NAV') rose by 46.3% and the
FTSE All Share Index by 26.6%. The discount widened slightly from 1.4% to 1.9%
at the year end.

The policy of concentrating on areas of the market, which offer access to
strong financial performance, through good cash flow, resilient profit
performance and secure dividends, at low valuations has served the Company well
over the year and will continue to be pursued over the medium term.


Your Board approved an early second interim dividend of 3.15p per ordinary
share in lieu of final, which was paid to shareholders on 2 April 2004. This
increased dividend was paid early in order to enable holders of the shares
through PEPs and ISAs to take advantage of the tax credit on dividends before
its abolition on 5 April 2004. In view of the special circumstances of this
year, no final dividend will be paid and we would expect the normal pattern of
dividends to resume for the next financial year. The net dividend per share for
the year was 5.25p compared with 5.00p in 2003.


The actual gearing of the Company was 16% at the year end. The policy is to
allow gearing to the level of 25 per cent for investment in companies where
there are stock specific opportunities. The gearing is not an expression of
confidence in the performance of the overall UK stockmarket but rather an
endorsement of the potential for selected stocks.

Investment Policy

In response to the publication of the Investment Entities (Listing Rules and
Conduct of Business) Instrument 2003 the Company confirms the intention to
invest no more than 15% of its gross assets in other listed investment
companies (including investment trusts). To date investment in such companies
has been minimal.

Exercising Voting Rights

The Board considers that your Company has a responsibility as a shareholder
towards ensuring that high standards of Corporate Governance are maintained in
the investee companies within the portfolio. Whilst this does not entail
intervening in daily management decisions, it does involve supporting high
standards for governance and, where necessary, taking the initiative to ensure
those standards are met. The principal means of putting shareholder
responsibility into practice is via the exercising of voting rights. As such,
your Company's voting rights are exercised on an informed and independent

Socially Responsible Investing

Your manager considers many different factors when evaluating potential
investments. As part of the overall assessment in constructing a portfolio a
company's policy towards the environment and social responsibility is
considered. The manager does not necessarily preclude an investment being made
in that company on these grounds alone.

Issuance of Ordinary Shares

On the 31 December 2003 385,375 ordinary shares were issued in order to satisfy
demand from the savings scheme, PEP and ISA for the reinvestment of dividends
under those schemes.

Warrants Exercise

As a consequence of the exercise of warrants 2,070,722 ordinary shares of 10p
each were issued on 15 September 2003.

As a result of these two issuances the total number of shares in issue is now

Special Business

Four items of special business are to be proposed at the Annual General Meeting
as special resolutions.

(i) Issue of up to 5% of share capital

First, your Board are seeking renewal of the authority granted last year to
issue new ordinary shares in the Company. This will allow the Directors
flexibility to issue new shares within the prescribed limits in a shorter
period than would otherwise be the case. This power will not be exercised at an
issue price below net asset value, so that the interests of existing
shareholders are not diluted.

(ii) Disapplication of Pre-emption Rights

Second, your Board are also seeking renewal of the authority to issue new
ordinary shares disapplying 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.

(iii) Buy-Back up to 14.99% of Share Capital

Third, your Board wishes to renew the authority to buy-back up to 14.99% of the
Company's issued ordinary shares. Acquisitions under this authority will be
subject to the restrictions referred to in the Notice of Annual General Meeting
and will only be made at market prices below the prevailing net asset value. No
such purchases were made in the accounting year just ended but we continue to
believe that share buy-backs can be a useful tool in maintaining and enhancing
shareholder value.

(iv) Articles

Resolution 9 seeks to adopt new Articles of Association for the Company.
Following a review of the Company's existing Articles, the Board considers it
appropriate to make a number of changes to them to bring them into line with
current practice and reflecting recent changes in legislation. The main
difference between the proposed new articles and the existing Articles of
Association are summarised in the Report and Accounts (to be published


After such spectacular returns over the year it is now time to sound a note of
caution. As I commented at the interim stage, government spending is increasing
therefore taxes are likely to rise. Interest rates are now rising, in an effort
to dampen house price inflation and the potential for more general inflation as
a result of nearly full employment. In addition, the consumer is heavily
indebted consumer and therefore may not be able to support the economy to the
extent seen over the last year.

While some economic support is evident in the US in the run up to the
Presidential Elections in November and similar political considerations are
likely in the run up to a UK General Election, sustainability of the current
rates of growth is questionable afterwards.

Our Manager will continue to search for companies with strong and sustainable
financial performance in undervalued areas of the market. These types of stock
are likely to have the resilience to perform in more challenging economic

Sir Patrick Sheehy

16 June 2004

Statement of Total Return (incorporating the revenue account)

for the year ended 31 March 2004

                                          2004                      2003          
                             Revenue   Capital   Total Revenue   Capital     Total
                               £'000     £'000   £'000   £'000     £'000     £'000
Gains/(Losses) on                  -   110,129 110,129       - (100,074) (100,074)
Foreign exchange gains             -     3,908   3,908       -       560       560
Income                        12,120         -  12,120  10,635         -    10,635
Investment management fee      (880)   (4,889) (5,769)   (734)   (1,712)   (2,446)
Other expenses                 (385)         -   (385)   (395)         -     (395)
Net return before finance     10,855   109,148 120,003   9,506 (101,226)  (91,720)
costs and taxation                                                                
Interest payable               (530)   (1,238) (1,768)   (670)   (1,564)   (2,234)
Return on ordinary            10,325   107,910 118,235   8,836 (102,790)  (93,954)
activities before tax                                                             
Tax on ordinary activities     (253)         -   (253)     (9)         -       (9)
Return on ordinary            10,072   107,910 117,982   8,827 (102,790)  (93,963)
activities after tax for the                                                      
financial year                                                                    
Dividends in respect of      (9,566)         - (9,566) (8,977)         -   (8,977)
ordinary shares                                                                   
Transfer (from)/to reserves      506   107,910 108,416   (150) (102,790) (102,940)
Return per ordinary share:                                                        
Basic                           5.6p     59.6p   65.2p    4.9p   (57.6)p   (52.7)p
Diluted                         5.4p                      4.8p                    

The revenue column of this statement is the profit and loss account of the

All revenue and capital items in the above statement derive from continuing

No operations were acquired or discontinued in the year.

Reconciliation of Movement in Shareholders' Funds

for the year ended 31 March 2004

                               2004      2003
                              £'000     £'000
Revenue return for the          506     (150)
Capital return for the      107,910 (102,790)
Issue of ordinary shares      2,692     2,798
Net movement in             111,108 (100,142)
Shareholders' funds                          
Opening Shareholders'       207,715   307,857
Closing Shareholders'       318,823   207,715

Balance Sheet

as at 31 March 2004

                                              2004     2003
                                             £'000    £'000
Fixed assets                                               
Investments                                374,215  246,458
Current assets                                             
Debtors                                      4,111    4,360
Cash at Bank                                 1,697        -
Creditors: amounts falling due within     (31,584) (13,525)
one year                                                   
Net current liabilities                   (25,776)  (9,165)
Total assets less current liabilities      348,439  237,293
Creditors: amounts falling due after      (29,616) (29,578)
more than one year                                         
                                           318,823  207,715
Capital and reserves                                       
Called up share capital                     18,237   17,991
Share premium account                      156,840  154,394
Other reserves                                             
Capital reserve - realised                 112,287   91,584
Capital reserve - unrealised                27,528 (59,679)
Revenue reserve                              3,931    3,425
Equity Shareholders' funds                 318,823  207,715
Net asset value per ordinary share                         
Basic                                       174.8p   115.5p
Diluted                                     166.2p   113.6p

Cash Flow Statement

for the year ended 31 March 2004

                                                             2004     2003
                                                        £'000        £'000
Cash inflow from operating activities                       8,119    5,159
Servicing of finance                                      (1,674)  (2,261)
Taxation                                                     (18)       35
Capital expenditure and financial investment             (16,631)    9,650
Equity dividends paid                                     (9,129)  (8,725)
Net cash (outflow)/inflow before management of liquid    (19,333)    3,858
resources and financing                                                   
Financing                                                   2,692    2,798
(Decrease)/increase in cash                              (16,641)    6,656
Reconciliation of net cash flow to movement in net debt                   
(Decrease)/increase in cash                              (16,641)    6,656
Exchange movements                                          3,401      434
Debenture stock non-cash movement                            (38)     (38)
Movement in net debt in the year                         (13,278)    7,052
Net debt at beginning of year                            (35,970) (43,022)
Net debt at end of year                                  (49,248) (35,970)

Notes to the Financial Statements

1. Income

                                  2004   2003
                                 £'000  £'000
Income from listed investments               
UK dividends                     9,563  9,136
Overseas dividends               1,699    564
UK unfranked investment income     857    832
- interest                                   
                                12,119 10,532
Other income                                 
Deposit interest                     1     91
Underwriting commission              -     12
                                     1    103
Total income                    12,120 10,635
Total income comprises:                      
Dividends                       11,262 10,532
Interest                           858     91
Other income                         -     12
                                12,120 10,635

2. Investment management fee

                                            2004                  2003      
                                 Revenue Capital Total Revenue Capital Total
                                   £'000   £'000 £'000   £'000   £'000 £'000
Investment management fee            749   1,748 2,497     625   1,457 2,082
Performance-related investment         -   2,413 2,413       -       -     -
management fee                                                              
Irrecoverable VAT thereon            131     728   859     109     255   364
                                     880   4,889 5,769     734   1,712 2,446

(i) INVESCO Asset Management Limited (`IAML') provide investment and
administration services to the Company under a novation agreement dated 27
December 2001. This was transferred, on the same terms, from an agreement with
Perpetual Portfolio Management Limited effective from 20 February 1996. The
agreement is terminable by either party giving not less than one year's notice.
Under the agreement, the Manager receives a management fee of 0.1875 per cent.
Per quarter of the Company's funds under the management as defined in the
agreement. At 31 March 2004 £814,000 (2003: £530,000) was due for payment in
respect of investment management fee.

(ii) A performance-related fee is payable annually in arrears to the Manager,
if the Company's performance exceeds the FTSE All-Share Index. The
performance-related fee is equal to 10 per cent. of the value of any
outperformance, but may not exceed 0.75 per cent. of the value of the Company's
funds under management at the relevant performance fee calculation date (which
is usually the Company's Balance Sheet date). Any such performance-related fee
is based on the outperformance over the benchmark index after taking into
account any previous underperformance. At the year end £2,835,000 (2003: nil)
was due for payment in respect of performance-related fee.

3. Expenses

                                      2004                  2003      
                           Revenue Capital Total Revenue Capital Total
                             £'000   £'000 £'000   £'000   £'000 £'000
Directors' fees                 59       -    59      49       -    49
Auditor's remuneration for      16       -    16      15       -    15
- non audit                      3       -     3       3       -     3
Other expenses                 307       -   307     328       -   328
                               385       -   385     395       -   395

4. Interest payable

                                             2004                  2003      
                                  Revenue Capital Total Revenue Capital Total
                                    £'000   £'000 £'000   £'000   £'000 £'000
Interest payable on borrowings                                               
repayable as follows:                                                        
Bank overdrafts repayable within       90     210   300     210     492   702
1 year but not by instalments                                                
Debenture stock repayable after 5     440   1,028 1,468     460   1,072 1,532
years but not by instalments                                                 
                                      530   1,238 1,768     670   1,564 2,234

5. Taxation

(a) Current tax charge

                         2004                  2003      
              Revenue Capital Total Revenue Capital Total
                £'000   £'000 £'000   £'000   £'000 £'000
Overseas          253       -   253      63       -    63
Prior year          -       -     -    (54)       -  (54)
                  253       -   253       9       -     9

(b) Reconciliation of current tax charge

                                                2004    2003
                                               £'000   £'000
Revenue on ordinary activities before         10,325   8,836
Theoretical tax at UK Corporation Tax rate     3,098   2,651
of 30% (2003: 30%)                                          
Effects of:                                                 
- UK dividends which are not taxable         (2,869) (2,741)
- Revenue account expenses in excess of        1,686   1,073
taxable income                                              
- Adjustment in respect of prior years             -    (54)
- Irrecoverable overseas tax suffered            177      63
- Management expenses charged to capital     (1,839)   (983)
                                                 253       9

(c) Factors that may affect future tax changes

The Company has excess management expenses of £37,253,000 (2003: £31,674,000)
that are available to offset future taxable revenue. A deferred tax asset has
not been recognised in respect of these expenses since they are recoverable
only to the extent that the Company has sufficient future taxable revenue.

6. Dividends on ordinary shares

                                              2004  2003
                                             £'000 £'000
Interim dividend paid 2.10p per ordinary     3,821 3,669
share (2003: 2.05p)                                     
Interim dividend payable of 3.15p per        5,745     -
ordinary share (2003: nil)                              
Final dividend of nil p per ordinary share       - 5,308
(2003: 2.95p)                                           
                                             9,566 8,977

7. Return per ordinary share

Basic revenue return per ordinary share is based on the net revenue on ordinary
activities after taxation and on 181,049,475 (2003: 178,407,795) shares being
the weighted average number of shares in issue.

Basic capital return per ordinary share is based on the net capital gains on
ordinary activities after taxation and on 181,049,475 (2003: 178,407,795)
shares being the weighted average number of shares in issue.

The diluted returns per ordinary share have been calculated by assuming
7,579,696 (2003: 6,672,438) shares were issued under warrants on 1 April 2003.
This produces a weighted average of 188,608,462 (2003: 185,080,233) shares.
There has been no effect on profit. In accordance with the SORP, only diluted
revenue returns are shown.

The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 March 2004 or 2003. The financial
information for 2003 is derived from the statutory accounts for 2003 which have
been delivered to the Registrar of Companies. The auditors have reported on the
2003 statutory accounts and their report was unqualified and did not contain a
statement under s237(2) or (3) of the Companies Act 1985. The statutory
accounts for 2004 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 20 July 2004 at 2.00 pm.

By order of the Board

INVESCO Asset Management Limited - Secretaries


Adam Cooke Tel: 020 7065 3135

Tim Mitchell Tel: 020 7065 3182


a d v e r t i s e m e n t