HALF YEARLY FINANCIAL REPORT
for the six months ended 30th June
2016
A copy of the Company's Half Yearly Financial Report for the six
months ended 30th June
2016 will shortly be available to view and download from
www.rightsandissues.co.uk. Neither the contents of this
website nor the contents of any website accessible from hyperlinks
on this website (or any other website) is incorporated into or
forms part of this announcement.
Printed copies of the Report will be sent to shareholders
shortly. Additional copies may be obtained from the Corporate
Secretary – Maitland Administration services Limited, Springfield
Lodge, Colchester Road, Chelmsford, Essex CM2 5PW.
INTERIM DIVIDEND
An interim dividend of 10.0p per share has been approved by the
Board and is payable on 30th September
2016 to shareholders on the register as at 2nd September 2016 (ex-dividend 1st September 2016).
The following text is copied from the Half Yearly Financial
Report.
CHAIRMAN’S STATEMENT
The decision of the United
Kingdom to leave the European Union on 23rd June 2016 will have fundamental economic
consequences which as yet are difficult to predict. In the short
term, there has been a period of extreme market volatility.
This is not apparent in the performance of the FTSE All-Share
Index which shows a rise of 2.1% for the first six months. However,
since the vote to leave there has been a significant divergence in
performance with the leading company prices rising while the rest
of the UK market has fallen.
The net asset value has risen by 2.4% to 1582.3p at the end of
the period.
The capital restructuring was successfully completed in June and
the interim dividend is 10p per share in accordance with the
previous indication.
The economy is now faced with a period of uncertainty and market
volatility is likely to continue.
Dr D. M.
BRAMWELL
Chairman
21st July 2016
Risks and uncertainties
Cautionary statement
This Half Yearly Report contains forward-looking statements that
involve risk and uncertainty. These have been made by the Directors
in good faith based on the information available to them at the
time of their approval of this Report. Due to the inherent
uncertainties, including stock market risk factor, actual results
may differ materially from those expressed or implied by these
forward-looking statements.
There are a number of potential risks and uncertainties which
could have a material impact on the Company’s performance over the
remaining six months of the financial year and could cause actual
results to differ materially from expected and historical results.
The Company’s results continue to be exposed to market price risk.
Further information on the principal long-term risks and
uncertainties of the Company is included in the latest Annual
Report.
INCOME STATEMENT
for the six months ended 30th June
2016
|
|
|
Six months ended
30th June 2016 |
|
Six months ended
30th June
2015 |
|
Year ended 31st December 2015 |
Notes |
Revenue
£'000 |
Capital
£'000 |
Total
£'000 |
Revenue
£'000 |
Capital
£'000 |
Total
£'000 |
Revenue
£'000 |
Capital
£'000 |
Total
£'000 |
Investment
income |
2 |
1,561 |
– |
1,561 |
1,679 |
– |
1,679 |
3,271 |
– |
3,271 |
Other operating
income |
2 |
3 |
– |
3 |
1 |
– |
1 |
6 |
– |
6 |
Total income |
|
1,564 |
– |
1,564 |
1,680 |
– |
1,680 |
3,277 |
– |
3,277 |
Gains on fair value
through profit or loss assets |
|
– |
452 |
452 |
– |
23,470 |
23,470 |
– |
25,875 |
25,875 |
(Losses)/gains on
subsidiary holding |
|
– |
(45) |
(45) |
– |
– |
– |
– |
212 |
212 |
|
|
1,564 |
407 |
1,971 |
1,680 |
23,470 |
25,150 |
3,277 |
26,087 |
29,364 |
Expenses |
|
|
|
|
|
|
|
|
|
|
Investment management
fee |
|
– |
– |
– |
– |
– |
– |
– |
– |
– |
Other expenses |
|
296 |
– |
296 |
359 |
– |
359 |
682 |
– |
682 |
|
|
296 |
– |
296 |
359 |
– |
359 |
682 |
– |
682 |
Profit before
tax |
|
1,268 |
407 |
1,675 |
1,321 |
23,470 |
24,791 |
2,595 |
26,087 |
28,682 |
Tax– |
|
|
– |
– |
– |
– |
– |
29 |
– |
29 |
Profit for the
period |
|
1,268 |
407 |
1,675 |
1,321 |
23,470 |
24,791 |
2,624 |
26,087 |
28,711 |
Earnings per
share |
|
|
|
|
|
|
|
|
|
|
Return per
Income |
|
|
|
|
|
|
|
|
|
|
Share |
|
14.1p |
4.5p |
18.6p |
24.2p |
238.5p |
262.7p |
47.3p |
265.1p |
312.4p |
Return per
Capital |
|
|
|
|
|
|
|
|
|
|
Share |
|
n/a |
n/a |
n/a |
44.2p |
1073.3p |
1117.5p |
89.0p |
1193.0p |
1282.0p |
The total column of this statement represents the Income
Statement, prepared in accordance with International Financial
Reporting Standards. The supplementary revenue return and capital
return columns are both prepared under guidance published by the
Association of Investment Companies. All items in the above
statement are those of the single entity and derive from continuing
operations.
An interim dividend of 10.0p (2015: 10.5p) per share and
amounting to £902,000 (2015: £258,300) is payable on 30th September 2016 to shareholders on the
register as at 2nd September 2016
(ex-dividend 1st September 2016).
The financial information contained in this Half Yearly
Financial Report does not constitute statutory accounts as defined
in Sections 434 – 436 of the Companies Act 2006. The information
for the six months to 30th June 2016
and 30th June 2015 has not been
audited.
The information for the year ended 31st
December 2015 has been extracted from the latest published
audited accounts which have been filed with the Registrar of
Companies. The report of the auditors on those accounts contained
no qualification or statement under Section 498 (2) or (4) of the
Companies Act 2006.
The auditors have reviewed the financial information for the six
months ended 30th June 2016 pursuant
to the Auditing Practices Board guidance on Review of Interim
Financial Information and their report is on page 12.
BALANCE SHEET
as at 30th June 2016
Non-current
assets |
30th
June
2016
£'000 |
30th
June
2015
£'000 |
31st
December
2015
£'000 |
Investments at fair
value through profit or loss |
125,347 |
130,795 |
123,256 |
|
125,347 |
130,795 |
123,256 |
Current
assets |
|
|
|
Other receivables |
742 |
735 |
412 |
Current tax
receivable |
29 |
39 |
29 |
Amounts due from Group
undertakings |
140 |
831 |
140 |
Cash and cash
equivalents |
16,509 |
8,076 |
18,909 |
|
17,420 |
9,681 |
19,490 |
Total
assets |
142,767 |
140,476 |
142,746 |
Current
liabilities |
|
|
|
Other payables |
41 |
752 |
77 |
|
41 |
752 |
77 |
Total assets less
current liabilities |
142,726 |
139,724 |
142,669 |
Net assets |
142,726 |
139,724 |
142,669 |
Equity |
|
|
|
Called up share
capital |
2,255 |
1,025 |
1,025 |
Share premium |
– |
225 |
225 |
Retained
reserves: |
|
|
|
Capital reserve |
62,665 |
55,901 |
63,709 |
Revaluation
reserve |
75,290 |
80,074 |
74,883 |
Revenue reserve* |
2,516 |
2,499 |
2,827 |
Total
equity |
142,726 |
139,724 |
142,669 |
* Previously called
the Dividend equalisation reserve. |
|
|
|
Net asset value per
share |
|
|
|
Income shares |
1,582.3p |
1,505.6p |
1,544.8p |
Capital shares |
n/a |
6,261.4p |
6,382.2p |
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30th June
2016
|
Share
capital
£'000 |
Share
premium
Account
£'000 |
Capital
Reserve
£'000 |
Revaluation
Reserve
£'000 |
Dividend
Equalization
Reserve
£'000 |
Total
£'000 |
For the six months ended June
2015 |
|
|
|
|
|
|
Balance at 31st December
2014 |
1,025 |
225 |
51,973 |
60,532 |
2,539 |
116,294 |
Profit for the period |
– |
– |
3,928 |
19,542 |
1,321 |
24,791 |
Total recognised income and
expense |
1,025 |
225 |
55,901 |
80,074 |
3,860 |
141,085 |
Dividends (Note 3) |
– |
– |
– |
– |
(1,361) |
(1,361) |
Balance at 30th June
2015 |
1,025 |
225 |
55,901 |
80,074 |
2,499 |
139,724 |
For the year ended December
2015 |
|
|
|
|
|
|
Balance at 31st December
2014 |
1,025 |
225 |
51,973 |
60,532 |
2,539 |
116,294 |
Profit for the period |
– |
– |
11,736 |
14,351 |
2,624 |
28,711 |
Total recognised income and
expense |
1,025 |
225 |
63,709 |
74,883 |
5,163 |
145,005 |
Dividends (Note 3) |
– |
– |
– |
– |
(2,336) |
(2,336) |
Balance at 31 December
2015 |
1,025 |
225 |
63,709 |
74,883 |
2,827 |
142,669 |
For the six months ended June
2016 |
|
|
|
|
|
|
Balance at 31st December
2015 |
1,025 |
225 |
63,709 |
74,883 |
2,827 |
142,669 |
Profit for the period |
– |
– |
– |
407 |
1,268 |
1,675 |
Total recognised income and
expense |
1,025 |
225 |
63,709 |
75,290 |
4,095 |
144,344 |
Bonus issue of income shares |
1,230 |
(225) |
(1,005) |
– |
– |
– |
Cost of bonus issue |
– |
– |
(39) |
– |
– |
(39) |
Dividends (Note 3) |
– |
– |
– |
– |
(1,579) |
(1,579) |
Balance at 30th June
2016 |
2,255 |
– |
62,665 |
75,290 |
2,516 |
142,726 |
* Previously called the Dividend
equalisation reserve.
CASH FLOW STATEMENTS
for the six months ended 30th June
2016
Cashflows from
operating activities |
30
June
2016
£'000 |
30
June
2015
£'000 |
31
December
2015
£'000 |
Profit before tax |
1,675 |
24,791 |
28,682 |
Adjustments for: |
|
|
|
Gains on
investments |
(452) |
(23,470) |
(25,875) |
Losses/(gains) on
revaluation of subsidiary |
45 |
– |
(212) |
Purchases of
investments |
(1,684) |
(1,733) |
(1,733) |
Proceeds on disposal
of investments |
– |
6,147 |
16,283 |
Operating cash flows
before movements in working capital |
(416) |
5,735 |
17,145 |
(Increase)/decrease in
receivables |
(330) |
(428) |
586 |
(Decrease)/increase in
payables |
(36) |
11 |
40 |
Net cash from
operating activities before income taxes |
(782) |
5,318 |
17,771 |
Income taxes
received |
– |
– |
39 |
Net cash (used in)
from operating activities |
(782) |
5,318 |
17,810 |
Cashflows from
financing activities |
|
|
|
Expenses from capital
restructure |
(39) |
– |
– |
Disposal of
subsidiary |
– |
– |
20 |
Dividends paid |
(1,579) |
(657) |
(2,336) |
Net cash used in
financing activities |
(1,618) |
(657) |
(2,316) |
Net
(decrease)/increase in cash and cash equivalents |
(2,400) |
4,661 |
15,494 |
Cash and cash
equivalents at beginning of year |
18,909 |
3,415 |
3,415 |
Cash and cash
equivalents at end of period |
16,509 |
8,076 |
18,909 |
NOTES TO THE HALF YEARLY FINANCIAL
REPORT
for the six months ended 30th June
2016
1. Accounting Standards
The condensed interim financial report has been prepared in
accordance with International Financial Reporting Standards
(IFRSs), including IAS 34 “Interim financial reporting” as adopted
by the European Union. The same accounting policies and methods of
computation are followed in the interim financial report as those
used in the Company’s latest published annual financial
statements.
2. Income
|
|
|
|
|
30
June |
30
June |
31
December |
|
2016 |
2015 |
2015 |
|
£'000 |
£'000 |
£'000 |
Total income
comprises: |
|
|
|
Dividends |
1,561 |
1,679 |
3,271 |
Interest |
3 |
1 |
2 |
Other income |
– |
– |
4 |
Total
income |
1,564 |
1,680 |
3,277 |
|
|
|
|
3. Dividends
Amounts
recognised as distributions to equity holders in the year:
Income (Paid)
Interim dividend for the year ended 31 December 2015 |
30 June
2016
£'000 |
30 June
2015
£'000 |
31
December
2015
£'000 |
of 10.5p per
share |
– |
– |
258 |
Final dividend for the
year ended 31 December 2015 of 25.5p per share (year ended 31
December 2014: 25.5p) |
627 |
627 |
627 |
Special dividend for
the year ended 31 December 2016 of 22.5p per share (year ended 31
December 2015: nil p) |
553 |
– |
– |
Capital
(Paid) |
|
|
|
Supp cap dividend for
the year ended 31 December 2015 of 86.6585p per share |
– |
704 |
1,421 |
Final dividend for the
year ended 31 December 2015 of 1.8p per share (year ended 31
December 2014: 1.8p) |
30 |
30 |
30 |
Special dividend for
the year ended 31 December 2016 of 22.5p per share (year ended 31
December 2015: nil p) |
369 |
– |
– |
|
1,579 |
1,361 |
2,336 |
|
30
June
2016
£'000 |
Income
Proposed interim dividend of 10.0p per share |
902 |
|
902 |
This proposed interim dividend was approved by the Board on
21st July 2016 and has not been
included as a liability at 30th June
2016.
4.
Valuation of financial instruments
IFRS 13 requires the Company to classify fair value measurements
using a fair value hierarchy that reflects the significance of
inputs used in making the measurements. The valuation techniques
used by the Company are explained in the accounting policies note 1
Investments, as set out in the Company’s Annual Report and
Financial Statements for the year ended 31st
December 2015.
The fair value hierarchy has the following levels:
Level 1 – Unadjusted prices quoted in active markets for
identical assets and liabilities.
Level 2 – Having inputs other than quoted prices included within
Level 1 that are observable for the asset or
liability, either directly (ie as prices) or indirectly (ie
derived from prices).
Level 3 – Having inputs for the asset or liability that are not
based on observable data.
30 June
2016 |
Level
1 |
Level
2 |
Level
3 |
Total |
|
£000 |
£000 |
£000 |
£000 |
Financial assets at
fair value through profit or loss |
|
|
|
|
UK Equity
Listed |
92,239 |
– |
– |
92,239 |
AIM trades
stocks |
32,530 |
– |
– |
32,530 |
Investment in
subsidiary |
– |
– |
578 |
578 |
Net fair
value |
124,769 |
– |
578 |
125,347 |
30 June 2015 |
Level
1
£000 |
Level
2
£000 |
Level
3
£000 |
Total
£000 |
|
|
|
|
|
Financial assets at
fair value through profit or loss |
|
|
|
|
UK Equity Listed |
97,870 |
– |
– |
97,870 |
AIM trades stocks |
32,494 |
– |
– |
32,494 |
Investment in
subsidiary |
– |
– |
431 |
431 |
Net fair value |
130,364 |
– |
431 |
130,795 |
31 December 2015 |
Level
1
£000 |
Level
2
£000 |
Level
3
£000 |
Total
£000 |
Financial assets at
fair value through profit or loss |
|
|
|
|
UK Equity Listed |
92,853 |
– |
– |
92,853 |
AIM trades stocks |
29,780 |
– |
– |
29,780 |
Investment in
subsidiary |
– |
– |
623 |
623 |
Net fair value |
122,633 |
– |
623 |
123,256 |
There were no transfers between Level 1 and Level 2 during the
period.
A reconciliation of fair value measurements in Level 3 is set
out in the following table.
|
30
June
2016
£'000 |
30
June
2015
£'000 |
31
December
2015
£'000 |
Opening Balance |
623 |
431 |
431 |
Purchases |
– |
– |
– |
Sales |
– |
– |
(20) |
Total gains or losses
included in gains on investments in the Income Statement: |
|
|
|
– on assets sold |
– |
– |
– |
– on assets held at
period end |
(45) |
– |
212 |
Closing
Balance |
578 |
431 |
623 |
The Level 3 investments relate to the Company's subsidiary,
Discretionary Unit Fund Managers Limited which has been valued
based of the most recent estimated NAV.
5.
Related Party Transactions
Under IFRS, the Directors have been identified as related
parties. Their fees and interests for the year ended 31st December 2015 have been disclosed in the
Director’s Annual Remuneration Report within the 2015 Annual Report
and Financial Statements.
During the period the Company had the following transactions
with Discretionary Unit Fund Managers Limited, its subsidiary
undertaking:
|
30
June
2016
£'000 |
30
June
2015
£'000 |
31
December
2015
£'000 |
Dividends
received |
– |
113 |
121 |
|
– |
113 |
121 |
Amounts owed by
subsidiary undertaking |
140 |
475 |
140 |
6. Going
Concern
The Company's assets comprise mainly realisable equity
securities and cash and the value of its assets is greater than its
liabilities. Additionally, after reviewing the Company's budget
including the current financial resources and projected expenses
for the next twelve months and its medium-term plans, the Directors
believe that the Company's resources are adequate for continuing in
business for the foreseeable future. Accordingly it is appropriate
to continue to prepare accounts on a going concern basis.
DIRECTORS’ STATEMENT OF RESPONSIBILITY
FOR THE HALF YEARLY FINANCIAL REPORT
The Directors are responsible for preparing the Half Yearly
financial report in accordance with applicable law and
regulations.
The Directors confirm that to the best of their knowledge:
- the condensed set of financial
statements has been prepared in accordance with IAS 34 “Interim
financial reporting”; and
- the Half Yearly management report
includes a fair review of the information required by DTR 4.2.7R
and 4.2.8R.
This report was approved on 21st July
2016.
Dr D. M.
BRAMWELL
Chairman
TOP TEN HOLDINGS
Investment |
Holding |
Value
£ |
Scapa |
8,000,000 |
20,680,000 |
RPC |
1,800,000 |
14,076,000 |
Hill & Smith |
1,434,230 |
12,714,449 |
VP |
1,800,000 |
11,340,000 |
Treatt |
5,775,000 |
9,240,000 |
Colefax |
2,050,000 |
9,225,000 |
Macfarlane |
16,325,851 |
8,897,589 |
British Polythene
Industries |
764,325 |
7,092,936 |
Spirax-Sarco
Engineering |
120,714 |
4,514,704 |
Menzies (John) |
650,000 |
3,545,750 |
The actual holdings as at 30th June
2016 are, in each case, of ordinary shares and of the
nominal value for which listing has been granted.
INDEPENDENT REVIEW REPORT TO RIGHTS
AND ISSUES INVESTMENT TRUST PLC
INTRODUCTION
We have been engaged by the Company to review the financial
statements in the Half Yearly Financial Report for the six months
ended 30th June 2016 which comprises
the Income Statement, the Balance Sheet, the Statement of Changes
in Equity, the Cash Flow Statement and the related explanatory
notes 1 to 6. We have read the other information contained in the
Half Yearly Report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
The report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
DIRECTORS’ RESPONSIBILITIES
The Half Yearly Financial Report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the Half Yearly Financial Report in accordance with
the Disclosure and Transparency Rules of the United Kingdom’s
Financial Conduct Authority.
As disclosed in note 1, the Annual Financial Statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The financial statements included in this Half
Yearly Financial Report have been prepared in accordance with
International Accounting Standard 34 “Interim Financial Reporting”
as adopted by the European Union.
OUR RESPONSIBILITY
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the Half Yearly
Financial Report based on our review.
SCOPE OF REVIEW
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial
Information Performed by the Independent Auditor of the Entity”
issued by the Auditing Practices Board for use in the United Kingdom. A review of interim
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than in an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not enable us
to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly we do not
express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that
causes us to believe that the financial statements in the Half
Yearly Financial Report for the six months ended 30th June 2016 are not prepared, in all material
respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom’s Financial Conduct
Authority.
COLIN WAIN
For and on behalf of Begbies
Chartered Accountants
9 Bonhill Street
London EC2A 4DJ
21st July 2016
END