RNS Number : 5599Z
New Star Financial Opp Fd Ltd
22 July 2008
New Star Financial Opportunities Fund Limited
Announcement of Half Yearly Results for the six months to 31 May 2008
Company Information
Directors
Martyn Chambers (Chairman)
George Baird Christopher Fish
Nigel Taylor Julian Tregoning
Investment Manager
New Star Asset Management Limited
1 Knightsbridge Green, London SW1X 7NE
Telephone: 020 7225 9200 Facsimile: 020 7225 9300 Website: www.newstaram.com
(Regulated by the Financial Services Authority)
Administrator, secretary and registered office
Elysium Fund Management Limited
PO Box 650, 2nd Floor, No. 1 Le Truchot, St. Peter Port, Guernsey GY1 3JX
Registrar
Capita Registrars (Guernsey) Limited
Longue Hougue House, St. Sampsons, Guernsey GY2 4JN
Auditors
KPMG Channel Islands Limited
PO Box 20, 20 New Street, St. Peter Port, Guernsey GY1 4AN
Prime Broker
Credit Suisse Securities (Europe) Limited
2nd Floor, One Cabot Square, Canary Wharf, London E14 4QJ
Bankers
HSBC Bank PLC
13 High Street, St. Peter Port, Guernsey GY1 3AT
Registered number
Registered in Guernsey No. 37630
Principal Objective and Investment Policy
On 11 December 2007, at an Extraordinary General Meeting, Ordinary Shareholders adopted a special resolution to change the Investment
Policy of New Star Financial Opportunities Fund Limited ("the Company").
The investment objective of the Company is to provide Shareholders with a high level of income and the potential for capital and income
growth.
The Company will seek to achieve its investment objective by investing predominantly in the equity, debt or other securities of listed
European and UK financial companies. The Company may invest up to 25 per cent. of its total assets (at the time of purchase) in financial
companies listed outside Europe and the UK.
The Company also may invest up to 10 per cent. of its total assets (at the time of purchase) in unquoted financial securities and
limited partnerships, which themselves invest in financial companies.
Individual holdings will be limited to 7.5 per cent. of the total assets (at the time of purchase) and the Company will not invest more
than 10 per cent. of the total assets (at the time of purchase) in other investment companies.
Apart from normal hedging activities, the Company may enter into short sale transactions which shall be limited to 20 per cent. of the
total assets in aggregate with a limit on short sales of individual stocks of 5 per cent. of total assets.
The Company will maintain gearing in most market conditions, with borrowing limited to 50 per cent. of total assets at the time of
drawdown, other than for short-term settlement for cashflow purposes.
Changes to the Capital Structure
On 11 December 2007 the subordinated loans totalling �41,572,440 were repaid to NSF Securities Limited and ZDP Shareholders received
their final capital entitlement of 168.48p per ZDP Share either by way of cash or accumulation units in New Star Diversified Absolute Return
Fund, an authorised open-ended unit trust. NSF Securities Limited was voluntarily wound up on 11 December 2007.
Following repayment on 11 December 2007 of the ZDP Shares, gearing is provided through a credit facility under a prime broker agreement
with Credit Suisse Securities (Europe) Limited. As a result the Company has been re-categorised as a conventional investment company.
On 11 December 2007 at an Extraordinary General Meeting, Ordinary Shareholders approved a series of special resolutions changing the
Company's Articles of Association and thus allowing proposals to implement a reconstruction of the Company and a Tender Offer to purchase up
to 50% of the Company's issued share capital.
The proposals included:
* Restatement of the Company's investment objectives;
* Changing the benchmark for measuring Company performance to the Dow Jones STOXX 600 Financials Index;
* Introducing an annual tender taking powers to buy back Shares;
* Introducing a performance fee for the Manager in addition to its annual management fee;
* Reducing the nominal value of shares from 25p each to 0.1p each;
* Cancelling the share premium account and transferring those funds to a distributable reserve;
* Implementing a Tender Offer in respect of 50% of the Company's issued share capital;
* Postponing until the Annual General Meeting in 2018, the obligation for the Board to propose an ordinary resolution that the
Company should continue as an investment company; and
* Authorising the purchase of up to 10% of the Ordinary Shares in issue and hold them as treasury shares.
Results of the Tender Offer
A Tender Price was calculated as 68.0781p, being 97% of the Tender NAV on the Calculation Date (the close of business on 14 December
2007).
A total of 27,579,693 Ordinary Shares were tendered under the Tender Offer, representing 44.8% of the Company's issued share capital. Of
the tendered shares 4,212,625 Shares were sold in the market under a matching facility and the balance of 23,367,068 Shares were repurchased
by the Company. Of the shares repurchased, 4,236,992 Shares will be held in treasury and 19,130,076 Shares cancelled.
On 19 December 2007, following the completion of the Tender Offer, the Company announced that it had 42,369,924 Shares in issue, of
which 4,236,992 were held in Treasury. Accordingly, the total voting rights attaching thereto was 38,132,932.
Financial Highlights
Performance - Total Return % Change
Net Asset Value -7.6
Ordinary Share price -7.4
Dow Jones STOXX 600 Financials Index* -8.9
FTSE Financials Index -12.6
* Sterling equivalent
Ordinary Shares As at 31 May 2008 As at 30 November 2007 % Change
Net Asset Value 63.86p 71.63p -10.8
Mid-market price 59.00p 66.25p -10.9
Discount 7.6% 7.5% -
Revenue 1 December 2007 to 1 December 2006 to
31 May 2008 31 May 2007 % Change
Earnings per Ordinary Share 3.35p 2.61p 28.4
Dividends per Ordinary Share 2.35p 2.20p 6.8
Chairman's Statement
In my last statement I told you of the successful reconstruction of New Star Financial Opportunities Fund Limited ('NSOF') following
repayment of the ZDP shares. NSOF is now a conventional investment company with 42,369,924 Ordinary Shares in issue of which 4,236,992 are
held in Treasury. The discount to NAV on 31 May 2008 was 7.6%.
Performance
Financial markets have been extremely volatile in the last six months and this is reflected in the indices; the Dow Jones STOXX 600
Financials Index was down 8.9% and the FTSE Financials Index by 12.6%; our Fund, with its focus on financials, fell by 7.6% total return. We
appear to have avoided some of the worst pitfalls, such as the UK Clearers. Our broad mix of fixed income and financial equities currently
yields 7.8%.
Dividends
Two dividends, totalling 2.35p per Ordinary Share, were declared in the half year. After deducting the second interim dividend of 1.10p
per Ordinary Share declared in June, NSOF had revenue reserves of �1.71 million, or about 4.48p per Ordinary Share. The Board is
particularly concerned to try to ensure that the reserves are sufficient to meet the risk of income fluctuations year on year.
Board
I will be retiring as Chairman in September 2008 and the Board has unanimously elected Julian Tregoning as my successor. This will
require an Extraordinary General Meeting to amend the Articles of Association to allow his appointment as they currently prohibit a UK
resident as Chairman.
I have been Chairman for eight years during some difficult times and I am grateful to all our Board members and our managers for their
support and hard work. I attach importance to Board continuity and experience and we are fortunate to have both in seeking to achieve the
investment objectives of the Company by providing for its shareholders high levels of income and the potential for capital and income
growth.
Market Background
The market background over the last six months has been an extremely difficult one for the financial sector. In particular the share
prices of banks, real estate companies and those financial companies exposed to the property market or financial markets have fallen
sharply, with some commentators describing it as the worst environment for the industry for over 30 years.
A significant driver in the weakness in the share prices of banks over the last six months has been the concern that the pro-cyclicality
of the Basel II capital adequacy rules will result in banks needing to raise more capital in an economic slowdown. Adding to the weakness of
the share prices has been the belief that a number of European banks are considered to be overleveraged, the cost of which, namely the
shrinking of their balance sheets, will be lower profitability going forward for the sector.
Credit markets, having initially suffered sharp falls at the beginning of the year, staged a partial recovery following the actions of
the Federal Reserve to provide funding to JP Morgan in its acquisition of Bear Stearns, thus preventing a systemic collapse in financial
markets. Rights issues by a number of banks, to strengthen their balance sheets, have also improved sentiment towards credit markets.
Financial shares also rallied following the actions of the Federal Reserve with regard to Bear Stearns. However, its actions and the
steps taken by other central banks, to pump liquidity into financial markets, have not prevented financial shares, at the time of writing,
falling to new lows on the back of further negative economic data and higher food and energy prices.
Outlook
The degree to which banks will have to deliver and the lack of visibility with regard to the extent and duration of the slowdown in
economic growth make it difficult to forecast the impact on profitability for the financial sector. However, the fall in share prices has
resulted in the valuation of the sector falling close to historically low multiples, particularly for banks where some now trade close to,
or below, tangible book value.
As a function of this cautious outlook the gearing of the Company has been reduced over the last six months and hedging remains in place
to provide a degree of protection if there is further weakness in financial shares in the short-term. Your Board, nonetheless, remain
confident on the long-term prospects for your Company, and the financial sector, and look forward to updating you in six months' time.
Martyn Chambers
Chairman
21 July 2008
Responsibility Statement of the Directors
in respect of the Unaudited Half-Yearly Consolidated Financial Report
In accordance with the Disclosure and Transparency Rules 4.2.7R and 4.2.8R, we confirm that, to the best of our knowledge:
(a) The condensed set of unaudited consolidated interim results has been prepared in accordance with International Accounting
Standard 34, Interim Financial Reporting, as adopted by the European Union, as required by the Disclosure and Transparency Rule 4.2.4R;
(b) The Chairman's Statement includes a fair review of the information required to be disclosed under the Disclosure and Transparency
Rule 4.2.7R, interim management report. This includes: (i) an indication of important events that have occurred during the first six months
of the financial year, and their impact on the condensed set of unaudited interim results presented in the half-yearly financial report and
(ii) a description of the principal risks and uncertainties for the remaining six months of the financial year; and
(c) There were no changes in the transactions or arrangements with related parties as described in the Group's annual report for the
year ended 30 November 2007 that would have had a material effect on the financial position or performance of the Group in the first six
months of the current financial year.
Martyn Chambers
Chairman
For and on behalf of the Board
21 July 2008
CONSOLIDATED STATEMENT OF OPERATIONS
For the six months ended 31 May 2008 (unaudited)
1 December 2007 1 December 2006 1 December 2006
to 31 May 2008 to 31 May 2007 to 30 November 2007
(unaudited) (unaudited) (audited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Net investment gains/(losses)
Realised gains on investments - 1,658 1,658 - 4,721 4,721 - 7,740 7,740
Movement in unrealised - (6,085) (6,085) - 4,107 4,107 - (8,872) (8,872)
appreciation on investments
Realised gains on derivative - 254 254 - - - - 529 529
instruments
Movement in valuation of - 474 474 - (206) (206) - (152) (152)
unexpired derivative
instruments
Exchange gains on capital - 758 758 - 19 19 - 168 168
items
- (2,941) (2,941) - 8,641 8,641 - (587) (587)
Income
Income from investments 1,268 - 1,268 2,072 - 2,072 3,642 - 3,642
Bank interest 175 - 175 80 - 80 278 - 278
Exchange gains/(losses) on 2 - 2 (2) - (2) - - -
income
1,445 - 1,445 2,150 - 2,150 3,920 - 3,920
Expenses
Management fee - (98) (98) (185) (185) (370) (364) (364) (728)
Finance charge attributable to (94) (94) - (1,471) (1,471) - (3,007) (3,007)
ZDP Shares -
Administration fees - (85) (85) (81) - (81) (165) - (165)
Audit fee - (11) (11) (13) - (13) (25) - (25)
Directors' fees - (47) (47) (44) - (44) (100) - (100)
Miscellaneous expenses - (34) (34) (46) - (46) (81) - (81)
Ordinary and ZDP Share - (320) (320) - - - - (128) (128)
repayment costs
- (689) (689) (369) (1,656) (2,025) (735) (3,499) (4,234)
Net Return before Interest and 1,445 (3,630) (2,185) 1,781 6,985 8,766 3,185 (4,086) (901)
Taxation
Interest cost - (598) (598) - - - - - -
Net Return before Taxation 1,445 (4,228) (2,783) 1,781 6,985 8,766 3,185 (4,086) (901)
Taxation (107) - (107) (177) - (177) (93) - (93)
Total return for Ordinary 1,338 (4,228) (2,890) 1,604 6,985 8,589 3,092 (4,086) (994)
Shares
pence pence pence pence pence pence pence pence pence
Basic return per Ordinary 3.35 (10.59) (7.24) 2.61 11.36 13.97 5.03 (6.64) (1.61)
Share
Items in the above statement are derived from continuing operations except for items relating to ZDP Shares.
CONSOLIDATED STATEMENT OF CHANGES IN NET EQUITY
For the six months ended 31 May 2008 (unaudited)
For the six months ended 31 May 2008 (unaudited)
Capital Own shares Distributable Distributable Other non-
Share Share redemption held in reserves reserves distributable
capital premium reserve Treasury - revenue - special reserves Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
At 1 December 2007 15,375 3,623 - - 1,686 17,338 6,023 44,045
Reduction in nominal value of (15,314) 15,314 - - - - - -
Ordinary shares
Transfer to special reserve - (18,937) - - - 18,937 - -
Shares bought back for (19) - 19 - - (13,024) - (13,024)
cancellation
Shares bought back to be held - - - (2,884) - - - (2,884)
in Treasury
Net increase/(decrease) in net - - - - 1,338 - (4,228) (2,890)
assets from operations
Dividends paid - - - - (896) - - (896)
At 31 May 2008 42 - 19 (2,884) 2,128 23,251 1,795 24,351
For the six months ended 31 May 2007 (unaudited)
Capital Own shares Distributable Distributable Other non-
Share Share redemption held in reserves reserves distributable
capital premium reserve Treasury - revenue - special reserves Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
At 1 December 2006 15,375 3,623 - - 1,392 17,338 10,109 47,837
Net increase in net assets - - - - 1,604 - 6,985 8,589
from operations
Dividends paid - - - - (1,353) - - (1,353)
At 31 May 2008 15,375 3,623 - - 1,643 17,338 17,094 55,073
For the year ended 30 November 2007 (audited)
Capital Own shares Distributable Distributable Other non-
Share Share redemption held in reserves reserves distributable
capital premium reserve Treasury - revenue - special reserves Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
At 1 December 2006 15,375 3,623 - - 1,392 17,338 10,109 47,837
Net increase/(decrease) in net - - - - 3,092 - (4,086) (994)
assets from operations
Dividends paid - - - - (2,798) - - (2,798)
At 31 May 2008 15,375 3,623 - - 1,686 17,338 6,023 44,045
CONSOLIDATED STATEMENT OF NET ASSETS
As at 31 May 2008 (unaudited)
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Non-current assets
Investments at fair value 35,566 82,938 73,987
Current assets
Trade and other receivables 2,679 1,420 1,773
Cash and cash equivalents 7,896 12,182 10,680
10,575 13,602 12,453
Total assets 46,141 96,540 86,440
Current liabilities
Bank overdraft 20,688 - -
Trade and other payables 1,102 1,525 765
Amounts due to ZDP Shares - 39,942 41,478
21,790 41,467 42,243
Non-current liabilities
Amounts due on derivative - - 152
instruments
Total liabilities 21,790 41,467 42,395
Net assets 24,351 55,073 44,045
Capital and reserves
Called-up share capital 42 15,375 15,375
Share premium account - 3,623 3,623
Capital redemption reserve 19 - -
Own shares held in Treasury (2,884) - -
Distributable reserves - revenue 2,128 1,643 1,686
- special 23,251 17,338 17,338
Other non-distributable reserves 1,795 17,094 6,023
Total equity shareholders' funds 24,351 55,073 44,045
pence
pence pence
Net asset value per Ordinary 63.86 89.81 71.63
Share
Number of Ordinary Shares in 38,132,932 61,500,000 61,500,000
issue at period end excluding
shares held in Treasury
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 May 2008 (Unaudited)
1 December 2007 to 1 December 2006 to 1 December 2006 to
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Operating activities
Cash received from financial 1,702 1,764 3,289
investments
Interest received 152 36 275
Operating expense payments (402) (642) (1,268)
Net cash inflow from operating 1,452 1,158 2,296
activities
Servicing of finance
Interest paid (496) - -
Net cash outflow from (496) - -
servicing of finance
Investing activities
Purchase of financial (12,451) (16,497) (44,285)
investments
Sale of financial investments 45,853 24,530 50,767
Realised losses on foreign (129) (13) (22)
currency transactions
Realised gains on derivative 395 - 223
instruments
Net cash inflow from investing 33,668 8,020 6,683
activities
Financing activities
Ordinary shares bought back (13,024) - -
for cancellation
Ordinary shares bought back to (2,884) - -
be held in treasury
Repayment to ZDP Shareholders (41,572) - -
Ordinary and ZDP share (424) - (5)
repayment costs
Dividends paid (896) (1,353) (2,798)
Net cash outflow from (58,800) (1,353) (2,803)
financing activities
(Decrease)/increase in net (24,176) 7,825 6,176
cash and cash equivalents
1 December 2007 to 1 December 2006 to 1 December 2006 to
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Reconciliation of income less
expenses to net cash inflow
from operating activities
Income less expenses and 649 (52) (407)
withholding tax
Finance charge attributable to 94 1,471 3,007
ZDP shares
Ordinary and ZDP Share 320 - 128
repayment costs
Movement in accrued income - (129) (266)
Movement in other debtors 489 (39) (83)
Movement in other creditors (100) (93) (83)
and accruals
Net cash inflow from operating 1,452 1,158 2,296
activities
Analysis of changes in cash
and cash equivalents
Cash at the beginning of the 10,680 4,364 4,364
period
(Decrease)/increase in net (24,176) 7,825 6,176
cash and cash equivalents
Revaluation of foreign 704 (7) 140
currency balances
Cash at the end of the period (12,792) 12,182 10,680
Net cash at the end of period
is made up as follows:
Cash and cash equivalents 7,896 12,182 10,680
Bank overdraft (20,688) - -
(12,792) 12,182 10,680
NOTES TO THE CONSOLIDATED INTERIM RESULTS
For the six months ended 31 May 2008 (unaudited)
1 General information
New Star Financial Opportunities Fund Limited (the "Company") is a company domiciled in Guernsey. The condensed unaudited consolidated
interim results of the Company for the six months ended 31 May 2008 comprise the Company and its subsidiary up to the date of its winding up
on 11 December 2007.
On 11 December 2007 the subordinated loans totalling �41,572,440 were repaid to NSF Securities Limited and ZDP Shareholders received
their final capital entitlement of 168.48p per ZDP Share either by way of cash or accumulation units in New Star Diversified Absolute Return
Fund, an authorised open-ended unit trust. NFS Securities Limited was voluntarily wound up on 11 December 2007.
Changes to the Capital Structure of the Company are contained within this document.
These condensed unaudited consolidated interim results for the six months ended 31 May 2008 were authorised for issuance on 21 July
2008.
2 Significant Accounting Policies
a) Statement of compliance
These condensed unaudited consolidated interim results have been prepared in accordance with International Financial Reporting Standards
("IFRSs") for interim financial statements; IAS 34 Interim Financial Reporting. They do not include all of the information required for full
annual financial statements.
b) Basis of preparation
The unaudited interim results have been prepared on a fair value basis for financial assets and financial liabilities at fair value
through profit or loss and derivative financial instruments. Other financial assets and liabilities and non-financial assets and liabilities
are stated at amortised cost.
The unaudited interim results are presented in Sterling rounded to the nearest thousand. The functional currency of the Company is
Sterling as this is the currency of the primary economic environment within which the Company operates.
The accounting policies have been consistently applied by the Company and are consistent with those used in the financial statements for
the year ended 30 November 2007, except where stated below.
These unaudited consolidated interim results should be read in conjunction with the last audited financial statements as at 30 November
2007.
c) Changes in allocation of expenses between revenue and capital
As detailed in the circular dated 19 November 2007 recommending the implementation of a Tender Offer to purchase up to 50 per cent. of
the Company's issued share capital and reconstruct the Company, the Board also recommended the altering of the Company's accounting
treatment with respect to expenses.
Following approval of the latter recommendation, expenses are now charged 100 per cent. against the capital account as shown in these
interim results. Prior to 1 December 2007, expenses were allocated equally between revenue and capital. Comparative figures have not been
restated.
3 Management fee
New Star Asset Management Limited acts as Manager and is entitled to an annual fee, paid monthly in arrears. The management fee is
calculated at a rate of 0.8% of net assets and is now allocated entirely to capital. Prior to 30 November 2007 the fee was allocated equally
between revenue and capital. At the period end, �32,000 (31 May 2007: �127,000; 30 November 2007: �118,000) was payable to New Star Asset
Management Limited and is included in creditors.
In addition, the Manager is now entitled to receive a performance fee. The performance fee is at a rate of 15 per cent. of the amount by
which the NAV total return of the Shares out-performs the total return of the Dow Jones STOXX 600 Financial Index (expressed in sterling)
plus a hurdle of two per cent. per annum. The fee is payable twice yearly with a cap of two per cent. of the net assets in respect of any
particular year, subject to meeting the high watermark. At the period end, there was no performance fee payable to the Manager.
4 Administration fees
Elysium Fund Management Limited act as Administrator and receives a fee at the rate of �174,000 per annum with effect from 1 March 2008,
prior to this the administration fee was �166,000 per annum, payable monthly in arrears. The Administrator is responsible for the fees of
the Custodian and the Registrar.
5 Taxation
The charge for the six months ended 31 May 2008 is �107,000 (six months ended 31 May 2007: �177,000; year ended 30 November 2007:
�93,000). These amounts represents irrecoverable withholding tax paid on overseas income.
The Company has an effective tax rate of 0%. The estimated effective tax rate is 0% as the Company and subsidiary are both domiciled in
Guernsey and are exempt from paying tax on income or capital gains of that jurisdiction under the terms of the Income Tax (Exempt Bodies)
(Guernsey) Ordinance 1989. Each company is liable to an exemption fee of �600 per annum.
6 Share capital
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Authorised
80,000,000 Ordinary shares of
0.1p each
(31 May 2007 and 30 November
2007:
80,000,000 Ordinary Shares of 25p 80 20,000 20,000
each)
Allotted issued and fully paid
61,500,000 Ordinary shares of 25p 15,375 15,375 15,375
each
Reduction in the nominal value of (15,314) - -
Ordinary Shares
61,500,000 Ordinary shares of 61 15,375 15,375
0.1p each
19,130,076 Shares bought back for (19) - -
cancellation
42,369,924 Ordinary shares of
0.1p each
(31 May 2007 and 30 November
2007:
61,500,000 Ordinary Shares of 25p 42 15,375 15,375
each)
Shares bought back to be held in Treasury:
The Company has taken advantage of the regulations which came into force to allow companies, including investment trusts, to buy shares
and hold them in Treasury for re-issue at a later date. In accordance with Abstract 37: 'Purchase and sale of own shares', the consideration
paid for shares held in Treasury is presented as a deduction from shareholders' funds.
1 December 2007 to 1 December 2006 to 1 December 2006 to
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
Nominal Value of Shares held
in Treasury
At the beginning of the period - - -
Additions 2,884 - -
At the end of the period 2,884 - -
Number of Shares held in 4,236,992 - -
Treasury
7 Reserves and distributions
On 12 December 2007 the Company applied to the Royal Court of Guernsey to cancel the share premium account. On 14 December 2007,
approval to cancel the share premium account was received and the balance of �18,937,000 was transfered to the special reserve.
On 16 June 2008, a second interim dividend of �419,462; 1.10 pence per share relating to the year ending 30 November 2008, was declared.
This dividend which is payable on 31 July 2008, has not been shown in the Consolidated Statement of Changes in Net Equity.
Under the terms of the Company's Articles of Association, distributions can be made up to the total of accumulated gross income received
(less the running costs). For the period ended 31 May 2008, the amount available for distribution was �1,338,000; 3.51 pence per share (31
May 2007: �1,604,000; 2.61 pence per share; 30 November 2007: �3,092,000; 5.03 pence per share). Distributions of �896,000; 2.35 pence per
share (31 May 2007: �1,353,000; 2.20 pence per share; 30 November 2007: �2,798,000; 4.55 pence per share) have been distributed. The
retained surplus of �442,000 (31 May 2007: retained surplus �251,000; 30 November 2007: retained surplus of �294,000) is included in
distributable revenue reserves.
8 Return per share
The basic revenue return per Ordinary Share is based on a net increase in net assets from operations of �1,338,000 (31 May 2007:
�1,604,000; 30 November 2007: �3,092,000) and on 39,920,577 Ordinary Shares (31 May 2007: 61,500,000; 30 November 2007: 61,500,000) being
the weighted average number in issue (excluding treasury shares) throughout the period. The basic capital return per Ordinary Share is based
on a net decrease in assets from operations of �4,228,000 (31 May 2007: increase of �6,985,000; 30 November 2007: decrease of �4,086,000)
and on 39,920,577 Ordinary Shares (31 May 2007: 61,500,000; 30 November 2007: 61,500,000) being the weighted average number in issue
(excluding treasury shares) throughout the period.
There are no potential Ordinary Shares in existence, therefore no diluted returns per Share have been shown.
9 Net asset value per Share
31 May 2008 31 May 2007 30 November 2007
(unaudited) (unaudited) (audited)
pence pence pence
Net asset value per Ordinary 63.86 89.81 71.63
Share
The net asset value per Ordinary Share is based on the net assets attributable to the Ordinary Shareholders of �24,351,000 (31 May 2007:
�55,235,000; 30 November 2007: �44,054,000) and on 38,132,932 (31 May 2007: 61,500,000; 30 November 2007: 61,500,000) Ordinary Shares in
issue (excluding treasury shares) at the end of the period. (In May 2007 the net asset value per ZDP Share was based on the net assets
attributable to ZDP Shareholders of �39,780,000; 30 November 2007: �41,469,000 on 24,675,000 ZDP Shares).
10 Contingent assets and liabilities
At 31 May 2008, the Company was exposed to risks associated with sub-underwriting �800,000 on the Royal Bank of Scotland Group rights
issue. On 12 June 2008, the Royal Bank of Scotland announced subscribers had been procured for the remaining Ordinary Shares so the Company
did not suffer any loss on this transaction. Furthermore, the Company has received �8,000 as underwriting commission regarding the
transaction.
As at 31 May 2008there were no contingent assets or liabilities, except for these details above, (31 May 2007: none; 30 November 2007:
none).
11 Related party transactions
Apart from Management fees detailed in note 3 there were no significant related party transactions during the period (31 May 2007: none;
30 November 2007: none).
COMPANY PORTFOLIO
Forty largest investments at 31 May 2008
Holding Company Sector Security Fair Value
�'000
400,000 Personal Group Non-Life insurance Ordinary 1,280
Holdings
115,000 Banco Santander Banks Ordinary 1,209
500,000 Chaucer Holdings Fixed income CULS 1,132
8.5%
175,000 Aviva Life insurance Ordinary 1,103
150,000 DnB NOR Banks Ordinary 1,090
175,000 Man Group General financial Ordinary 1,087
17,500 BNP Paribas Banks Ordinary 913
750,000 Legal & General Life insurance Ordinary 899
Group
100,000 HSBC Holdings Banks Ordinary 853
275,000 Liontrust Asset General financial Ordinary 838
Management
1,000,000 Intesa Sanpaolo Fixed income Bond 798
6.25%
725,000 PSource Structured Investment companies Ordinary 790
Debt
1,000,000 Santander Int Debt Fixed income Bond 760
3.375%
8,000 Muenchener Rueckve Non-Life insurance Ordinary 758
750,000 Brit Insurance Fixed income Bond 716
Holdings 8.5%
750,000 Investec 7.75% Fixed income Bond 704
200,000 UniCredito Italiano Banks Ordinary 700
750,000 Provident Financial Fixed income Bond 690
7.125%
60,000 Banco Bilbao Vizcaya Banks Ordinary 676
Argebtaria
750,000 Wogen General financial Ordinary 653
700,000 Kensington Group 9% Fixed income Bond 616
445,000 Davenham Group General financial Ordinary 601
35,000 Bank of Pireaus Banks Ordinary 595
225,000 International General financial Ordinary 580
Personal Finance
80,000 Bank of Cyprus Banks Ordinary 564
700,000 Barclays Financials Fixed income Reverse Convertible 554
10% WOP Basket
400,000 New Star Asset General financial Ordinary 542
Management
30,000 Commerzbank Banks Ordinary 538
500,000 HBOS Capital Funding Fixed income Bond 533
9.54%
375,000 RSA Insurance Group Non-Life insurance Ordinary 514
275,000 Sberbank Rossii Banks Ordinary 495
400,000 Friends Provident Life insurance Ordinary 484
450,000 SVG Capital 8.25% Fixed income Bond 450
25,000 AXA Non-Life insurance Ordinary 446
3,000 Zurich Financial Non-Life insurance Ordinary 444
Services
70,000 ICAP General financial Ordinary 431
6,000 Wendel General financial Ordinary 431
Investissement
250,000 Hansard Global Life insurance Ordinary 430
125,000 Intesa Sanpaolo Banks Ordinary 415
300,000 Randall & Quilter Non-Life insurance Ordinary 411
Total for forty largest holdings by market value 27,723
Other holdings 7,843
Total fair value of investments 35,566
The Company holds the following short positions on unexpired derivatives:
The Company has a swap based on the DOW Jones Europe Stoxx Bank Index with a total notional value of �2,047,000. The unrealised gain on
this contract at 31 May 2008 was �536,000.
The Company also has three contracts for difference with a total notional value of �574,000. The unrealised loss on these contracts at
31 May 2008 was �62,000.
Notice of meeting
NOTICE IS HEREBY GIVEN that an EXTRAORDINARY GENERAL MEETING of NEW STAR FINANCIAL OPPORTUNITIES FUND LIMITED will be held at the
offices of Elysium Fund Management Limited, No. 1 Le Truchot, St. Peter Port, Guernsey GY1 3JX on 12 September 2008 at 10.30 am for the
following purposes:
Resolution on form of proxy
As special business:
Special Resolution 1
That Article 95 of the Company's Articles of Association be amended to delete the words: "other than a UK resident Director".
By order of the Board Registered office:
No. 1 Le Truchot
St. Peter Port
Guernsey GY1 3JX
Elysium Fund Management Limited, Secretary 21 July 2008
A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his or her stead. A
proxy need not also be a member of the Company. To be effective, forms of proxy must be lodged with the Company's Secretary, Elysium Fund
Management Limited, not less than 48 hours before the time appointed for holding the meeting. Lodgement of the form of proxy will not
preclude a shareholder from attending the meeting and voting in person.
Note:
The following documents will be available for inspection at the registered office of the Company during usual business hours on any
weekday (except Saturdays, Sundays and public holidays) until the date of the meeting and at the place of the meeting for a period of 15
minutes prior to and during the meeting:
a) A statement of all transactions of each Director and of their family interests in the share capital of the Company; and
b) The Articles of Association.
None of the Directors has a contract of Service with the Company.
Registered in Guernsey No. 37630
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFVRDAILFIT
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