Interim Results
17 Novembre 2003 - 8:00AM
UK Regulatory
RNS Number:1161S
F&C Income Growth Inv Tst PLC
17 November 2003
EMBARGOED UNTIL 7.00AM ON MONDAY 17 NOVEMBER 2003
Contact: Julian Cane, F&C Management Ltd, 020 7628 8000/Emma Chilvers, Lansons
Communications, 020 7294 3692
F&C INCOME GROWTH INVESTMENT TRUST PLC
Unaudited Statement of Results
for the half-year ended 30 September 2003
Highlights
* After three very difficult years, the last six months has seen a
strong rally in the UK stock market.
* During the six months to 30 September, net assets per share rose
14.0%.
* Dividends for the six months are increased by 2.9% to 1.75 pence per
share.
* Neil Dunford has been appointed as a Director.
SUMMARY OF RESULTS
Attributable to equity shareholders 30 September 2003 31 March 2003 %
change
Net assets #55.64m #44.78m 24.2
Net assets per share 124.31p 109.77p 13.2
Net assets per share - diluted+ 124.31p 109.01p 14.0
Share price 122.50 114.50p 7.0
FTSE 350 Index 2063.08 1777.12 16.1
6 months to 6 months to %
30 September 2003 30 September 2002 change
Earnings per share 2.49p 2.35p 6.0
Dividends per share 1.75p 1.70p 2.9
+ Calculated per Association of Investment Trust Companies' method
Chairman's Statement
After three very difficult years for stockmarkets, the six months to 30
September 2003 benefited from rising share prices. During this period, the FTSE
350 Index rose 16.1%, while your Company's net asset value (NAV) per share and
the share price increased by 14.0% and 7.0% respectively. Dividends for the six
months have increased by 2.9% to 1.75 pence per share.
Capital Performance
The strong rise in stockmarkets was a response to the rapid end to the initial
fighting in Iraq, the hope of a return to better economic growth and also a
reflection of the steep and prolonged falls that equity markets had previously
suffered. Those sectors that performed most strongly were in general those most
expected to benefit from a sharp economic recovery, while less cyclical, more
defensive sectors lagged. This pattern was a reversal of the trend that had
ruled since stockmarkets peaked in 2000. Although the portfolio is broadly
spread, it has a bias towards defensive areas of the market and this caused the
rise in NAV per share to lag the rise in the market.
The defensive qualities of the portfolio may have restricted the rise in NAV
over the last six months, but they have been vital over the medium- and
long-term in achieving considerably better performance than our benchmark, the
FTSE 350 Index.
Share Issues / Discount
During the period, 4.0 million new shares were issued. 3.5 million of these were
on the final conversion of warrants to shares and 0.5 million were issued at a
small premium to NAV to satisfy demand from investors. The conversion of
warrants resulted in 1.3 million shares being sold in the market in August. This
abnormally large volume of shares to be sold had an inevitable short-term impact
on the share price. At 31 March 2003, the share price traded at a premium of 5%
to NAV per share, while at the end of July, when the warrants converted, the
shares traded at a discount of more than 8%. The shares were taken up by other
investors, removing the short-term oversupply and by 30 September the shares had
recovered much of the lost ground and traded at a discount of 1.5% to NAV; this
is regarded as a satisfactory outcome.
Dividends
A first quarterly dividend of 0.85 pence per share was paid on 22 August 2003.
The Board has declared a second quarterly dividend of 0.90 pence to be paid on
19 December 2003. Total dividends of 1.75 pence per share for the first half of
the year are an increase of 2.9% on the corresponding period last year. This
rate of increase is slightly ahead of the rate of underlying inflation of 2.8%
over the year to September.
The Board expects to achieve the Company's objective of dividend growth faster
than the rate of inflation for the year as a whole through an increase in the
total of the two quarterly dividends for the second half of the year. This would
continue the Company's record of increasing its dividend ahead of the rate of
inflation every year since launch.
The increased number of shares in issue as a result of the warrant conversion is
likely to result in the full year dividend not being fully covered by earnings.
This is because the dividends that the Company is aiming to pay for the second
half of the year are rather greater than the income that will be earned on the
money received in July from the warrantholders. Any shortfall will be more than
covered by the Company's revenue reserve, which at the end of last financial
year stood at #368,000.
New Director
The Board is delighted to announce the appointment of Neil Dunford on 14
November 2003 as a Director of the Company. Neil has had a very successful
career in the City as an investor, most recently as the Executive Chairman of UK
institutional business at Deutsche Asset Management. The Board looks forward to
the benefit of his wisdom and experience in the years to come.
Outlook
The economic outlook in the UK appears rather better than most analysts had
assumed at the start of the year. However, most of the growth in the UK economy
has arisen through increased consumer and government spending. Both of these
have been financed by massively increased borrowing and the Bank of England is
now concerned about the accelerating debt burden. The Bank will have to tread a
very fine line when increasing interest rates, aiming to stop the rapid build-up
of new debt, without causing consumer expenditure to fall too sharply.
Continued emphasis on costs, together with the relative strength of the UK
economy, have brought about a strong recovery in company earnings. After the
rally in markets, equity valuations no longer appear as cheap as they were, but
are still broadly in line with the long-run averages. Until it becomes clearer
whether economic and earnings growth continue strongly, or whether the impact of
increasing interest rates slows the recovery, the portfolio will remain fairly
defensively positioned.
Robin Herbert
November 2003
Unaudited Statement of Total Return (incorporating the Revenue Account*)
for the half-year ended 30 September
September 2003 September 2002
Revenue Capital Total Revenue Capital Total
#'000s #'000s #'000s #'000s #'000s #'000s
Gains and (losses) on investments - 6,599 6,599 - (14,210) (14,210)
Income 1,286 - 1,286 1,131 - 1,131
Management fee (92) (92) (184) (91) (91) (182)
Other expenses (140) (3) (143) (96) (1) (97)
Net return before finance costs and 1,054 6,504 7,558 944 (14,302) (13,358)
taxation
Interest payable and similar charges - - - - - -
Return on ordinary 1,054 6,504 7,558 944 (14,302) (13,358)
activities before taxation
Taxation on ordinary activities - - - - - -
Return attributable to equity 1,054 6,504 7,558 944 (14,302) (13,358)
shareholders
Dividends on ordinary shares
(equity): (763) - (763) (687) - (687)
Amount transferred to/(from) reserves 291 6,504 6,795 257 (14,302) (14,045)
Return per ordinary share - pence 2.49 15.33 17.82 2.35 (35.63) (33.28)
Revenue return per ordinary share
(diluted) - pence + n/a n/a 2.31 n/a n/a
* The revenue column of the statement is the profit and loss account of the
Company.
+ There is no dilution.
All revenue and capital items in the above statement derive from continuing
operations.
Unaudited Balance Sheet
30 September 2003 30 September 2002 31 March 2003
#'000s #'000s #'000s
Fixed assets
Investments 51,291 45,969 44,761
Current assets
Debtors 868 386 567
Cash at bank and short-term deposits 4,424 1,264 261
5,292 1,650 828
Current liabilities
Creditors: amounts falling due within one
year: (944) (483) (805)
Net current assets 4,348 1,167 23
Net assets 55,639 47,136 44,784
Capital and reserves
Called up equity share capital 11,189 10,100 10,200
Share premium 12,623 9,169 9,552
Capital redemption reserve 1,020 1,020 1,020
Special reserve 16,373 16,373 16,373
Warrant reserve - 1,202 1,202
Non distributable reserve 1,202 - -
Capital reserves 12,573 8,620 6,069
Revenue reserve 659 652 368
Total equity shareholders' funds 55,639 47,136 44,784
Net asset value per ordinary share
Basic - pence 124.31 116.67 109.77
Diluted - pence 124.31 115.78 108.61
Unaudited Cash Flow Statement
for the half-year ended 30 September
2003 2002
#'000s #'000s
Net cash inflow from operating
activities 1,043 864
Interest paid (1) -
Taxation - -
Net cash (outflow)/inflow from
financial investment (29) 16
Equity dividends paid (1,025) (964)
Net cash inflow/(outflow) before
use of liquid resources and
financing 12 (84)
(Increase)/decrease in short-term
deposits (4,000) 100
Net cash inflow
from financing 4,175 391
Increase in cash during the period 163 407
The Directors have declared a second quarter dividend of 0.90p (2002: 0.85p) per
share payable on 19 December 2003 to shareholders registered on 28 November
2003.
The results for the six months to 30 September 2003, which are unaudited and set
out in this announcement, constitute non-statutory accounts within the meaning
of Section 240 of the Companies Act 1985. They have been prepared on the basis
of the accounting policies set out in the Company's financial statements at 31
March 2003. The latest published accounts which have been delivered to the
Registrar of Companies are for the year ended 31 March 2003. The report of the
auditors thereon was unqualified and did not contain a statement under Section
237 of the Companies Act 1985. The abridged financial statements shown above for
the year ended 31 March 2003 are an extract from those accounts.
The Interim Report & Accounts will be posted to shareholders towards the end of
November 2003. Copies may be obtained during normal business hours from the
Company's Registered Office, Exchange House, Primrose Street, London EC2A 2NY.
By order of the Board
F&C Management Limited - Secretary
14 November 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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