TIDMNAIT
RNS Number : 3006Z
North American Income Trust (The)
17 September 2015
17 September 2015
THE NORTH AMERICAN INCOME TRUST PLC
HALF YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS TO 31 JULY 2015
The investment objective of The North American Income Trust plc
is to provide investors with above average dividend income and long
term capital growth through active management of a portfolio
consisting predominantly of S&P 500 US equities.
For further information, please contact:-
Gary Jones
Aberdeen Asset Management PLC 0207 463 6000
INTERIM BOARD REPORT
CHAIRMAN'S STATEMENT
Dividend
The Directors have declared a second quarterly dividend of 6.5p
per share, which will take the total dividends for the first half
of the fiscal year to 13.0p (2014 - 12.0p), an 8.3% increase. The
second quarterly dividend is payable on 30 October 2015 to
shareholders on the register on 2 October 2015.
The revenue return per Ordinary share for the six months ended
31 July 2015 amounted to 17.3p compared to 13.8p for the equivalent
period in 2014. Our investments continue to increase their
dividends and we remain cautiously optimistic.
Portfolio
During the review period, the Trust's performance did not keep
pace with the S&P 500 Index which, whilst not a perfect index,
is used as a reference. The Company's net asset value per share
declined by 3.9% on a total return basis (in sterling terms)
compared to a rise of 2.6% total return (in sterling terms) in the
S&P 500 Index.
Broadly speaking, higher-yielding companies lagged the overall
market as growth-oriented companies continued to diverge from their
value-oriented counterparts. To give some context, over the twelve
months to 31 July 2015 the Russell 1000 Growth outpaced the Russell
1000 Value by more than 15% (in sterling terms), with the latter
making up a significant proportion of dividend paying stocks.
Understandably this was a difficult backdrop for the Trust's
holdings to outperform, but we also recognise that several of the
portfolio's holdings did not perform as we had hoped.
At the asset allocation level, the portfolio's relative
underweighting to the lower yielding sectors such as healthcare and
consumer discretionary caused relative underperformance as these
areas of the market were the strongest performers. In contrast,
given the uncertainties over rising interest rates, the higher
yielding sectors such as utilities underperformed by more than 10%
while many industrial and materials companies also lagged given a
slower economic backdrop, particularly overseas. Amid on-going
weakness in commodity and oil prices, several of the Trust's equity
holdings in the materials and energy sectors were the largest
individual detractors from performance although yields remained
attractive and dividends were largely well covered - particularly
for many of the larger and more diversified energy companies.
The revenue account remains in good shape, however, underpinned
by above-average dividend growth. We continue to believe that the
overall quality of the underlying companies in the portfolio is on
track to grow the Trust's dividends and add to revenue reserves for
this financial year.
As at 31 July 2015, the portfolio consisted of 40 equity
positions and 12 corporate bonds, the latter of which represented
approximately 5% of total assets and provided 6.5% of our total
income earned compared to 12% over the six-month period ended 31
July 2014. During the reporting period, the Company received
premiums totalling GBP1.3 million (versus GBP767,000 for the same
period a year earlier) for entering into stock option transactions.
This option income represents 17.3% of total income (2014 - 12.3%),
the generation of which is consistent with the Manager's
company-focused investment process. Bond coupons and option premia
will remain of course secondary sources of income given our belief
that income from dividends must remain the overwhelming source of
income available for distribution. Further details of the portfolio
are shown below.
Market and Economic Review
North American stocks finished in positive territory for the
six-month period ended 31 July 2015, although they did not move in
a straight line. There were several gyrations in the market as
investors reacted to economic data reports and various geopolitical
events. In the midst of a plethora of information a few market
themes stood out, including the latest comments regarding monetary
policy from the US Federal Reserve (Fed) and slowing growth in
China, together with the prolonged slump in oil and commodity
prices. While the latter generally has been good news for consumers
as it translated into cheaper fuel, it weighed on the energy and
materials sectors which were the weakest performers within the US
broader-market S&P 500 Index over the review period. It appears
that the probability of higher interest rates has already been
priced into the US fixed income market. Bond prices fell modestly
over the period as US Treasury yields rose.
According to FactSet, almost three quarters of S&P 500
constituents that had reported second-quarter 2015 earnings had
exceeded consensus estimates. However, this actually represented a
1.0% drop in aggregate earnings due to the large declines in the
energy sector. This represented the first year-on-year decrease in
earnings for the index since the third quarter of 2012 (also
-1.0%). Companies most often cited negative currency effects as the
primary detractor from performance, followed by the fiscal crisis
in the Eurozone and economic weakness in China. Unsurprisingly,
from a sector perspective, energy companies posted the largest
year-on-year decreases, whilst the healthcare sector reported the
largest increase in earnings.
Gearing
The Company continued to make use of a closed ended company's
opportunity to gear through its 2.18% fixed term loan facility of
$51.1 million (GBP32.7 million). Additional drawings under the
revolving element of the facility provided by State Street amount
to GBP7.9 million, making the total debt as at 31 July 2015 of
GBP40.6 million. At the period end, the Company's cash position of
GBP19.9 million largely represented the cash pledged as collateral
or ringfenced for potential liabilities in relation to the open
options position at the period end.
Discount
Shareholders approved the annual resolution at the Annual
General Meeting in May to authorise the Company to buy back up to
14.99% of its issued share capital.
During the six month period ended 31 July 2015 the Company
bought back 1,491,848 Ordinary shares for cancellation. These
purchases represent 4.5% of opening period share capital and cost
GBP12.8 million.
A further 186,500 Ordinary shares have been bought back for
cancellation at a cost of GBP1.5 million between 31 July 2015 and
15 September 2015. The Board continues to monitor the discount at
which the share price trades to the net asset value and will make
judicious use of share buybacks. At 15 September 2015 the discount
was 8.9%.
Promotional Activity
The Board continues to promote the Company through the Manager's
initiative, which provides a series of savings schemes through
which savers can invest in the Company in a low-cost and convenient
manner.
Up-to-date information about the company, including monthly
factsheets, interviews with the Manager and the latest net asset
value and price of the Ordinary shares may be found on the
Company's website at www.northamericanincome.co.uk.
Annual General Meeting ("AGM")
The Company's AGM was held in Edinburgh on 28 May 2015 at which
all resolutions, including the continuation of the Company, were
passed by shareholders. A further vote on continuation will be put
to shareholders in accordance with the articles in 2018.
Investment Manager
On 30 June 2015, Ralph Bassett and Fran Radano assumed the
management of our portfolio. They are experienced members of
Aberdeen Asset Management's North American Equities team based in
Philadelphia. They succeeded Paul Atkinson, formerly Head of North
American Equities, who left Aberdeen to return to Europe with his
family.
Aberdeen's approach is very much team-based with a strong
emphasis on the fundamentals of individual companies. Ralph and
Fran continue to adhere to this well-developed investment
philosophy.
The Board would like to thank Paul for his considerable
contribution in developing the investment policy for the Company
and the establishment of our portfolio, since he assumed
responsibility for management of our assets in 2012.
Outlook
The US market has been struggling to digest the potential for
rising interest rates domestically while also reacting to macro
events abroad. The notion of the US market de-coupling from other
key global economies has been reinforced with continued reductions
in unemployment levels, increases in wages and still muted
inflation levels. However, this has also, in part, caused some of
the more recent currency moves. Slowing growth in China has
exacerbated matters, as has weakness in commodity prices.
(MORE TO FOLLOW) Dow Jones Newswires
September 17, 2015 02:00 ET (06:00 GMT)
External events such as the Iran nuclear agreement, the debt
crisis in Greece, weakness in energy prices and slower growth in
China will continue to dominate the headlines and drive short-term
market sentiment and direction. The macroeconomic backdrop remains
constrained, but business fundamentals should provide support for
the equity markets. Balance sheets remain healthy and will allow
for continued investment into businesses as well as additional
shareholder distributions. Corporate appetite for deal-making has
also increased. It is expected that the Federal Reserve will start
to raise interest rates later this year, or in early 2016, which
should provide support for equities although perhaps slower growth
abroad is a broader concern. We continue to believe that our
Manager's bottom-up investment process should help in this
environment, finding value in these markets and delivering on the
Trust's objectives of above average dividend income together with
long term capital growth.
James Ferguson
Chairman
16 September 2015
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks facing the Company relate to the Company's
investment activities and include market risk (comprising interest
rate risk and other price risk), liquidity risk and credit risk. An
explanation of these risks and how they are managed is contained in
note 18 to the financial statements in the 2015 Annual Report. The
Board has adopted a matrix of the key risks that affect its
business.
Market and performance risk
The Company is exposed to the effect of variations in share
prices and movements in the US$/GBP exchange rate due to the nature
of its business. A fall in the market value of its portfolio would
have an adverse effect on shareholders' funds.
Gearing risk
As at 31 July 2015 the Company had GBP40.6 million of
borrowings. Gearing has the effect of exacerbating market falls and
gains. In order to manage the level of gearing, the Board has set a
maximum gearing ratio of 20% of net assets.
Discount volatility
The Company's share price can trade at a discount to its
underlying net asset value. The Board monitors the discount level
of the Company's shares and will consider share buybacks when the
discount exceeds 5% for any significant period of time assuming
normal market conditions.
Regulatory risk
The Company operates in a complex regulatory environment and
faces a number of regulatory risks. Breaches of regulations, such
as Section 1158 of the Corporation Tax Act 2010, the UKLA Listing
Rules and the Companies Acts, could lead to a number of detrimental
outcomes and reputational damage. The Audit Committee monitors
compliance with regulations by reviewing internal control reports
from the Manager.
Dividend
The ability of the Company to pay dividends and any future
dividend growth will depend primarily on the level of income
received from its investments (which may be affected by currency
movements, exchange controls or withholding taxes imposed by
jurisdictions in which the Company invests) and the timing of
receipt of such income by the Company. Accordingly, there is no
guarantee that the Company's dividend income objective will
continue to be met and the amount of the dividends paid to Ordinary
Shareholders may fluctuate and may go down as well as up.
Derivatives
The Company uses derivatives primarily to enhance the income
generation of the Company. The risks associated with such contracts
are managed within guidelines set by the Board.
Debt securities
Any debt securities that may be held by the Company will be
affected by general changes in interest rates that will in turn
result in increases or decreases in the market value of those
instruments. When interest rates decline, the value of the
Company's investments in fixed rate debt obligations can be
expected to rise and, when interest rates rise, the value of those
investments may decline. Adverse changes in the financial position
of an issuer of debt securities or general economic conditions may
impair the ability of the issuer to meet interest payments and
repayments of principal.
Accordingly, debt securities that may be held by the Company
will also be subject to the inherent credit or default risks
associated with the debt securities and there can be no assurance
as to the levels of default and/or recovery that may be experienced
by the Company with regard to such securities.
GOING CONCERN
The Company's assets comprise mainly readily realisable
securities which can be sold to meet funding commitments if
necessary. The Company has a bank credit facility in place which is
available until July 2017. The Board considers that the Company has
adequate financial resources to continue in operational existence
for the foreseeable future. The Directors believe that it is
appropriate to prepare the financial statements on a going concern
basis.
DIRECTORS' RESPONSIBILITY STATEMENT
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 Financial Reporting Standard 104 (Interim Financial
Reporting);
- the Half-Yearly Board Report includes a fair review of the
information required by rule 4.2.7R of the Disclosure and
Transparency Rules (being 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 Financial Statements and a
description of the principal risks and uncertainties for the
remaining six months of the financial year); and
- the Half-Yearly Board Report includes a fair review of the
information required by 4.2.8R (being related party transactions
that have taken place during the first six months of the financial
year and that have materially affected the financial position of
the Company during that period; and any changes in the related
party transactions described in the last Annual Report that could
do so).
The Half-Yearly Financial Report for the six months ended 31
July 2015 comprises the Interim Board Report, the Directors'
Responsibility Statement and the condensed set of Financial
Statements.
For and on behalf of the Board of The North American Income
Trust plc
James Ferguson
Chairman
16 September 2015
FINANCIAL HIGHLIGHTS
31 July 31 January % change
2015 2015
Net asset value per Ordinary
share 885.4p 938.9p -5.7
Share price per Ordinary
share (mid) 803.5p 865.0p -7.1
Discount to net asset
value 9.3% 7.9%
Revenue return per Ordinary
share{A} 17.3p 13.8p +25.4
Interim dividends 13.0p{B} 12.0p{C} +8.3
{A} Comparison uses the six months ended 31 July
2014.
{B} Includes a first interim dividend of 6.50p
paid on 31 July 2015 and a second interim dividend
of 6.50p payable on 30 October 2015.
{C} Interim dividend for the six months ended
31 July 2014.
PERFORMANCE - TOTAL RETURN
Six months Year ended
ended
31 July 2015 31 January
2015
Net asset value per Ordinary
share -3.9% +15.5%
Share price per Ordinary
share -5.1% +18.9%
S&P 500 Index (in sterling
terms) +2.6% +25.0%
INVESTMENT PORTFOLIO - EQUITIES
As at 31 July 2015
Total
Valuation portfolio
Company Industry classification GBP'000 %
Philip Morris Tobacco 12,997 4.3
Diversified Telecommunication
Verizon Communications Services 11,148 3.7
Microsoft Systems Software 10,481 3.5
Sysco Food & Staples Retailing 9,558 3.2
Molson Coors Brewing Beverages 9,406 3.1
CME Group Investment Services 9,244 3.1
Real Estate Investment
Ventas Trusts (REITs) 9,235 3.1
Pepsico Beverages 9,166 3.1
Dow Chemical Chemicals 9,006 3.0
Procter & Gamble Household Products 8,542 2.8
Ten largest equity
investments 98,783 32.9
Commercial Services
Republic Services & Supplies 8,501 2.8
Wells Fargo Commercial Banks 8,170 2.7
Potash Corp of Saskatchewan Chemicals 8,012 2.7
CMS Energy Multi-Utilities 7,977 2.7
Diversified Telecommunication
Telus Services 7,940 2.6
Target Multiline Retail 7,777 2.6
WEC Energy Multi-Utilities 7,523 2.5
Oil, Gas & Consumable
TransCanada Fuels 7,511 2.5
(MORE TO FOLLOW) Dow Jones Newswires
September 17, 2015 02:00 ET (06:00 GMT)
Oil, Gas & Consumable
Chevron Fuels 7,496 2.5
Kraft Heinz Food Products 6,971 2.4
Twenty largest equity
investments 176,661 58.9
Oil, Gas & Consumable
ConocoPhillips Fuels 6,944 2.3
Pfizer Pharmaceuticals 6,932 2.3
National Oilwell Energy Equipment
Varco & Services 6,782 2.3
Telecommunications
Cisco Systems Equipment 6,713 2.2
Starwood Hotels Hotels, Restaurants
& Resorts & Leisure 6,489 2.2
Johnson & Johnson Pharmaceuticals 6,357 2.1
Lockheed Martin Aerospace & Defense 6,241 2.1
Semiconductors &
Intel Semiconductor Equipment 6,153 2.0
Paychex IT Services 6,120 2.0
M&T Bank Commercial Banks 6,060 2.0
Thirty largest equity
investments 241,452 80.4
Real Estate Investment
Digital Realty Trust Trusts (REITs) 5,906 2.0
Sonoco Products Containers & Packaging 5,891 2.0
Nucor Metals & Mining 5,859 1.9
Royal Bank of Canada Commercial Banks 5,732 1.9
Emerson Electric Electrical Equipment 5,399 1.8
Blackrock Capital Markets 4,375 1.5
Staples Specialty Retail 3,503 1.2
Regions Financial Commercial Banks 3,329 1.1
Praxair Chemicals 2,553 0.8
Freeport-McMoRan Metals & Mining 26 0.0
Total equity investments 284,025 94.6
INVESTMENT PORTFOLIO - FIXED INTEREST
As at 31 July 2015
Total
Valuation portfolio
Company Industry classification GBP'000 %
General Electric Capital
7.125% Non-Cum Perp Diversified Financial
Pref Services 2,615 0.9
Qwest 7.25% 15/10/35 Telephone Communications 2,401 0.8
Onemain Financial Holdings
6.75% 15/12/19 Specialty Finance 2,033 0.7
HSBC Finance 6.676%
15/01/21 Consumer Finance 2,022 0.7
International Lease Diversified Financial
Finance Corp 6.25% 15/05/19 Services 1,680 0.6
Cincinnati Bell 8.375% Diversified Telecommunication
15/10/20 Services 1,015 0.3
First Data 7.375% 15/06/19 IT Services 935 0.3
First Quantum Minerals
7.25% 15/05/22 Metals & Mining 812 0.3
Post Holdings 7.375%
15/02/22 Food Products 756 0.3
Seagate HDD Cayman 4.75% Computer & Office
01/06/23 Equipment 650 0.1
Ten largest fixed interest
investments 14,919 5.0
Corrections Corporation Real Estate Investment
of America 4.625% 01/05/23 Trusts (REITs) 636 0.2
Thrifts & Mortgage
Nationstar 6.5% 01/06/22 Finance 585 0.2
Total fixed interest
investments 16,140 5.4
Total investments 300,165 100.0
GEOGRAPHICAL ANALYSIS
As at 31 July 2015
Equities Bonds Total
Country % % %
Canada 9.7 0.3 10.0
USA 84.9 5.1 90.0
________ ________ ________
94.6 5.4 100.0
________ ________ ________
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 31
July 2015
(unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
(Losses)/gains on investments - (15,993) (15,993)
Net currency gains - 1,121 1,121
Income (note 2) 7,416 - 7,416
Investment management fee (348) (813) (1,161)
Administrative expenses
(note 3) (358) - (358)
________ ________ ________
Net return before finance
costs and taxation 6,710 (15,685) (8,975)
Finance costs (125) (292) (417)
________ ________ ________
Return on ordinary activities
before taxation 6,585 (15,977) (9,392)
Taxation (note 4) (1,023) 223 (800)
________ ________ ________
Return on ordinary activities
after taxation 5,562 (15,754) (10,192)
________ ________ ________
Return per share (pence)
(note 6) 17.33 (49.09) (31.76)
________ ________ ________
The total column of this statement represents
the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses
has not been prepared as all gains and losses
are recognised in the Condensed Statement of
Comprehensive Income.
All revenue and capital items in the above statement
derive from continuing operations.
No operations were acquired or discontinued in
the period.
Six months ended 31
July 2014
(unaudited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
(Losses)/gains on investments - 15,238 15,238
Net currency gains - 175 175
Income (note 2) 6,231 - 6,231
Investment management fee (338) (789) (1,127)
Administrative expenses
(note 3) (341) - (341)
________ ________ ________
Net return before finance
costs and taxation 5,552 14,624 20,176
Finance costs (54) (126) (180)
________ ________ ________
Return on ordinary activities
before taxation 5,498 14,498 19,996
Taxation (note 4) (899) 196 (703)
________ ________ ________
Return on ordinary activities
after taxation 4,599 14,694 19,293
________ ________ ________
Return per share (pence)
(note 6) 13.80 44.07 57.87
________ ________ ________
CONDENSED STATEMENT OF FINANCIAL POSITION
As at As at
31 July 31 January
2015 2015
(unaudited) (audited)
Notes GBP'000 GBP'000
Non-current assets
Investments at fair value through
profit or loss 300,165 342,722
________ ________
Current assets
Debtors and prepayments 754 712
Cash and short-term deposits 19,935 9,231
________ ________
20,689 9,943
________ ________
Creditors: amounts falling
due within one year
Bank loans (7,908) (8,158)
Other creditors (1,795) (1,247)
________ ________
(9,703) (9,405)
(MORE TO FOLLOW) Dow Jones Newswires
September 17, 2015 02:00 ET (06:00 GMT)
________ ________
Net current assets 10,986 538
________ ________
Total assets less current liabilities 311,151 343,260
________ ________
Creditors: amounts falling due after
more than one year
Bank loan (32,711) (33,987)
________ ________
Net assets 278,440 309,273
________ ________
Capital and reserves
Called-up share capital 7,862 8,235
Share premium account 48,467 48,467
Capital redemption reserve 14,698 14,325
Capital reserve 8 200,305 228,822
Revenue reserve 7,108 9,424
________ ________
Equity shareholders' funds 278,440 309,273
________ ________
Net asset value per share (pence) 9 885.42 938.92
________ ________
CONDENSED STATEMENT OF CHANGES IN EQUITY
Six months ended
31 July 2015 (unaudited)
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 January
2015 8,235 48,467 14,325 228,822 9,424 309,273
Buyback of Ordinary
shares (373) - 373 (12,763) - (12,763)
Return on ordinary
activities after
taxation - - - (15,754) 5,562 (10,192)
Dividends paid (note
5) - - - - (7,878) (7,878)
_____ _______ ________ ______ ______ ______
Balance at 31 July
2015 7,862 48,467 14,698 200,305 7,108 278,440
_____ _______ ________ ______ ______ ______
Six months ended
31 July 2014 (unaudited)
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 January
2014 8,335 48,467 14,225 193,047 7,878 271,952
Buyback of Ordinary
shares (7) - 7 (202) - (202)
Return on ordinary
activities after
taxation - - - 14,694 4,599 19,293
Dividends paid (note
5) - - - - (5,334) (5,334)
_____ _______ ________ ______ ______ ______
Balance at 31 July
2014 8,328 48,467 14,232 207,539 7,143 285,709
_____ _______ ________ ______ ______ ______
CONDENSED STATEMENT OF CASH FLOWS
Six months Six months
ended ended
31 July 31 July
2015 2014
(unaudited) (unaudited)
GBP'000 GBP'000
Net return on ordinary activities
before taxation (8,975) 20,176
Adjustment for:
Losses/(gains) on investments 15,993 (15,238)
Foreign exchange gains (1,121) (175)
Amortisation of fixed income
book cost 11 (38)
Increase in accrued income (33) (100)
Increase in other debtors (23) (1,991)
Increase in other creditors 887 517
________ ________
Net cash inflow from operating
activities 6,739 3,151
Servicing of finance
Interest paid (605) (180)
Taxation
Overseas withholding tax paid (938) (628)
________ ________
Net tax paid (938) (628)
Financial investment
Purchases of investments (48,379) (35,343)
Sales of investments 74,933 41,769
________ ________
Net cash inflow from financial
investment 26,554 6,426
Equity dividends paid (7,878) (5,334)
________ ________
Net cash inflow before financing 23,872 3,435
Financing
Buyback of Ordinary shares (12,763) (202)
Drawdown of bank loan - 15,817
________ ________
Net cash (outflow)/inflow from
financing (12,763) 15,615
________ ________
Increase in cash 11,109 19,050
________ ________
Analysis of changes in cash
during the period
Opening net debt (32,914) (7,274)
Increase in cash as above 11,109 19,050
Foreign exchange movements 1,121 175
Drawdown of bank loan - (15,817)
________ ________
Closing net debt (20,684) (3,866)
________ ________
NOTES:
1. Accounting policies
(a) Basis of accounting
The condensed financial statements have
been prepared in accordance with Financial
Reporting Standard 104 (Interim Financial
Reporting) and with the Statement of Recommended
Practice for 'Financial Statements of Investment
Trust Companies and Venture Capital Trusts'.
They have also been prepared on a going
concern basis and on the assumption that
approval as an investment trust will continue
to be granted.
These condensed financial statements are
the first since FRS 102 (The Financial
Reporting Standard applicable in the UK
and Republic of Ireland) came into effect
for accounting periods beginning on or
after 1 January 2015. An assessment of
the impact of adopting FRS 102 has been
carried out and found that no restatement
of balances as at the transition date,
1 January 2014, or comparative figures
in the Condensed Statement of Financial
Position or the Condensed Statement of
Comprehensive Income is considered necessary.
The interim financial statements have been
prepared using the same accounting policies
as the preceding annual financial statements.
Six months Six months
ended ended
31 July 31 July
2015 2014
2. Income GBP'000 GBP'000
Income from overseas listed
investments
Dividend income 5,359 4,387
REIT income 287 330
Interest income from investments 485 746
________ ________
6,131 5,463
________ ________
Other income from investment
activity
Traded option premiums 1,285 767
Deposit interest - 1
________ ________
1,285 768
________ ________
Total income 7,416 6,231
________ ________
Six months Six months
ended ended
31 July 31 July
2015 2014
(unaudited) (unaudited)
3. Administration expenses GBP'000 GBP'000
(MORE TO FOLLOW) Dow Jones Newswires
September 17, 2015 02:00 ET (06:00 GMT)
Directors' fees 38 27
Secretarial and administration
fees 52 51
Marketing contribution 106 106
Auditor's remuneration:
fees payable to the Company's
auditor for the audit of the
annual accounts 8 8
Custodian charges 13 16
Registrar's fees 28 38
Professional fees 36 27
Depositary charges 19 3
Other 58 65
________ ________
358 341
________ ________
4. Taxation
The taxation expense reflected in the Condensed
Statement of Comprehensive Income is based
on the estimated annual tax rate expected for
the full financial year. The estimated annual
corporation tax rate used for the year to 31
January 2016 is an effective rate of 20.17%.
This is above the current corporation tax rate
of 20% as, prior to 1 April 2015, the prevailing
corporation tax rate was 21%.
Detailed below is an analysis of the tax charge
for each period.
Six months ended Six months ended
31 July 2015 31 July 2014
Revenue Capital Total Revenue Capital Total
Taxation GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
UK corporation
tax 223 (223) - 238 (238) -
Overseas tax
suffered 800 - 800 661 - 661
________ ________ _______ ________ ________ _______
Current tax
charge for
the period 1,023 (223) 800 899 (238) 661
Deferred taxation - - 42 42
________ ________ _______ ________ ________ _______
Total tax 1,023 (223) 800 899 (196) 703
________ ________ _______ ________ ________ _______
Six months Six months
ended ended
31 July 31 July
2015 2014
5. Dividends GBP'000 GBP'000
3rd interim dividend for 2015
- 6.5p (2014 - 6.0p) 2,141 2,000
Final dividend for 2015 - 11.5p
(2014 - 10.0p) 3,679 3,334
1st interim dividend for 2016 2,058 -
- 6.5p
________ ________
7,878 5,334
________ ________
The Company pays four dividends per year.
The first interim dividend of 6.5p (2015 -
6.0p) for the year ending 31 January 2016
was paid on 31 July 2015 to shareholders on
the register at 3 July 2015, with an ex-dividend
date of 2 July 2015. A second interim dividend
of 6.5p (2015 - 6.0p) for the year ending
31 January 2016 will be paid on 30 October
2015 to shareholders on the register at 2
October 2015. The ex-dividend date is 1 October
2015.
Six months Six months
ended ended
31 July 31 July
2015 2014
6. Return per Ordinary share GBP'000 GBP'000
Based on the following figures:
Revenue return 5,562 4,599
Capital return (15,754) 14,694
________ ________
Total return (10,192) 19,293
________ ________
Weighted average number of
shares in issue 32,095,089 33,336,648
________ ________
p p
Revenue return per Ordinary
share 17.33 13.80
Capital return per Ordinary
share (49.09) 44.07
________ ________
Total return per Ordinary share (31.76) 57.87
________ ________
7. Transaction costs
During the six months ended 31 July 2015 expenses
were incurred in acquiring or disposing of
investments classified as fair value through
profit or loss. These have been expensed through
capital and are included within (losses)/gains
on investments in the Condensed Statement
of Comprehensive Income. The total costs were
as follows:
Six months Six months
ended ended
31 July 31 July
2015 2014
GBP'000 GBP'000
Purchases 63 35
Sales 116 50
________ ________
179 85
________ ________
8. Capital reserve
The capital reserve reflected in the Statement
of Financial Position at 31 July 2015 includes
gains of GBP42,958,000 (31 January 2015 -
GBP65,139,000) which relate to the revaluation
of investments held at the reporting date.
As at As at
9. Net asset value per Ordinary 31 July 31 January
share 2015 2015
Net assets attributable (GBP'000) 278,440 309,273
Number of Ordinary shares in
issue 31,447,234 32,939,082
Net asset value per Ordinary
share (p) 885.42 938.92
At Exchange At
1 February Cashflow movements 31 July
2015 2015
10. Analysis of changes GBP'000 GBP'000 GBP'000 GBP'000
in net debt
Cash and short
term deposits 9,231 11,109 (1,905) 18,435
Bank loans (42,145) - 3,026 (39,119)
________ ________ ________ ________
(32,914) 11,109 1,121 (20,684)
________ ________ ________ ________
11. Fair value hierarchy
FRS 102 requires an entity to classify fair
value measurements using a fair value hierarchy
that reflects the significance of the inputs
used in making the measurements. The fair
value hierarchy shall have the following classifications:
Class A: quoted prices for identical instruments
in active markets;
Class B: prices of recent transactions for
identical instruments; and
Class C: valuation techniques using observable
and unobservable market data.
The financial assets and liabilities measured
at fair value in the Statement of Financial
Position are grouped into the fair value hierarchy
at the reporting date as follows:
Class C
Observable Unobservable
Class Class Inputs Inputs Total
A B
As at 31 July Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
2015
Financial
assets at
fair value
through profit
or loss
Quoted equities a) 284,025 - - - 284,025
Quoted bonds b) 16,140 - - - 16,140
_______ _______ ________ ________ _______
Total 300,165 - - - 300,165
_______ _______ ________ ________ _______
Financial liabilities at fair value through
profit or loss
Derivatives c) (387) - - - (387)
_______ _______ ________ ________ _______
Net fair value 299,778 - - - 299,778
_______ _______ ________ ________ _______
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