TIDMMEQI
M&G Equity Investment Trust P.L.C.
First Interim Results
30 September 2010
Performance during the period
The first quarter of the 2010/11 period has begun with a strong absolute return as both
equity and bond returns were positive. On a net asset (NAV) basis, each Package Unit produced
a positive total return of 11.3% over the three months to September 2010. This was behind the
13.6% positive total return on the FTSE All-Share Index over the same period, reflecting the
weaker performance of bonds against equities and the underperformance of high yield equities.
The Company's revenue earnings per Package Unit were 0.84p. In respect of the review period,
the Company declared a first interim dividend of 2.00p per Income Share which is
significantly ahead of the 1.25p dividend declared in respect of the same period last year.
This reflects the intention to pay out the majority of the available income, including
revenue reserves, well ahead of the Company's wind-up. The absence of revenue reserves and
the nine week final period means that the second and third dividend payments are likely to be
below the equivalent payments last year, although this is not a dividend or profit forecast.
The September annualised rate of inflation was positive 4.6% as measured by the Retail Prices
Index (RPI). At the period end, the Package Unit mid-market price was at a 7.4% discount to
the NAV and on a mid-market basis each Package Unit delivered a positive total return of
6.8%.
Income statement (unaudited)
For the three months ended For year ended
30 September 2010 30 September 2009 30 June 2010
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ------ -------- -------- ------- -------- ------- --------
Net gains on - 15,998 15,998 - 28,796 28,796 - 25,481 25,481
investments
Income 1,868 - 1,868 1,963 - 1,963 8,921 - 8,921
Investment (110) (256) (366) (103) (239) (342) (438) (1,022) (1,460)
management fee
Other expenses (34) - (34) (44) - (44) (235) (325) (560)
------- ------- ------ ------- ------- ------- ------ -------- --------
Net return
before finance 1,724 15,742 17,466 1,816 28,557 30,373 8,248 24,134 32,382
costs and tax
Finance costs: - (2,700) (2,700) - (2,638) (2,638) - (10,704) (10,704)
Appropriations
Finance costs: (3,905) - (3,905) (3,449) - (3,449) (9,963) - (9,963)
Dividends
Finance costs: (226) (529) (755) (224) (523) (747) (893) (2,083) (2,976)
Interest
payable and
similar
charges
------- ------- ------ ------- ------- ------- ------ -------- --------
Net return on
ordinary (2,407) 12,513 10,106 (1,857) 25,396 23,539 (2,608) 11,347 8,739
activities
before tax
Tax on
ordinary (33) 33 - (18) 18 - (77) 77 -
activities
------- ------- ------ ------- ------- ------- ------ -------- --------
Net return on
ordinary (2,440) 12,546 10,106 (1,875) 25,414 23,539 (2,685) 11,424 8,739
activities
after tax
------- ------- ------ ------- ------- ------- ------ -------- --------
Return per
Zero Dividend - 8.78p 8.78p - 16.25p 16.25p - 12.76p 12.76p
Preference
Share
Revenue
earnings / 0.84p - 0.84p 0.91p - 0.91p 4.20p - 4.20p
return per
Income Share
Return per - - - - - - - - -
Capital Share
Total return
per Package 0.84p 8.78p 9.62p 0.91p 16.25p 17.16p 4.20p 12.76p 16.96p
Unit
The total column of this statement is the profit and loss account of the
Company. The revenue return and capital return columns are supplementary to this
and are prepared under the guidance published by the Association of Investment
Companies.
All items in the above statement derive from continuing operations. No
operations were acquired or discontinued during the period.
A statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the above statement.
The Company's Zero Dividend Preference and Income Shares meet the definition of
a liability under FRS 25 and therefore Capital Shares which are subordinate to
all other classes, have been classified as equity. This does not affect the
rights and benefits of each class. The breakdown of the net assets attributable
to shareholders in terms of the share capital and reserves is given in note 10.
Reconciliation of movements in shareholders' funds (Capital Shares) (unaudited)
for the three months ended 30.09.10 30.09.09
GBP'000 GBP'000
---------- ----------
Capital return on ordinary activities after tax 12,546 25,414
Net gains attributable to Income Shares 1 2
Net gains attributable to Zero Dividend Preference (12,547) (25,416)
Shares
---------- ----------
Net movement in net assets attributable to Capital - -
Shares
Opening net assets attributable to Capital Shares - -
---------- ----------
Closing net assets attributable to Capital Shares - -
---------- ----------
Balance sheet
(unaudited)
As at 30.09.10 30.09.09 30.06.10
GBP'000 GBP'000 GBP'000
------- ------- -------
Fixed assets
Portfolio of investments - 193,229 -
------- ------- -------
Current assets
Portfolio of investments 200,153 - 183,033
Debtors 1,207 3,104 1,830
Cash at bank and short term deposits 3,077 2,472 5,181
------- ------- -------
204,437 5,576 190,044
------- ------- -------
Total financial assets 204,437 198,805 190,044
Creditors: Amounts falling due within one year
7.376% Debenture 2011 (40,000) - (40,000)
Share classes defined as a liability:
Zero Dividend Preference Shares (159,322) - (143,150)
Income Shares (3,645) - (6,085)
Other creditors (1,470) (2,733) (809)
------- ------- -------
Total assets less current liabilities - 196,072 -
Creditors: Amounts falling due after more than
one year:
7.376% Debenture 2011 - (39,980) -
Share classes defined as liability:
Zero Dividend Preference Shares - (149,197) -
Income Shares - (6,895) -
------- ------- -------
- (196,072) -
------- ------- -------
Net assets attributable to Capital Shares - - -
------- ------- -------
Capital and Reserves attributable to Capital
Shares comprise:
------- ------- -------
Called up share capital 1,745 1,737 1,735
Share premium account 35,080 35,085 35,085
Capital redemption reserve 487 486 487
Special reserve 7,241 7,242 7,241
Capital reserve - Investment holding gains - - -
/ (losses)
- Other capital (44,553) (44,550) (44,548)
reserves
------- ------- -------
Capital and reserves attributable to Capital - - -
Shares
-------- ------- --------
The net assets attributable to all shareholders at the period end are
GBP162,967,000 (2009: GBP156,092,000). This equates to the total financial assets of
the Company of GBP204,437,000 (2009: GBP198,805,000) less the debenture outstanding
of GBP40,000,000 (2009: GBP39,980,000) and other creditors of GBP1,470,000 (2009:
GBP2,733,000).
The Company's Zero Dividend Preference and Income Shares meet the definition of
a liability under FRS 25 and therefore the Capital Shares which are subordinate
to all other classes of shares have been classified as equity. This does not
affect the rights and benefits of each class. The breakdown of the net assets
attributable to shareholders in terms of the share capital and reserves is given
in note 10.
The net assets attributable to shareholders have been calculated in accordance
with the Company's Articles of Association and the net asset values (per share)
applicable to each class of shareholding as shown below.
The Condensed Financial Statements have been prepared in accordance with the
Statement: Half Yearly Financial Reports issued by the Accounting Standards
Board.
As at 30.09.10 30.09.10 30.06.10
-------- -------- --------
Net asset value per Zero 91.28p 85.89p 82.49p
Dividend Preference Share
Net asset value per Income 2.09p 3.97p 3.51p
Share
Net asset value per Capital - - -
Share
Net asset value per Package 93.37p 89.86p 86.00p
Unit
The net asset values per share are calculated on the basis of
174,544,139 (2009: 173,701,139) shares of each class in issue
and the value per class of share as shown on the Balance
Sheet.
The net asset value of each Zero Dividend Preference Share
has been calculated on the basis that it will grow at a
monthly compound rate of 0.65% to give an entitlement to
100p at 8 March 2011. However, as at 30 September 2010 the
Company had insufficient assets to cover the net asset value
entitlement of the Zero Dividend Preference Shares and the
capital entitlement of the Income Shares. As a result the
capital entitlement of the Capital Shares and Income Shares
is zero. The 91.28p of the Zero Dividend Preference Shares is
equal to the total net assets less that standing to the
revenue reserve, 5.38p less than their current entitlement of
96.66p.
The redemption value of each Income Share on winding-up is
0.10p, subject to prior entitlement of Zero Dividend
Preference Shares.
The net asset value of each Capital Share has been calculated
on the basis of the total net assets of the Company less
amounts attributable to Zero Dividend Preference and Income
Shareholders.
Cash flow
statement
(unaudited)
For the three months ended For the year ended
30.09.10 30.09.09 30.06.10
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ------ -------- -------- -------
Net cash inflow
from operating 1,968 2,132 6,969
activities
Servicing of
finance
Dividends paid (3,905) (3,449) (9,963)
(non-equity)
Annual monitoring (2) (1) (3)
fee paid
Interest paid on - - (2,950)
Debenture Stock
------- ------- -------
(3,907) (3,450) (12,916)
Financial
investment
Purchase of (5,658) (9,454) (52,171)
investments
Sale of 4,567 11,441 61,619
investments
------- ------ -------
(1,091) 1,987 9,448
Financing
Issue of Package
Units (including 926 1,108 1,108
related costs)
Repurchase of
Package Units - - (124)
(including related
costs)
------- ------ -------
926 1,108 984
------- ------- -------
Net (decrease / (2,104) 1,777 4,485
increase in cash
------- ------- -------
Notes to the Financial Statements
1. Principal activity
The Company was incorporated on 3 January 1996 and is a split capital investment
trust company. The affairs of the Company have been conducted with the
objective of enabling it to seek HM Revenue & Customs approval as an investment
trust for the purposes of Section 1158 to 1165 of the Corporation Taxes Act
2010.
2. Accounting policies
The interim financial statements have been prepared in accordance with the
historical cost convention, as modified by the revaluation of investments, in
accordance with applicable United Kingdom Accounting and Financial Reporting
Standards, and the Statement of Recommended Practice: 'Financial Statements of
Investment Trust Companies and Venture Capital Trusts' (SORP) issued by the
Association of Investment Companies (AIC) in January 2009.
The Company has a planned life to 8 March 2011. In accordance with the Company's
Articles of Association the Directors are required to convene a general meeting
of the Company to be held on or immediately prior to 8 March 2011 at which a
resolution will be proposed requiring the Company to be wound up voluntarily
unless the Board has been released from its obligations to do so by a special
resolution of the Company. The Board are reviewing the options available for the
future of the Company. As it is probable that the Company will not continue in
the foreseeable future in its current legal form, the financial statements have
been prepared on a break up basis rather than a going concern basis. As a
consequence, all assets and liabilities are classified as current; investments
continue to be stated at bid price which is a reasonable estimation of their
realisable value with no provision for impairment, and the costs of winding up
the Company have been estimated as GBP325,000 and accrued. The comparative figures
are on a going concern basis.
3. Investments: At fair value through profit or loss
Three months Year ended
ended
30.09.10 30.09.09 30.06.10
Capital Capital Capital
GBP'000 GBP'000 GBP'000
------- ------- -------
Gains / (losses) on disposal
of investments 949 (4,388) (4,350)
Increase in investment holding
gains 15,049 33,184 29,831
------- ------- -------
Net gains on investments 15,998 28,796 25,481
------- ------- -------
4. Income
Three months Year ended
ended
30.09.10 30.09.09 30.06.10
Revenue Revenue Revenue
Income from investments GBP'000 GBP'000 GBP'000
------- ------- -------
Interest on debt
securities 485 395 1,729
Property income dividends - 37 69
Overseas dividends 32 - 26
Stock dividends 184 161 566
UK dividends 1,164 1,367 6,483
------- ------- -------
1,865 1,960 8,873
------- ------- -------
Other income
------- ------- -------
Bank interest 3 1 10
Unclaimed distributions - - 4
Underwriting commission - 2 34
------- ------- -------
3 3 48
------- ------- -------
------- ------- -------
Total income 1,868 1,963 8,921
------- ------- -------
Total income comprises:
------- ------- -------
Dividends 1,380 1,565 7,144
Interest 488 396 1,739
Other income - 2 38
------- ------- -------
1,868 1,963 8,921
------- ------- -------
5.
Investment
management
fee
Three months to 30.09.10 Three months to 30.09.09
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ----------- ----------- ------------ ----------- -------
Investment
management
fee 110 256 366 103 239 342
------------ ----------- ----------- ------------ ----------- -------
Year ending 30.06.10
Revenue Capital Total
GBP'000 GBP'000 GBP'000
------------ ----------- ---------
Investment
management
fee 438 1,022 1,460
------------ ---------- ---------
The Company's investment manager is M&G Investment Management Limited (MAGIM).
The investment management contract between the Company and MAGIM may be
terminated by either party giving not less than one year's written notice of
termination, although in certain circumstances it may be terminated with
immediate effect.
MAGIM receives an annual fee, payable monthly in advance, equal to 0.75% per
annum, of the mid market value of the Company's total assets less its current
liabilities at the beginning of the relevant month.
In certain circumstances a performance related fee may be payable at the end of
the Company's financial year. The conditions and basis upon which such a fee is
paid are disclosed in the Company's Annual Report and Financial Statements.
6. Finance costs: Appropriations
This constitutes an appropriation of reserves in respect of the premium to issue
proceeds payable to holders of Zero Dividend Preference Shares on redemption.
The appropriation for the year represents the increase in redemption value of
the amounts originally subscribed.
7. Finance costs: Dividends
Three months Year ended
ended
30.09.10 30.09.09 30.06.10
Revenue Revenue Revenue
Dividends (payable to Income Shareholders) GBP'000 GBP'000 GBP'000
------- ------- -------
Fourth interim 2010: 2.25p paid 20
September 2010 (2009: 2p) 3,905 3,449 3,449
First interim 2010: 1.25p paid 18 December
2009 (2008: 1.25p) - - 2,171
Second interim 2010: 1.25p paid 19 March
2010 (2009: 1.25p) - - 2,171
Third interim 2010: 1.25p paid 18 June
2010 (2009: 1.25p) - - 2,172
------- ------- -------
3,905 3,449 9,963
------- ------- -------
On 15 November 2010 the Board declared a first interim dividend of 2.0p (2009:
1.25p) per Income Share totalling GBP3,491,000 (2009: GBP2,171,000), payable on 20
December 2010 to Income Shareholders on the register at the close of business on
26 November 2010. The ex-dividend date is 24 November 2010.
The dividend will also be payable to holders of Package Units.
8. Earnings / returns per share
As at 30.09.10 30.09.09 30.06.10
a) Return per Zero Dividend ------- ------- -------
Preference Share
Appropriations GBP2,700,000 GBP2,638,000 GBP10,704,000
Gains offset against Zero
Dividend Preference Shares (note GBP12,547,000 GBP25,416,000 GBP11,426,000
8c)
------- ------- -------
Net capital return attributable
to Zero Dividend Preference GBP15,247,000 GBP28,054,000 GBP22,130,000
shares
Weighted average shares in issue 173,652,835 172,614,182 173,414,829
throughout the period
------- ------- -------
Return per Zero Dividend 8.78p 16.25p 12.76p
Preference share
------- ------- -------
b) Revenue earnings per Income ------- ------- -------
Share
Net revenue return on ordinary GBP(2,440,000) GBP(1,875,000) GBP(2,685,000)
activities after tax
Finance costs: Dividends GBP3,905,000 GBP3,449,000 GBP9,963,000
------- ------- -------
Revenue return attributable to GBP1,465,000 GBP1,574,000 GBP7,278,000
Income shares
Weighted average shares in issue 173,652,835 172,614,182 173,414,829
throughout the period
------- ------- -------
Revenue earnings per Income share 0.84p 0.91p 4.20p
------- ------- -------
------- ------- -------
Capital return attributable to GBP(1,000) GBP(2,000) GBP(2,000)
Income Shareholders (note 8c)
Weighted average shares in issue 173,652,835 172,614,182 173,414,829
throughout the period
------- ------- -------
Capital return per Income share - - -
------- ------- -------
c) Return per Capital Share ------- ------- -------
Net capital return on ordinary GBP12,546,000 GBP25,414,000 GBP11,424,000
activities after tax
Losses offset against Income GBP1,000 GBP2,000 GBP2,000
Shares
Gains offset against Zero GBP(12,547,000) GBP(25,416,000) GBP(11,426,000)
Dividend Preference Shares
------- ------- -------
Net capital return attributable - - -
to Capital shares
Weighted average shares in issue 173,652,835 172,614,182 173,414,829
throughout the period
------- ------- -------
Return per Capital share - - -
------- ------- -------
d) Package units
The earnings and returns per Package Unit are calculated by reference to its
component shares.
9. Share capital (equity and non-equity)
30.09.10 30.09.09 30.06.10
Allotted, called up and fully paid: GBP'000 GBP'000 GBP'000
------- ------- -------
174,544,139 (2009: 173,701,139) Zero Dividend 1,745 1,737 1,735
Preference Shares of 1p each
174,544,139 (2009: 173,701,139) Income Shares of 1,745 1,737 1,735
1p each
174,544,139 (2009: 173,701,139) Capital Shares 1,745 1,737 1,735
of 1p each
------- ------- -------
During the period, the Company issued 1,000,000 shares of each class at an issue
price of 89.27p per Zero Dividend Preference Share, 3.98p per Income Share and
1.00p per Capital Share. The issue price was at a premium of 1% to the Net Asset
Value of the Package Units.
The Company's Zero Dividend Preference and Income Shares meet the definition of
a liability under FRS 25 and therefore the Capital Shares comprise the Company's
Equity Shares.
The Company has authorised share capital of GBP38,850,000 (2009: same) consisting
of 1,295,000,000 (2009: same) shares of each class.
10. Capital and reserves attributable to all shareholders
As at 30.09.10 30.09.09 30.06.10
GBP'000 GBP'000 GBP'000
------- ------- -------
Called up share capital 5,236 5,211 5,206
Share premium account 143,103 142,207 142,207
Capital redemption reserve 1,468 1,463 1,468
Zero Dividend Preference Shares appropriation 110,625 99,957 107,925
reserve
Special reserve 24,982 25,007 24,982
Capital reserves - Investment holding 881 (10,815) (14,168)
gains / (losses)
- Other capital (126,973) (113,833) (124,470)
reserves
Revenue reserve 3,645 6,895 6,085
------- ------- -------
Net assets attributable to all shareholders 162,967 156,092 149,235
------- ------- -------
Zero Dividend Preference Shares 159,322 149,197 143,150
Income Shares 3,645 6,895 6,085
------- ------- -------
Total non-equity shares 162,967 156,092 149,235
Capital Shares (equity) - - -
------- ------- -------
Net assets attributable to all shareholders 162,967 156,092 149,235
------- ------- -------
Under the terms of the Company's Articles of Association sums standing to the
credit of the Special Reserve are available for distribution only by way of
redemption or purchase of any of the Company's own shares. The Company may only
distribute accumulated 'realised' profits.
The Institute of Chartered Accountants of England and Wales has issued guidance
(TECH 01/08), stating that profits arising out of a change in fair value of
assets, recognised in accordance with the Accounting Standards may be
distributed provided the relevant assets can be readily converted into cash.
Securities listed on recognised stock exchanges are generally regarded as being
readily convertible into cash and hence investment holding gains in respect of
such securities currently included within Capital Reserves may be regarded as
distributable under Company Law.
11. Abridged results
The abridged balance sheet for the year ended 30 June 2010 is based on financial
statements which carry an audit report that is unqualified and includes no
matters of adverse comment.
J. P. McClelland
Secretary
[HUG#1463434]
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: M&G Equity Investment Trust PLC via Thomson Reuters ONE
Grafico Azioni M&G Equity (LSE:MEQI)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni M&G Equity (LSE:MEQI)
Storico
Da Giu 2023 a Giu 2024
