PREMIER UK DUAL RETURN TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
The Directors announce the unaudited statement of results for the year ended 30
November 2006 as follows:
CHAIRMAN'S STATEMENT
During the year to 30 November 2006, the FTSE All-Share Index provided a
further strong performance with a total return of 17.4%, and the fourth
successive year in which the UK stock market has risen. Against this
background, your Company's investments performed well and the gearing by bank
debt enabled the Company's assets attributable to shareholders to provide a
total return of 23.3%.
Asset Performance
The Company's Growth portfolio, comprised of UK equities, provided a total
return of 18.5% for the year, out-performing the FTSE All-Share Index which was
up 17.4% (total return). The Investment Trust Income Share portfolio also
outperformed the UK market with a total return of 24.5%. The Bond portfolio
generated a 12.0% total return, contributing capital growth as well as a high
running yield. All these figures are before deduction of bank interest and
expenses.
The total return on the gross assets of the Company before expenses was 18.8%,
marginally ahead of the return on the FTSE All-Share Index. After allowing for
expenses (including bank interest) the total return on the Company's gross
assets was 13.5% (after adding back dividends distributed for the year) and the
total return on assets attributable to shareholders was 23.3%.
Income
Earnings per share were 1.49p, compared to 1.90p for the previous year.
However, the 2005 earnings were inflated by the large terminal dividend from
BFS Income and Growth Trust. The total dividend distribution to Income
shareholders for the year will be 1.80p per Income share, this includes the
fourth interim dividend of 0.60p per Income share declared by the Directors and
payable on 31 January 2007 (total of 2.20p in the previous year). Once the
fourth interim dividend has been paid, the total dividend distribution will
utilise �1,314,000 of revenue reserves, reducing the reserve to �218,000 or
0.30p per Income share.
Outlook
With the projected wind-up of the Company now less than one year away, the
Board will pay particular regard to the liquidity of the portfolio to enable
investments to be liquidated. The Directors, in conjunction with our Managers
and larger shareholders, will consider appropriate options for a continuation
or roll over if there is sufficient demand from shareholders.
Despite the strong recovery in the UK market since the low points of 2003, our
Managers consider that UK equity valuations will be supported by earnings and
by merger and acquisition activity. At this stage it is our intention to
remain fully invested. However, the Board will keep the level of market
exposure under review as the wind-up date approaches.
Garth Milne
Chairman
24 January 2007
INCOME STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2006
2006 2005
(Restated*)
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains on investments
at fair value
- 4,581 4,581 - 4,166 4,166
Dividends and 1,734 - 1,734 2,070 - 2,070
interest
Payment to
liquidators of Tor
- (4) (4) - (79) (79)
Investment
management fee
(103) (241) (344) (94) (219) (313)
Movement in value of
Interest rate swaps
- 311 311 - 96 96
Other expenses (217) - (217) (265) - (265)
Return on ordinary
activities before
finance costs in
respect of
shareholders and
taxation
1,414 4,647 6,061 1,711 3,964 5,675
Finance costs
Interest paid and
similar charges
(324) (757) (1,081) (325) (758) (1,083)
Dividends paid in
respect of Income
shares (1,606) - (1,606) (1,424) - (1,424)
Appropriations in
respect of:
- Zero Dividend
Preference shares - (3,890) (3,890) - (3,206) (3,206)
- Income shares 521 - 521 38 - 38
- Capital shares - - - - - -
Return on ordinary
activities after
finance costs in
respect of
shareholders but
before taxation
5 - 5 - - -
Taxation (5) - (5) - - -
- - - - - -
Return per share pence pence pence pence pence pence
(FRS 25 basis):
Zero Dividend
Preference shares
- 13.17 13.17 - 12.10 12.10
Income shares 1.49 0.26 1.75 1.90 0.26 2.16
Capital shares - 1.36 1.36 - 0.90 0.90
Return per share pence pence pence pence pence pence
(Articles basis):
Zero Dividend
Preference shares
- 23.11 23.11 - 19.05 19.05
Income shares 1.49 - 1.49 1.90 - 1.90
Capital shares - - - - - -
* See notes 1 and 4.
The total column of this statement represents the Company's income statement,
prepared in accordance with revised UK GAAP. The supplementary revenue return
and capital return columns are both prepared under guidance published by the
Association of Investment Companies.
This preliminary announcement has been prepared in accordance with the
accounting policies in note 1.
All items in the above statement derive from continuing operations.
BALANCE SHEET
AS AT 30 NOVEMBER 2006
2006 2005
�'000 �'000
(Restated*)
Fixed assets
Investments at fair value 36,732 33,362
Current assets
Debtors 716 394
Cash at bank 1,549 2,059
2,265 2,453
Creditors - amounts falling due
within one year
Bank loans (14,996) -
Interest rate swap liabilities (128) -
Creditors (652) (531)
(15,776) (531)
Total assets less current
liabilities
23,221 35,284
Creditors - amounts falling due
after more than one year
Bank loans - (14,993)
Interest rate swap liabilities - (439)
- (15,432)
Assets attributable to 23,221 19,852
shareholders
Liabilities due to shareholders
- Zero Dividend Preference share
entitlement
(22,565) (18,675)
- Income share entitlement (656) (1,177)
- Capital share entitlement - -
(23,221) (19,852)
- -
Net asset values per share:
Zero Dividend Preference share 134.08p 110.96p
Income share 0.90p 1.61p
Capital share - -
* See notes 1 and 4.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 NOVEMBER 2006
2006 2005
�'000 �'000
Operating activities
Investment income received 1,633 1,981
Deposit interest received 79 65
Payment to Liquidator of Tor (83) -
Investment management fees paid (335) (345)
Secretarial fees paid (71) (69)
Other cash payments (123) (195)
Net cash inflow from operating activities 1,100 1,437
Servicing of finance
Interest paid (1,067) (1,077)
Net cash outflow from servicing of finance (1,067) (1,077)
Taxation
Tax refund - 41
Net cash inflow from taxation - 41
Capital expenditure and financial investment
Purchases of investments (11,467) (75,793)
Sales of investments 12,530 77,608
Net cash inflow from capital expenditure and
financial investment
1,063 1,815
Income share dividends paid (1,606) (1,424)
Net cash (outflow)/ inflow before and after (510) 792
financing
(Decrease)/increase in cash (510) 792
NOTES
1) Accounting Policies
i) Basis of preparation
This preliminary announcement has been prepared under the historical cost
convention as modified by the revaluation of certain investments and in
accordance with applicable law and Accounting Standards in the United Kingdom
and with the 2003 Statement of Recommended Practice "Financial Statements of
Investment Trust Companies" ("SORP") revised in 2005 and in accordance the with
accounting policies set out in the statutory accounts for the year ended 30
November 2005 except as explained in note ii) below.
While the financial information included in this preliminary announcement has
been computed in accordance with United Kingdom Generally Accepted Accounting
Practice this announcement does not itself contain sufficient information to
comply with UK GAAP. The Company expects to publish full financial statements
that comply with UK GAAP in February 2007.
ii) Changes in accounting policies
This preliminary announcement has been prepared using new accounting standards,
which have been issued to begin the process of converging UK standards with
International Financial Reporting Standards ("IFRS"). These new standards have
been adopted by the Company with effect from 1 December 2005.
FRS 21 Events after the balance sheet date
Dividends paid by the Company are now accounted for in the period in which the
dividend has been paid. Previously, the Company recognised dividends in the
period to which those dividends declared were related.
FRS 25 Financial instruments: disclosure and presentation and FRS 26 financial
instruments: measurement
All investments held by the Company are now classified as 'at fair value
through profit or loss'. For investments actively traded in organised financial
markets, fair value is generally determined by reference to Stock Exchange
quoted market bid prices at the close of business on the balance sheet date.
Previously all quoted investments were valued using closing mid market prices
at the balance sheet date. The effect of the changes on the net asset values of
the Company from using bid prices is given in Note 4.
The Company uses derivative financial instruments in the form of Interest rate
swap contracts to hedge its exposure to fluctuations in the floating rate
applicable to the Company's �15 million loan facilities. These are not
accounted for as effective hedges under FRS 26. These derivatives are
classified as 'fair value through profit or loss' and movements in the fair
value of these derivatives are recorded through the income statement and
allocated to capital. Previously the derivatives have not been assigned a value
and were not recognised within the Company's accounts.
Zero Dividend Preference shares, Income shares and Capital shares
Under FRS 25, the Zero Dividend Preference shares, Income shares and Capital
shares are now classed as liabilities, falling due on 30 November 2007, in
order that the rights and obligations attributable to the Zero Dividend
Preference, Income and Capital shareholders are more appropriately reflected in
the accounts. This is because, in the Company's Articles of Association, there
is no unconditional right for the Company to avoid repaying all share classes
their entitlement, if required to do so, on that date. This means share capital
and reserves are no longer shown on the balance sheet. These changes are
presentational and have no impact on the Company's net asset values per share
or returns per share, which are calculated using assets attributable to
shareholders and finance costs in respect of Zero Dividend Preference shares,
Income shares and Capital shares respectively.
2) Fourth interim dividend for the financial year ended 30 November 2006
The Directors have declared a fourth interim dividend of 0.60p per Income
share, payable on 31 January 2007 to the holders of Income shares on the
Register at 19 January 2007.
3) RETURN PER SHARE
FRS 25 Accounting basis
Returns per share shown on the FRS 25 accounting basis do not take account of
overall deficits arising in respect of a particular class of share and have
been calculated based on the following returns attributable to each class of
share:
Year ended 30 Year ended 30 2006 2005
November 2006 November 2005
Average Average
(Restated*) number
number
Revenue Capital Total Revenue Capital Total of shares of shares
�'000 �'000 �'000 �'000 �'000 �'000
Zero
Dividend
Preference
shares
- 2,216 2,216 - 2,036 2,036 16,830,000 16,830,000
Income
shares
1,085 193 1,278 1,386 193 1,579 73,000,000 73,000,000
Capital
shares
- 1,481 1,481 - 977 977 109,000,000 109,000,000
1,085 3,890 4,975 1,386 3,206 4,592
Articles of Association basis
Returns per share calculated on the Articles of Association basis are cognisant
of the actual assets available for each class of share and have been calculated
based on the following returns attributable to each class of share:
Year ended 30 Year ended 30 2006 2005
November 2006 November 2005
Average Average
(Restated*) number
number
Revenue Capital Total Revenue Capital Total of shares of shares
�'000 �'000 �'000 �'000 �'000 �'000
Zero
Dividend
Preference - 3,890 3,890 - 3,206 3,206 16,830,000 16,830,000
shares
Income
shares
1,085 - 1,085 1,386 - 1,386 73,000,000 73,000,000
Capital
shares
- - - - - - 109,000,000 109,000,000
1,085 3,890 4,975 1,386 3,206 4,592
* See notes 1 and 4.
There are no dilutive elements within the Company.
4) NET ASSET VALUES
Reconciliation of changes to the net asset values resulting from accounting
policy changes:
30 November 2005
Zero Dividend Income shares Capital shares
Preference shares
�'000 pence �'000 pence �'000 pence
Original net
asset values
19,214 114.17 447 0.61 - -
Restatement
under revised
UK GAAP
- Restatement
of investments
to 'bid'
valuations
(100) (0.60) - - - -
- Restatement
of dividends
declared - - 730 1.00 - -
- Value of
Interest rate
swaps (439) (2.61) - - - -
liabilities
Net asset
values per
revised UK 18,675 110.96 1,177 1.61 - -
GAAP
The net asset values per share have been calculated in accordance with the
revised accounting policies set out in note 1:
Net asset value Net asset value
per share per share
30 November 30 November
2006 2005
(Restated*)
pence pence
Zero Dividend Preference share 134.08 110.96
Income share (accumulated revenue 0.90 1.61
reserve)
Capital share - -
* See notes 1 and 4.
The net asset value per Zero Dividend Preference share is calculated using
assets attributable of �22,565,000 (2005: �18,675,000 restated) and on
16,830,000 (2005: 16,830,000) shares, being the number of Zero Dividend
Preference shares in issue at the year end.
The net asset value per Income share is calculated using assets attributable of
�656,000 (2005: �1,177,000 restated) and on 73,000,000 (2005: 73,000,000)
shares, being the number of Income shares in issue at the year end.
The net asset value per Capital share is calculated using assets attributable
of �nil (2005: �nil) and on 109,000,000 (2005: 109,000,000) shares, being the
number of Capital shares in issue at the year end.
Although under revised UK GAAP the Zero Dividend Preference, Income and Capital
shares are classed as liabilities rather than equity, the table below shows,
for information only, how the assets attributable to them are comprised in
terms of share capital and reserves.
30 November 30 November
2006 2005
�'000 �'000
Assets attributable to shareholders (Restated*)
Share capital 199 199
Capital redemption reserve 1 1
Capital reserve (91,179) (92,660)
Income share reserve 1,192 999
Zero Dividend Preference share reserve 11,022 8,806
Special reserve 101,330 101,330
Revenue reserve 656 1,177
Total 23,221 19,852
* See note 1 and above.
5) RECONCILIATION OF MOVEMENTS IN ASSETS ATTRIBUTABLE TO SHAREHOLDERS
Zero
Dividend
Preference
shares Income Capital
shares shares Total
�'000 �'000 �'000 �'000
Net assets attributable
At 1 December 2005 (as
previously reported)
19,214 447 - 19,661
Restatement under revised UK
GAAP
- Restatement of investments
to 'bid' valuations
(100) - - (100)
- Restatement of dividends - 730 - 730
declared
- Value of Interest rate swap (439) - - (439)
liabilities
At 1 December 2005 (restated) 18,675 1,177 - 19,852
Profit after tax for the year - 1,085 3,890 4,975
Zero Dividend Preference
share appropriation
2,216 - (2,216) -
Income share appropriation - 193 (193) -
Reallocation of balance 1,674 (193) (1,481) -
Income share dividends paid - (1,606) - (1,606)
At 30 November 2006 22,565 656 - 23,221
6) TRANSACTION COSTS
During the year ended 30 November 2006, the Company incurred transaction costs
on the purchase and sale of investments of �46,000 and �19,000 respectively
(2005: �498,000 on purchases and �144,000 on sales). These costs have been
included in gains on investments at fair value, as disclosed in the income
statement.
7) It is the intention of the Directors to conduct the affairs of the Company
so that it satisfies the conditions for approval as an investment trust company
set out in Section 842 of the Income and Corporation Taxes Act 1988.
END
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