Half-yearly Report
August 21 2007 - 8:08AM
UK Regulatory
LIFE OFFICES OPPORTUNITIES TRUST PLC
Unaudited results for the six months to 30 June 2007
The investment objective of Life Offices Opportunities Trust Plc ("LOOT") is to
achieve long term capital growth from a diversified portfolio of with-profits
life assurance policies. The Trust, with net assets of �36 million, is managed
by SVM Asset Management ("SVM"), the independent Edinburgh based investment
boutique.
Salient Points
* Net asset value per share increased by 6.5% to 152.5p during the period
under review.
* Maturity proceeds around 2.1% higher than forecasted.
* Gearing reduced from 32.6% to 21.4% as at the end of June and was totally
eliminated in the second week of August.
* Cash balances will be accumulated until the end of the Fund's life in 2008.
They will primarily be deployed in low risk fixed interest securities
yielding approximately LIBOR, currently 5.75%. This rate is higher than the
4% used in the quarterly projected terminal value announcements.
* The annual bonus declaration season generally proved favourable with bonus
rates mostly being raised.
* The median projected terminal asset value is 161.9 pence per share. With
the current share price of 141 pence per share, this equates to a potential
yield to maturity of approximately 9.6% per annum.
For further information please contact:
Donald Robertson SVM Asset Management Limited 0131 226 6699
Colin McLean SVM Asset Management Limited 0131 226 6699
Roland Cross Broadgate 020 7726 6111
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
LIFE OFFICES OPPORTUNITIES TRUST PLC
CHAIRMAN'S STATEMENT
For the six months to 30 June 2007
Commenting on the results for the six months to 30 June 2007, Chairman, John
Brumwell, said:
"I am pleased to report the first half of 2007 has seen the Company again make
progress. Over the six month period, the net asset value per share increased
6.5 per cent to 152.5p. The investment objective of the Company is to achieve
long term capital growth and no dividend is payable.
The Company's policies continued to mature as expected. There were 172
maturities in the first half of the year yielding approximately �4.5 million.
The maturity proceeds were of the order of 2.1% higher than forecast at the
2006 year end. The Fund still retains 1,425 policies, of which 625 are
scheduled to mature in 2007. Overall gearing has been reduced from 32.6% to
21.4% as at the end of June. Following recent maturities, borrowings were
totally repaid in the second week of August.
Cash balances will be accumulated from now until the end of the Fund's life in
2008. These cash balances will be deployed in low risk fixed interest
securities, yielding approximately LIBOR, currently 5.75%. This rate is higher
than the 4% used in the quarterly projected terminal maturity value
announcements.
Announcements made in the first quarter of 2007 proved favourable with bonus
rates mostly being raised. Generally, reversionary bonus rises were eschewed in
favour of rises in terminal bonuses. The major with-profit life office funds
produced returns of around 9%, after taxation and some reserving held back for
smoothing. Strong equity markets and a positive property sector were offset by
a weak bond market. Unsurprisingly, those offices with low bond content, those
open to new business or those with large surpluses were the better performers.
In July 2006, the Company was allocated Standard Life plc shares representing
approximately 4% of net assets. In addition, the Company was allocated a
further 22,000 shares as a loyalty bonus in July 2007. The share price has been
one of the best performers in the FTSE 100 since launch, and the Managers have
since realised just under half the holding in early August.
Over recent years, the Company has published projected terminal maturity values
on a quarterly basis. The median projected terminal asset value based on 30
June 2007 numbers is 161.9 pence per share using the previously indicated
assumptions. With the current share price of update on date of issue pence per
share, this equates to a potential yield to maturity of approximately 9.6% per
annum. We believe that the Company is well placed to achieve or possibly
marginally exceed this level at maturity."
John Brumwell
Chairman
21 August 2007
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Summarised Income Statement
(unaudited)
6 months to 30 June 2007 6 months to 30 June 2006
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains on sale of - 1,549 1,549 - 514 514
investments
Movement in unrealised - 1,217 1,217 - 2,097 2,097
appreciation
-------- -------- -------- -------- -------- --------
Gains on investments - 2,766 2,766 - 2,611 2,611
Income 27 - 27 - - -
Investment management - (157) (157) - (179) (179)
fees
Other expenses (66) (76) (142) (45) (97) (142)
-------- -------- -------- -------- -------- --------
Return before interest (39) 2,533 2,494 (45) 2,335 2,290
and taxation
Bank overdraft interest - (282) (282) - (381) (381)
-------- -------- -------- -------- -------- --------
Transfer (from) / to (39) 2,251 2,212 (45) 1,954 1,909
reserves
-------- -------- -------- -------- -------- --------
Return per ordinary share (0.17p) 9.56p 9.39p (0.19p) 8.30p 8.11p
Summarised Cash Flow Statement
(unaudited)
6 months to 6 months to
30 June 30 June
2007 2006
�'000 �'000
Net cash flow from operating (604) (404)
activities
Returns on investment and servicing (282) (381)
finance
Capital expenditure and financial 4,130 1,216
investment
---------- ----------
Increase in cash 3,244 431
---------- ----------
Balance Sheet
(unaudited)
As at As at
30 June 30 June
2007 2006
�'000 �'000
Investments at fair value through 43,617 44,223
profit or loss
--------- ---------
Current assets 24 32
Creditors: amounts falling due within (7,718) (13,206)
one year
--------- ---------
Net current assets (7,694) (13,174)
--------- --------
Total assets less current liabilities 35,923 31,049
--------- ---------
Equity shareholders' funds 35,923 31,049
-------- --------
Net asset value per ordinary share 152.54p 131.84p
Summarised Reconciliation of Movement in Shareholders Funds
(unaudited)
Share Special Capital Capital Capital Revenue
capital reserve redemption reserve reserve reserve
reserve realised unrealised
�'000 �'000 �'000 �'000 �'000 �'000
As at 1 January 2007 17,662 5,859 638 (5,572) 16,051 (927)
Realised gain on sale - - - 1,549 - -
of investments
Expenses charged to - - - (515) - -
capital
Movement in unrealised - - - - 1,217 -
appreciation on
investments
Return on ordinary - - - - - (39)
activities after
taxation
------- ------- ------- ------- ------- -------
As at 30 June 2007 17,662 5,859 638 (4,538) 17,268 (966)
------- ------- ------- ------- ------- -------
Share Special Capital Capital Capital Revenue
capital reserve redemption reserve reserve reserve
reserve realised unrealised
�'000 �'000 �'000 �'000 �'000 �'000
As at 1 January 2006 17,662 5,859 638 (5,904) 11,703 (818)
Realised gain on sale - - - 514 - -
of investments
Expenses charged to - - - (657) - -
capital
Movement in unrealised - - - - 2,097 -
appreciation on
investments
Return on ordinary - - - - - (45)
activities after
taxation
------- ------- ------- ------- ------- -------
As at 30 June 2006 17,662 5,859 638 (6,047) 13,800 (863)
------- ------- ------- ------- ------- -------
Notes
1. The accounts have been prepared in accordance with applicable accounting
standards and the 2005 Statement of Recommended Practice (SORP) issued by the
Association of Investment Companies. These accounts have been prepared in
accordance with prior year accounting policies.
2. Return per share is based on a weighted average of 23,550,000 (2006 - same)
ordinary shares in issue during the period. Capital return is based on the
net gains during the period of �2,251,000 (2006 - �1,954,000). Revenue
return per share is based on the revenue loss after taxation for the period
of �39,000 (2006 - �45,000). The number of shares in issue at 30 June 2006
was 23,550,000. (30 June 2006 - same).
3. The above figures do not constitute full accounts in terms of Section 240 of
the Companies Act 1985. The accounts for the year to 31 December 2006, on which
the auditors issued an unqualified report under Section 235 of the Companies
Act 2005, have been lodged with the Registrar of Companies and did not contain
a statement required under Section 237(2) or (3) of the Companies Act 1985. The
interim report will be mailed to shareholders toward the end of August 2007.
Copies will be available for inspection at 7 Castle Street, Edinburgh, the
registered office of the Company.
END
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