TIDMEQPI TIDMEQPC
RNS Number : 6392P
Equity Partnership Inv Co PLC
27 March 2009
THE EQUITY PARTNERSHIP INVESTMENT COMPANY PLC
(EPIC PLC"the Company")
PRELIMINARY RESULTS ANNOUNCEMENT
This is not the Company's Statutory Financial Statements. All figures are
based on the unaudited financial statements for the period from 1 August 2008 to
31 January 2009
The preliminary announcement is prepared on the same basis as set out in
the previous year's annual accounts.
Chairman's Statement
The first six months to 31 January 2009 has been another difficult period for
the portfolio, resulting in a 39.97% decline in the Net Asset Value attributable
to the Capital Shares. Again, the Small Cap Indices fell in excess of 30% over
the period compared with the decline in the All Share Index of a little over
24%. Because of the capital structure and the inherent gearing behind the
Capital Shares NAV has fallen by significantly more than these indices.
Income Shareholders have received their full entitlement 6p over the half year.
The portfolio continues to generate yields in excess of the Company's current
dividend requirement and this, added to the significant income reserves,
provides Income Shareholders with a high level of comfort that their dividends
will be well covered until their redemption in July 2011.
Because of the sharp deterioration in the outlook for the UK Economy the Board
and its advisers have been particularly sensitive to the need to review the
valuations of the unlisted equities and specialist funds. I am happy to report
that the Private Equity portfolio appears to be progressing satisfactorily, as
described in the Manager's Report. As a result there has been no necessity for
any significant change in the valuation of holdings in this portfolio. However,
elsewhere within the portfolio the Manager recommended significant write-downs
on certain unlisted strategic investments and specialist funds. These have been
reflected in the Capital Shares' NAV performance over the past six months.
As the Company moves towards the final years of its initial life and following
the recent dramatic falls in the markets, the Board are keen to ensure that the
portfolio's investments are accurately valued. Where we believe there has
been impairment, this has been reflected in the carrying values of the
underlying investments and, as many of our long-term investors will be aware,
the Company has in the past not hesitated to write down valuations when
circumstances dictate. However, given the current environment we do not believe
it right to impose forced sale valuations in realisations of less illiquid
investments given that the Fund is not in a position where it must raise short
term liquidity from these segments of the portfolio.
Asset Allocation Review
Our regular quarterly updates provide Shareholders with detailed descriptions of
individual holdings within our investment portfolio. From this and previous
communications, Shareholders will understand that following the sharp fall in
the value of our quoted investments the Fund is very much more heavily weighted
towards unlisted investments than at any time in the Company's existence. Within
this category I would also include those specialist funds and strategic
investments that have private equity characteristics either in terms of risk or
liquidity.
Following the Continuation Vote and in the absence of alternative proposals we
have a little over 30 months before we are required to repay approximately GBP47
million to Zero and Income Shareholders, and the Board's focus will therefore
increasingly be on the Fund's asset allocation and its access to liquidity.
Moreover, there will be an increasing focus on the valuations of, and prospects
for the Company's unquoted investments.
EPIC's structure was designed specifically to address the conflicts that had
previously been typical of closed-end investment funds with split capital
structures. In particular, the relatively low yield requirement to service
Income Shares avoided the need for the fund manager to allocate assets in a
manner designed exclusively to generate income and they could therefore allocate
assets with a greater degree of freedom to seek total return.
Previous experience has shown how difficult it can be for Boards to arbitrate
between the shareholders whose main interest is in generating the maximum amount
of income and those who benefit from capital growth in the underlying assets.
While there are periods when both objectives can be pursued in parallel, more
often than not there will be a conflict between the two objectives. If one had
to point to EPIC's greatest success over the past seven years it has been that
the Board has seldom, if ever, been exercised by this issue and we now enjoy a
situation where we have sufficient distributable reserves to cater for the
Income Shares' likely dividend entitlements until their redemption in July 2011.
We now have to address a potential conflict which was not contemplated at the
time of launch. Eighteen months ago the Capital Shares enjoyed an NAV in excess
of GBP1.30. As a result the GBP27 million final entitlement for the Zeros was
more than 3x cover and the Income Share repayment of GBP20 million was covered
2.5x. The volatility and liquidity of the underlying portfolio was therefore not
of particular concern to Zero and Income Shareholders who had justifiable
confidence in the Company's ability to repay them at the end of July 2011
without the requirement to raise cash from the less liquid segments of the
portfolio.
Following the fall in the Company's NAV (resulting mostly from the collapse in
the valuations of small and mid cap companies, and specifically those with an
exposure to cyclical industries both in the UK and overseas), the prices of
Income Shares and, to a lesser extent Zeros, are reflecting Shareholders'
concerns that a liquidation of the less liquid assets will be required to effect
full repayment in 2011 unless there is a meaningful recovery in the listed
investments in the meantime. Following discussions between the Board, our
Managers and advisers, we have concluded that while the Company should continue
to be managed with a view to generating the growth required to generate an
improvement of the Capital Shareholders' NAV, the portfolio should be gradually
de-risked to ensure that in the absence of alternative proposals, the Zero and
Income Shareholders can be repaid in full at the end of July 2011 and that
Capital Shareholders' investments can be realised in an orderly manner.
Future Asset Allocation Policy
The Board and Managers are tasked with running the Company for the benefit of
all underlying shareholders and so our job is to ensure that the interests of
all three share classes are fairly represented in formulating future strategy
and, as importantly, clearly communicated to shareholders to help the market to
value the three constituent parts correctly.
As I mentioned in my previous Statement, there may be a requirement to manage a
rump of investments beyond 2011. We are unlikely to maximise value if we find
ourselves in the position of forced sellers of illiquid assets into an
unreceptive market. The position will be regularly reviewed and communicated to
Shareholders so that they can see clearly both where their class of share ranks
within the pecking order and the nature of the assets that they are relying upon
to provide their return and eventual repayment.
Given the historically low interest rates and government bond yields, the Board
does not consider it appropriate to limit asset allocation of monies raised to
minimum risk investments. The Fund's performance hurdle rate dictates that the
Fund's assets should be exposed to investments that are likely to at least keep
pace with the hurdle rate returns in order not to erode the value for
Shareholders over the next 30 months.
Despite continuing uncertainty concerning the length and depth of the current
downturn, any recovery in the stock markets over the next two years is likely to
precede any upturn in underlying economic conditions. There are listed companies
with sound underlying balance sheets and the ability to service and even
increase dividends which, against a background of almost a zero return from the
minimum risk asset classes, are at some stage likely to enjoy a significant
recovery. Moreover, the quoted equity portfolio retains exposures to small
companies whose share prices, if they survive, are likely to also recover
strongly in advance of any perceived economic upturn.
However, it will be the success of our Manager in realising value from the
private equity portfolio over the next 30 months that is likely to have the
greatest influence on the Capital Shares' NAV and provide an increase in cover
for the final entitlements due to Zero and Income Shareholders.
In summary, the Board's recommended asset allocation parameters are as follows:
· No new investments will be introduced to the unquoted portfolio.
· Any further bolt-on investments to the current portfolio must be bought with a
view to providing a demonstrable exit opportunity before the end of 2011.
· No illiquid funds will be purchased without prior reference to the Board.
· Money raised through sales of unquoted investments will be recommitted to
liquid funds, equities, cash or bonds with a view to matching or exceeding the
Company's hurdle rate.
· If further money is committed to equities, the profile of the UK equity
portfolio will move away from current small cap focus towards liquid medium and
larger capitalised equities over the next two years.
Although neither option is under active consideration at the time of writing,
the Board's focus on an appropriate asset allocation strategy will not be to the
exclusion of alternative measures which we will be considering with a view to
improving the liquidity of the three Share Classes, including possible capital
restructuring or merger with another company if we believe this is in the best
interests of all Shareholders.
Finally, I would again stress the Company's conservative valuation strategy
which in the current economic circumstances seems particularly appropriate and
offers the potential for some significant upside as unquoted investments are
realised over the next three years.
After what has been a particularly testing time for the Company we would welcome
a period of decreased market uncertainty and volatility and, most importantly, a
period when markets provide a positive use for the Company's structural
leverage.
Investment Manager's Report
Market Commentary
The beginning of the period saw one of the most volatile and event filled
quarters in financial market history, with a multitude of news releases
regarding troubled financial institutions, authorities' actions to help repair
the dislocations in the money markets, and the attention of market participants
shifting from inflation to concerns regarding the health of the financial
sector. The real global economy continued to show signs of contraction with
unemployment rates beginning to creep upwards, while inflation pressures started
to abate due to the retreat of energy and other commodity prices from their
highs of recent months. As a result of the uncertainty over both sides of banks'
balance sheets, inter-bank lending rates soared in the major markets.
In a manner unseen since the Great Depression, fear, uncertainty and risk
aversion destroyed asset values in every category other than Government bonds,
which benefited from the resultant 'flight to quality'. The collapsing oil price
from mid-year onwards together with the mistaken decision to permit Lehman
Brothers to collapse forced central banks in Q4 to focus upon the real economic
problems as opposed to inflation. Q4 witnessed an unprecedented co-ordinated
easing of monetary and fiscal policy as policy makers world wide belatedly
fought to prevent the financial crisis from spreading into the wider economy.
The result, in addition to historically low interest rates and massive projected
fiscal deficits, was previously an unimaginable level of intervention by
governments in all sectors of the private economy. In a desperate effort to save
the capitalist system, particularly in America, authorities re-invented it in an
ad hoc way and with little philosophical debate.
Quoted Equity
UK Equity markets suffered another difficult six months with the FTSE all Share
Index losing 24.3%. The severity of the fall was the result of an unprecedented
banking crisis. Across the world governments were forced to support the
financial systems as all but the strongest institutions were threatened with
failure by bad loans and toxic assets. In the UK competition rules were relaxed
to allow Lloyds to rescue HBOS. Later in the period substantial cash injections
resulted in the UK government acquiring two thirds of Royal Bank of Scotland and
just under half of the newly formed Lloyds/HBOS group.
EPIC began the period with holdings in Barclays and Lloyds. Lloyds' medium term
potential of having a dominant position in the UK mortgage market was eclipsed
by the somewhat awkward position of the UK government as a major shareholder and
the entire holding was sold. Barclays' determination to avoid government funding
initially won praise but some management credibility was lost when substantial
sums were raised on highly dilutive terms from Middle Eastern investors without
giving existing shareholders their normal pre-emption rights. Despite this
disappointment the Barclays holding was retained for its ability to reward
shareholders when the markets recover.
Two portfolio companies failed during the period. Automotive body parts
manufacturer Wagon and retailer Woolworths were both highly geared and operating
in difficult markets when their bankers lost patience with them.
Conditions in the building supplies markets continued to deteriorate on both
sides of the Atlantic to the detriment of trading performance at Heywood
Williams and Lupus Capital. Heywood Williams' bankers continue to be supportive
and for that reason EPIC increased its holding to 16.6% of the company. If the
company survives 2009 there is considerable gearing to even a modest upturn in
UK and US housing markets. Lupus is less exposed directly to housing markets and
derives around a quarter of its profits from offshore oil services supplier Gall
Thomson. Like other portfolio holdings Diploma and Electrocomponents its
earnings benefit on translation from the weakness of Sterling.
On the other hand Lupus does have a large exposure to US Dollar debt which will
impact unfavourably on its year end balance sheet.
Aurum Mining should have been producing gold and copper from its low cost Andash
mine in Kyrgyzstan by the end of 2008. However, an impossible business climate
in this FSU republic prevented this. The company is seeking court permission to
return the bulk of its substantial cash assets of up to GBP19.5 million (40
pence per share) to shareholders. This should occur in spring 2009.
The Specialist Funds portfolio represents 30.3% of the total Fund. Percentages
appear to be higher than normal because of the general decline in the equity
market. This decline is also reflected in the decline in the sterling assets in
this portfolio. Within this portfolio Sterling assets represent 5.3% of the
total Fund; EUR investments total 4.3% of the Fund; and, USD investments represent
16.8% of the Fund. This portfolio is targeted at achieving non-correlated
returns - diverse from the main body of the Fund - in excess of the Company's
Libor + 3% per annum performance benchmark. We were caught by the record fall in
the value of GBP against the $ and to a lesser extent the EUR as we were hedged in
both currencies.
The largest holdings are:
Jupiter Hyde Park Hedge Fund Limited ($6.7 million), an open-ended limited
liability company incorporated in Bermuda. The fund is run by Philip Gibbs and
is mandated to invest in a wide range of international investments.
EEA Life Settlement Fund ($3.8 million), a Guernsey domiciled fund listed on the
Channel Island Stock Exchange. Its objectives are to purchase, hold and manage a
portfolio of US life settlements, provide a minimum benchmark return of 8% per
annum and generate a consistent total net return of between 8% and 10% per
annum.
CCD Leisure Investments ($3.2 million), which was set up to invest in prestige
holiday developments in emerging destinations such as Granada.
CCFM Bristol & Stone Baltic Property Limited (EUR2.8 million), an Isle of Man Fund
which invests in real estate in the Baltic States of Estonia, Latvia and
Lithuania. Whilst the portfolio was secured at attractive levels through the
availability of "off-market" opportunities at prices that offered some
insulation against the inevitable slowing of economic growth in the region,
following the financial crisis affecting the region's neighbours and trading
partners we have marked down the value of our investment by ca.25%.
King & Shaxson (GBP1.2 million), a hedge fund which invests in ordinary shares
in the King & Shaxson Master Fund. The current stance is a weighting towards
large international companies rather than UK domestics.
EPE Special Opportunities plc (GBP0.8 million) is a closed-end Fund listed on
AIM, focused on the control and ownership of distressed assets. The Fund's
largest investment is in Past Times, a niche retailer of historically inspired
jewellery, gifts, books and house-wares which was acquired at the end of
December 2005, which is growing strongly following the initial restructuring
period. The most recent investment by the Fund was the acquisition of Whittard
of Chelsea, the tea and coffee specialist which was previously owned by Baugur.
Avarae Global Coins plc (GBP0.7 million) is an AIM listed specialist investment
company which is in the process of purchasing an impressive portfolio of high
quality rare coins which will be held for the long term. Delivery of the shares
has been delayed as they were caught in the freeze on the assets of Landsbanki
in the UK we are presently seeking to resolve this issue but it appears likely
to be prolonged.
Strategic Investments
The share price of Syndicate Asset Management PLC continues to trade at low
levels. However, as mentioned in previous newsletters, the majority of the
Funds' consideration from the sale of EPIC Investments Partners at the end of
2006 is retained in Loan Notes which paid a 6% coupon during the period under
review.
Over the last quarter, Strand Partners, while continuing to see high levels of
general client enquiries, suffered from the uncertainty that such deals can be
completed in the current market conditions. As a result of this and a general
de-rating of financial investments in the quoted sector, the Managers have
written down the valuation of this shareholding.
The Private Equity portfolio held by EPIC Investments LLP and EPIC Investments 2
LLP has performed robustly over the last six months, managing well through the
downturn.
The portfolio has performed such that no write-downs have had to be made at the
interim stage. The investments continue to be valued upon a consistent basis,
with no write-ups having been made in the last two years. Given the current
market uncertainty, it is unlikely that any holding values will be increased
until such market uncertainty has passed however at present there are no
expectations that any write-downs will be necessary.
One investment was made in the last six months, with the acquisition in October
2008 of an additional 13.8% equity in Pinnacle for GBP2.85m. The Manager is
starting to see very good opportunities due to the current lack of liquidity,
although it is currently very difficult to leverage such investments. The focus
over the next 6-12 months will be on bolt-on acquisitions to the existing
portfolio.
Current Portfolio (held by EPIC Investments LLP and EPIC Investments 2 LLP)
Pharmacy2U, the online pharmacy, is trading profitably and growing in line with
expectations. Sales have grown at 30% pa for the last six years at Pharmacy2U,
and continue to grow at a similar rate. Recent profitability has been ahead of
expectations.
Ryness, the electrical retailer and wholesaler, is performing relatively well
given the downturn, with the online division in particular growing very
strongly. Sales are generally slightly down on budget, particularly in the
wholesale channel, but profits have been on budget.
Nexus, the electrical distributor, is performing ahead of expectations, with
profitability 7% above budget for 2008. Such profitability has continued into
2009, and the business is seeing a number of new sales opportunities in order to
grow in the coming year.
Palatinate Schools, the London-based schools group, reports solid pupil numbers
and strong profitability. Recent sales have been ahead of budget, driven by
better than expected nurseries performance, although profit has been slightly
behind budget.
Pinnacle-psg, the social housing management company, has a promising pipeline of
new business, although profitability in recent months has been behind
expectations. Profit performance is expected to improve in the next 12 months
Indicia, the marketing services group, are performing to expectations and
continue to grow despite the downturn. Entire, the most recent acquisition, is
performing well, and recently renewed its key contract, providing a platform for
further growth in the coming year.
Bighead, the specialist engineering company, is performing strongly, with good
profit growth in the last few months. Some customer weakness is expected going
forward, but the sign up of new distributors is expected to compensate for this
slowness in demand.
Driver Require, the driver recruitment business, has seen a downturn in trading
due to the difficult market conditions, but remains profitable.
Evolving Media, the digital marketing agency, is performing well with rapid
growth continuing with new client wins. It recently beat some of the top UK
digital agencies in order to win a couple of large accounts, with increasing
credibility driving sales growth.
+--------------------------+----------+---+-----------------------------+--------+
| Asset Allocation as at 31 January | | Asset Allocation as at 31 July 2008 |
| 2009 | | |
+-------------------------------------+---+--------------------------------------+
| | % | | | % |
+--------------------------+----------+---+-----------------------------+--------+
| Unquoted | 38.38 | | Unquoted | 22.55 |
| Investments/Private | | | Investments/Private | |
| Equities | | | Equities | |
+--------------------------+----------+---+-----------------------------+--------+
| Specialist Funds | 26.00 | | Specialist Funds | 21.08 |
+--------------------------+----------+---+-----------------------------+--------+
| Quoted UK Equities | 17.68 | | Quoted UK Equities | 28.80 |
+--------------------------+----------+---+-----------------------------+--------+
| Bonds & Structured | 8.12 | | Bonds & Structured Income | 6.90 |
| Income Products | | | Products | |
+--------------------------+----------+---+-----------------------------+--------+
| Strategic Investments* | 5.06 | | Strategic Investments* | 6.26 |
+--------------------------+----------+---+-----------------------------+--------+
| Cash & Sterling CD's | 4.76 | | Cash & Sterling CD's | 14.41 |
+--------------------------+----------+---+-----------------------------+--------+
| *Syndicate Asset Management PLC, | | *Syndicate Asset Management PLC, |
| Strand Partners Limited, | | Strand Partners Limited, |
| Note: figures do not include the | | Note: figures do not include the |
| exposure to EPIC Securities PLC | | exposure to EPIC Securities PLC |
+--------------------------+----------+---+-----------------------------+--------+
Cameron McPhail
27 March 2009
Consolidated Income Statement
For the period from1 August 2008 to 31 January 2009
+-------+-------------------------------------+--------------+--------------+--------------+
|Notes | | 1 August 08 | 1 August | 1 August |
| | | to 31 | 2007 to 31 | 2007 to 31 |
| | | January 2009 | January 2008 | July 2008 |
| | | (Unaudited) | (Unaudited) | (Audited) |
+-------+-------------------------------------+--------------+--------------+--------------+
| | | GBP000's | GBP000's | GBP000's |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Income | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Bond interest | 1,317 | 383 | 2,229 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Dividends on financial assets at | 708 | 416 | 1,107 |
| | fair value through profit or loss | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Bank interest | 120 | 737 | 614 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Other income | 40 | 29 | 16 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Total income | 2,185 | 1,565 | 3,966 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Expenses | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Management and investment advisory | 530 | 511 | 976 |
| | fees | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Professional fees | 159 | 115 | 378 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Other expenses | 266 | 275 | 515 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Performance fees | - | 293 | 273 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Abort fees | 6 | 7 | 18 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Administration fees | 65 | 82 | 145 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Directors' fees | 38 | 30 | 67 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Custodian fees | - | 4 | (6) |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Audit fees | 22 | 44 | 67 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Total expenses | 1,086 | 1,361 | 2,433 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Net investment income | 1,099 | 204 | 1,533 |
+-------+-------------------------------------+--------------+--------------+--------------+
| | (Losses)/gains on investments | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Realised losses on sale of | (334) | (5,988) | (8,261) |
| | investments | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Net unrealised loss on forward | (559) | (633) | (617) |
| | foreign currency contracts | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Realised losses on forward foreign | (2,723) | - | (509) |
| | exchange contracts | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Foreign exchange differences | 246 | 54 | 700 |
+-------+-------------------------------------+--------------+--------------+--------------+
| 6 | Movement in unrealised losses on | (9,733) | (3,455) | (9,212) |
| | revaluation of investments at fair | | | |
| | value through profit or loss | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Loss for the period/year on | | | |
| | investments at | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | fair value through profit or loss | (13,103) | (10,022) | (17,899) |
+-------+-------------------------------------+--------------+--------------+--------------+
| 4 | Dividends on Income Shares | (1,295) | (1,233) | (2,466) |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Debt finance costs | (752) | (705) | (1,410) |
+-------+-------------------------------------+--------------+--------------+--------------+
| | Loss for the period/year | (14,051) | (11,756) | (20,242) |
+-------+-------------------------------------+--------------+--------------+--------------+
| 5 | Basic and diluted loss per Capital | (34.86p) | (29.17p) | (50.22p) |
| | Share (pence) | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
| | | | | |
+-------+-------------------------------------+--------------+--------------+--------------+
All items in the above statement are derived from continuing operations.
Consolidated Balance Sheet
As at 31 January 2009
+-------+------------------------------------------+-------------+-------------+------------+
| | | 31/01/2009 | 31/01/2008 | 31/07/2008 |
| | | (Unaudited) | (Unaudited) | (Audited) |
+-------+------------------------------------------+-------------+-------------+------------+
|Notes | | GBP000's | GBP000's | GBP000's |
+-------+------------------------------------------+-------------+-------------+------------+
| 6 | Financial assets measured at fair value | 59,901 | 81,729 | 71,848 |
| | through profit or loss | | | |
+-------+------------------------------------------+-------------+-------------+------------+
| | Current assets | | | |
+-------+------------------------------------------+-------------+-------------+------------+
| | Cash and cash equivalents | 3,030 | 3,295 | 5,109 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Trade debtors & other receivables | 4,287 | 2,798 | 3,113 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Total assets | 67,218 | 87,822 | 80,070 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Current liabilities | | | |
+-------+------------------------------------------+-------------+-------------+------------+
| | Trade creditors & other payables | 2,030 | 1,702 | 1,686 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Non-current liabilities | | | |
+-------+------------------------------------------+-------------+-------------+------------+
| | Zero Dividend Preference Shares | 23,385 | 21,843 | 22,562 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Income Shares | 20,703 | 20,640 | 20,671 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Total liabilities | 46,118 | 44,185 | 44,919 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Net assets | 21,100 | 43,637 | 35,151 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Shareholders' Equity | | | |
+-------+------------------------------------------+-------------+-------------+------------+
| 7 | Share capital | 4,030 | 4,030 | 4,030 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Share premium | 35,410 | 35,410 | 35,410 |
+-------+------------------------------------------+-------------+-------------+------------+
| | Reserves | (18,340) | 4,197 | (4,289) |
+-------+------------------------------------------+-------------+-------------+------------+
| | Shareholders' Equity | 21,100 | 43,637 | 35,151 |
+-------+------------------------------------------+-------------+-------------+------------+
| | | Pence | Pence | Pence |
+-------+------------------------------------------+-------------+-------------+------------+
| 8 | Net asset value per Capital Share | 52.35 | 108.27 | 87.21 |
| | (pence) - (basic and diluted) | | | |
+-------+------------------------------------------+-------------+-------------+------------+
| | | | | |
+-------+------------------------------------------+-------------+-------------+------------+
The financial statements were approved by the Board of Directors on 27 March
2009.
Philip Scales Martin Richardson
Director Director
Consolidated Statement of Changes in Shareholders' Equity
For the period from 1 August 2008 to 31 January 2009
+----------------------------------------+-------------+-------------+------------+
| | 31/01/2009 | 31/01/2008 | 31/07/2008 |
| | (Unaudited) | (Unaudited) | (Audited) |
| | GBP000's | GBP000's | GBP000's |
+----------------------------------------+-------------+-------------+------------+
| | | | |
+----------------------------------------+-------------+-------------+------------+
| Shareholder's Equity at the beginning | 35,151 | 55,393 | 55,393 |
| of period/year | | | |
+----------------------------------------+-------------+-------------+------------+
| Loss for the period/year | (14,051) | (11,756) | (20,242) |
+----------------------------------------+-------------+-------------+------------+
| Shareholders' Equity at the end of the | 21,100 | 43,637 | 35,151 |
| period/year | | | |
+----------------------------------------+-------------+-------------+------------+
Consolidated Statement of Cash Flows
For the period 1 August 2008 to 31 January 2009
+---------------------------------------+--------------+--------------+--------------+
| | 1 August | 1 August | 1 August |
| | 2008 to 31 | 2007 to 31 | 2007 to 31 |
| | January 2009 | January 2008 | July 2008 |
| | (Unaudited) | (Unaudited) | (Audited) |
| | GBP000's | GBP000's | GBP000's |
+---------------------------------------+--------------+--------------+--------------+
| Operating activities | | | |
+---------------------------------------+--------------+--------------+--------------+
| Dividends received | 749 | 703 | 1,079 |
+---------------------------------------+--------------+--------------+--------------+
| Bond interest received | 1,355 | 230 | 2,066 |
+---------------------------------------+--------------+--------------+--------------+
| Bank interest received | 120 | 456 | 621 |
+---------------------------------------+--------------+--------------+--------------+
| Other income received | 40 | - | 16 |
+---------------------------------------+--------------+--------------+--------------+
| Expenses paid | (980) | (1,289) | (2,805) |
+---------------------------------------+--------------+--------------+--------------+
| Net cash inflow from operating | 1,284 | 100 | 977 |
| activities | | | |
+---------------------------------------+--------------+--------------+--------------+
| Investing activities | | | |
+---------------------------------------+--------------+--------------+--------------+
| Purchase of investments | (19,581) | (39,184) | (75,378) |
+---------------------------------------+--------------+--------------+--------------+
| Proceeds on sale of investments | 20,596 | 37,828 | 76,422 |
+---------------------------------------+--------------+--------------+--------------+
| Project costs paid | - | - | (39) |
+---------------------------------------+--------------+--------------+--------------+
| Settlement of forward foreign | (2,723) | - | (509) |
| exchange contracts | | | |
+---------------------------------------+--------------+--------------+--------------+
| Deferred consideration | 89 | - | - |
+---------------------------------------+--------------+--------------+--------------+
| Security deposit | (590) | - | - |
+---------------------------------------+--------------+--------------+--------------+
| Net cash (outflow)/inflow from | (2,209) | (1,356) | 496 |
| investing activities | | | |
+---------------------------------------+--------------+--------------+--------------+
| Financing activities | | | |
+---------------------------------------+--------------+--------------+--------------+
| Dividends paid on Income Shares | (1,264) | (1,210) | (2,444) |
+---------------------------------------+--------------+--------------+--------------+
| Issue cost of ZDP Shares | - | - | (214) |
+---------------------------------------+--------------+--------------+--------------+
| Net cash outflow from financing | (1,264) | (1,210) | (2,658) |
| activities | | | |
+---------------------------------------+--------------+--------------+--------------+
| | | | |
+---------------------------------------+--------------+--------------+--------------+
| Decrease in cash and cash equivalents | (2,189) | (2,466) | (1,185) |
+---------------------------------------+--------------+--------------+--------------+
| Effects of foreign exchange | 110 | 54 | 587 |
| fluctuations on cash and cash | | | |
| equivalents | | | |
+---------------------------------------+--------------+--------------+--------------+
| Cash and cash equivalents at start of | 5,109 | 5,707 | 5,707 |
| the period/year | | | |
+---------------------------------------+--------------+--------------+--------------+
| Cash and cash equivalents at end of | 3,030 | 3,295 | 5,109 |
| the period/year | | | |
+---------------------------------------+--------------+--------------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PUUUPWUPBGAM
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