Final Results for the year ended 31 August 2006
28 Septembre 2006 - 7:09PM
UK Regulatory
To: Stock Exchange For immediate
release:
28 September 2006
PREMIUM TRUST plc
Results for the year ended 31 August 2006
Chairman's statement
The company's net asset value (NAV) total return per unit was 15.7% in the
twelve months to 31 August 2006 compared with 14.0 % for the composite
benchmark. This is composed of 80% FTSE All-Share index and 20% FTSE Government
All-Stocks index. Both the equity and the fixed interest portfolios outperformed
their respective indices over the period.
The company's unit share price rose by 10.5% in the year to 31 August 2006,
maintaining its recent record of rising by over 10% per annum. The combined
package price ended the year at 152.0p, close to the company's NAV per unit of
162.19p.
Reflecting its high gearing to movements in the underlying assets of the
company, the NAV of the capital shares was volatile during the period. At the
start of the year it was 1.3p per share but at the peak of the market in late
April this had increased substantially to 23.7p. By 31 August 2006 weaker
markets had seen the NAV fall back to 12.3p per share. The share price of the
capital shares was almost as volatile, rising from 4.8p to a peak of 17.8p
before falling back to end the year at 8.8p.
The income share price was much more stable, rising from 42.5p per share to
47.3p over the year whilst the zero dividend share price rose steadily from
96.0p to 102.3p.
Income has benefited from the continued growth in dividends from portfolio
constituents over the year. This growth has however been offset by the
requirement to charge the expected liquidation expenses to the company's revenue
account. This has had the effect of reducing revenue return per income share to
4.03p per share. Despite this reduction, the company has declared four interim
dividends totalling 5.25p per share, unchanged from the previous year and
utilising part of the revenue reserves. It is intended that the remaining
revenue reserves plus the income earned during the period to 31 December 2006
will be paid to shareholders before the expected liquidation.
Future of the Company
The board has continued to review with the assistance of its advisers, who have
consulted a number of the major shareholders, the possibility of offering
shareholders one or more rollover vehicles at the end of the company's fixed
life to 31 December 2006.
While the board believes there to be merit in the principle of offering a
rollover, its current position remains that a rollover scheme could only be
justified if the incremental cost of such a scheme, relative to a simple winding
up, would be borne by shareholders rolling over and/or the manager of the
successor fund(s).
The board's review has concluded that it is not currently possible to structure
a rollover scheme in line with the above principle and therefore the board's
intention is that the company be placed into members' voluntary liquidation in
December 2006 in accordance with the timetable set out in the articles, with no
rollover vehicles being offered. It is expected that documents to this effect
will be issued to shareholders early in December.
These financial statements have therefore been prepared on a break-up basis with
all assets classified as current on the balance sheet and an estimate for the
costs of liquidation provided.
Given current conditions it remains the board's intention to remain virtually
fully invested, with approximately 80% of assets in equities and 20% in cash and
fixed interest securities, until as close as practicable to 31 December 2006.
Manager's review
Performance
It is pleasing that over the 12 months to 31 August 2006 the company's total
return, as calculated on a net asset value per share basis, was 15.7%. This was
ahead of the composite benchmark index, which is made of the FTSE All-Share
index (80%) and the FTSE Government All Stocks index (20%) that produced a total
return of 14.0%.
The equity portion of the portfolio represented the most significant portion of
the portfolio throughout the year and this produced a total return of 18.2%,
ahead of the 16.8% from the FTSE All-Share. Contributors to this performance
included the holdings within the electricity and other financial sectors.
The fixed income portfolio also outperformed its benchmark, producing a total
return of 6.0% compared to 3.0% from the FTSE Government All Stocks index. The
core of this portfolio is the holdings in preference and debenture stocks.
Their long maturity together with strong demand for the relatively high yields
that they offer contributed to the good performance.
The company has been geared throughout the 12-month period although after
offsetting the value of the fixed income portfolio the equity gearing has been
relatively low and hence made only a modest contribution to performance.
Activity
The portfolio maintained its slight yield premium to the FTSE All-Share index
during the 12- month period and maintained the emphasis upon companies with the
ability to provide good dividend growth. Dividend growth was a feature of the UK
stock-market as companies passed on the benefit of strong profits growth to
shareholders. Within the mining sector the holding in Lonmin was switched into
Xstrata which offers better growth prospects and has also expanded via
acquisition.
Two holdings in the banks sector were sold during the 12-month period, Alliance
& Leicester and HBOS. Both were trading on relatively expensive ratings and the
proceeds were switched into the existing holdings of Barclays and Royal Bank of
Scotland. These two stocks offer a better combination of value and growth of
both profits and dividends.
There were several changes in the holdings within the media sector. The holding
in GCAP Media was sold as trading conditions in the radio market deteriorated.
Reed Elsevier, a publishing company prominent in scientific, legal and
educational markets was also sold. New holdings were established in Informa, an
exhibition and publishing business, and also in the broadcasting business ITV. A
new holding was also purchased in EMAP that publishes consumer magazines and
operates radio stations.
Pursuing the theme of investing in companies that can offer superior dividend
growth the holding in Aviva a leading general and life insurance company was
increased. This company has recently increased its interim dividend by 10%,
ahead of expectations. The purchase was funded by a sale of the holding in Legal
& General which is more dependent upon the UK market and is growing its dividend
much more slowly.
Takeovers have again been a regular occurrence within the UK stock market over
the period under review and one of the portfolio holdings, O2 the mobile phone
operator, was the subject of a successful takeover during the year.
Outlook
With only a short period remaining before the expected liquidation of the
company on 31 December the longer-term outlook for the economy and stock market
is no longer relevant for this portfolio. As indicated in the chairman's
statement it is the intention to remain fully invested for as long as
practically possible before 31 December. The managers will ensure that the
portfolio will be sufficiently liquid to be easily realisable at this time.
- ends -
For further information, please contact:
Ross Watson 0131 229 5252
Martin Currie Investment Management Ltd
rwatson@martincurrie.com
PREMIUM TRUST plc
Income statement for the
year ended 31 August 2006
Unaudited
Revenue Capital Total
�000 �000 �000
Gains on - realised - 1,194 1,194
investments
- unrealised - 2,739 2,739
Income - franked 1,386 227 1,613
- unfranked 176 - 176
Investment management fee (104) (156) (260)
Other expenses (217) - (217)
Estimated liquidation costs (277) - (277)
_______ _______ _______
Returns on ordinary activities before 964 4,004 4,968
finance costs and taxation
Finance costs: debt (165) (247) (412)
Finance costs: shareholders' funds (1,040) (2,177) (3,217)
Finance costs: appropriation in - (1,580) (1,580)
respect of income and ZDP shares
_______ _______ _______
Return on ordinary activities before (241) - (241)
taxation
Taxation on ordinary activities (1) - (1)
_______ _______ _______
Transfer from reserves (242) - (242)
_______ _______ _______
The total column of this statement is the profit and loss account of the
company.
A Statement of Total Recognised Gains and Losses is not required, as all gains
and losses of the company have been reflected in the above statement.
The revenue and capital items are presented in accordance with the Association
of Investment Companies (AIC) SORP.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the period.
On 28 September 2006, the Board declared a fourth interim dividend of 1.50p per
income share. The dividend will be paid on 31 October 2006 to shareholders on
the register on 13 October 2006. The total amount of the distribution,
calculated with reference to the number of income shares in issue at 31 August
2006, is �297,000.
The financial information contained within this announcement does not constitute
the company's statutory financial statements as defined in section 240 of the
Companies Act 1985. The audit report on the statutory financial statements has
not yet been signed.
The content of the preliminary announcement were approved by the board on 28
September 2006.
PREMIUM TRUST plc
Income statement for the
year ended 31 August 2005
Unaudited
Restated* Restated* Restated*
Revenue �000 �000
�000
Gains on - realised - 993 993
investments
- unrealised - 3,759 3,759
Income - franked 1,260 - 1,260
- unfranked 192 - 192
Investment management fee (94) (141) (235)
Other expenses (208) - (208)
Estimated liquidation costs - - -
_______ _______ _______
Returns on ordinary activities before 1,150 4,611 5,761
finance costs and taxation
Finance costs: debt (165) (247) (412)
Finance costs: shareholders' funds (1,040) (2,919) (3,959)
Finance costs: appropriation in respect - (1,445) (1,445)
of income and ZDP shares
_______ _______ _______
Returns on ordinary activities before (55) - (55)
taxation
Taxation on ordinary activities - - -
_______ _______ _______
Transfer from reserves (55) - (55)
_______ _______ _______
* Details of the restatement are included within note 1 to this
announcement.
PREMIUM TRUST plc
BALANCE SHEET
As at 31 August As at 31 August
2006 2005
Unaudited Unaudited
Restated* Restated
�000 �000 �000 *
�000
Fixed assets
Investments at fair value
through profit or loss - 35,435
Current assets
Investments at fair value
through profit or loss 38,913 -
Debtors 283 246
Cash at bank 1,079 798
_______ _______
40,275 1,044
Creditors
Amounts falling due within (7,454) (173)
one year
_______ _______
Net current assets 32,821 871
_______ _______
Total assets less 32,821 36,306
current liabilities
Creditors
Amounts falling due after
one year
Loans - (7,000)
_______ _______
Net asset value attributable
to shareholders 32,821 29,306
_______ _______
Net asset value attributable
to shareholders (as defined
by the Articles)
Per income share 47.82p 48.19p
Per capital share 12.27p 1.28p
Per zero dividend preference 102.10p 93.75p
share
Per unit (excluding
undistributed revenue 162.19p 143.22p
reserve)
Undistributed revenue 3.57p 4.79p
reserve
Company net asset value 165.76p 148.01p
* Details of the restatement are included within note 1 to this announcement.
PREMIUM TRUST plc
STATEMENT OF CASH FLOW
Year ended 31 Year ended 31
August 2006 August 2005
Unaudited Unaudited
�000 �000 �000 �000
Operating activities
Net dividends and
interest received from 1,742 1,453
investments
Interest received from 52 56
deposits
Investment management (254) (234)
fee
Bank charges (3) (4)
Cash paid to and on (59) (61)
behalf of directors
Other cash payments (157) (133)
_______ _______
Net cash inflow from
operating activities 1,321 1,077
Servicing of finance
Finance costs: debt (412) (412)
Finance costs: (1,040) (1,040)
shareholders' funds
_______ _______
Net cash outflow from
servicing of finance (1,452) (1,452)
Capital expenditure
and financial
investment
Payments to acquire (7,692) (4,216)
investments
Receipts from disposal 8,104 4,355
of investments
_______ _______
Net cash inflow from 412 139
capital expenditure
and financial
investment
_______ _______
Increase/(decrease) in
cash for the period 281 (236)
_______ _______
Notes
1. Accounting policies
Other than the restatements detailed below and the impact of preparing the
accounts on a break up basis, these summary accounts have been prepared on the
same basis as set out in the previous year's annual accounts.
These statements have incorporated the requirements of FRS21 "Events after the
Balance Sheet Date", FRS25 "Financial Instruments: Disclosure and Presentation",
FRS26 "Financial Instruments: Measurement" and the Statement of Recommended
Practice of the AIC issued in 2005. There have been three significant changes
arising from these:
* Previously interim dividends were reported in the financial period to which
they related. FRS21 recommends that they are accounted as a liability in the
period in which they are approved. Under FRS 25 such dividends are now treated
as finance costs;
* In relation to FRS26, the company's investments are classified as
"financial assets at fair value through profit or loss" and are therefore valued
at bid price. In prior years, investments were valued at middle market price;
* Under FRS25, the share capital of the company is classified as a liability
rather than equity. This classification arises from the fixed entitlements of
the income and zero dividend preference shares at 31 December 2006 and for the
capital shares from the approaching wind-up of the company.
The comparative accounting period for the year ended 31 August 2005 has been
restated for these changes.
Given the fixed life of the company, the directors do not consider the going
concern basis to be appropriate. The financial statements have therefore been
prepared on a break-up basis with all assets classified as current on the
balance sheet and provision made for the estimated cost of liquidating the
company.
2. Returns (as defined by the Articles)
The return and net asset value per unit are calculated with reference to the
following figures:
Restated*
Year ended Year ended 31
Revenue return 31 August 2006 August 2005
�000 �000
Revenue return
attributable to (242) (55)
unitholders per income
statement
Add back: Finance
costs- shareholders' 1,040 1,040
funds
_______ _______
798 985
Average number of
units in issue during 19,800,000 19,800,000
period
Revenue return per 4.03p 4.97p
unit
Year ended Restated*
31 August 2006 Year ended 31
August 2005
�000 �000
Capital return
Capital return - -
attributable to
unitholders
Add back: Finance
costs- shareholders' 2,177 2,919
funds
Add back:
appropriation in 1,580 1,445
respect of income and
ZDP shares
_______ _______
3,757 4,364
Average number of
units in issue during 19,800,000 19,800,000
period
Capital return per 18.97p 22.04p
unit
Total return per unit 23.00p 27.01p
* Details of the restatement are included within note 1 to this announcement.
Net asset values (as defined by the Articles)
As at 31 August Restated*
2006 As at 31 August
2005
Net asset value �000 �000
Net assets attributable
to shareholders per 32,821 29,306
balance sheet
Undistributed revenue (707) (949)
reserve
_______ _______
32,114 28,357
_______ _______
Entitlement for ZDP
shareholders at the 20,215 18,562
year end
Entitlement for income
shareholders at the 9,468 9,542
year end
Entitlement for capital
shareholders at the 2,431 253
year end
_______ _______
32,114 28,357
_______ _______
Net asset value per
share
Net assets attributable
to shareholders per 165.76p 148.01p
balance sheet
Undistributed revenue (3.57p) (4.79p)
reserve
_______ _______
162.19p 143.22p
_______ _______
Entitlement for ZDP
shareholders at the
year end 102.10p 93.75p
Entitlement for income
shareholders at the
year end 47.82p 48.19p
Entitlement for capital
shareholders at the
year end 12.27p 1.28p
_______ _______
162.19p 143.22p
_______ _______
* Details of the restatement are included within note 1 to this announcement.
3. Memorandum- net asset value attributable to shareholders
Is represented by:
Restated*
As at 31 August As at 31 August
2006 2005
Net asset value �000 �000
Called-up share 1,980 1,980
capital
Share premium 16,976 16,976
Redemption reserve-
income shares 10,797 9,145
Redemption reserve-
zero dividend 17,897 17,969
preference shares
Capital reserve- (25,957) (25,395)
realised
Capital reserve- 10,421 7,682
unrealised
Revenue reserve
(attributable to
income shareholders 707 949
on winding -up)
_______ _______
32,821 29,306
_______ _______
* Details of the restatement are included within note 1 to this
announcement.
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