RNS Number:3970Y
Resources Investment Trust PLC
14 June 2007
Resources Investment Trust Plc
Interim Report for the Six Months to 31 March 2007
The Directors of Resources Investment Trust Plc announce the interim results for
the six months to 31 March 2007.
The Company
Resources Investment Trust Plc is a self-managed investment trust, listed on the
Official List of the London Stock Exchange.
The Company invests in quoted equities and equity related securities of smaller
companies in the resource sector which are believed to offer value both in terms
of the discounted cash flows of revenue and, where relevant, of discounts to the
net asset value of those companies. The Company also invests in companies that
offer development and/or exploration potential.
At an Extraordinary General Meeting of the Company held on 3 October 2006 a
special resolution was passed by shareholders which instructed the Board to take
action to realise the Company's investments as soon as reasonably practicable so
as to put the Company in a position to return cash to shareholders by way of
share buy-backs and/or the liquidation of the Company and that the investment
policies of the Company be modified accordingly. In that regard, the said
resolution also authorised the Company to make market purchases of its Ordinary
shares following the making of one or more tender offers for up to 5,323,060 of
its Ordinary shares (being 24.99% of its existing Ordinary share capital) and
provided that an Extraordinary General Meeting be convened for a date not later
than 31 July 2007 at which a Special Resolution will be proposed that the
Company be wound up voluntarily.
The Articles of Association, as amended by the said resolution, provide that, in
the event that a single shareholder votes in favour of the resolution to wind up
the Company, such resolution will be passed. In accordance with the terms of
that resolution the Board has instructed that the Company's investments be
realised in an orderly manner with a view to complying with the instruction.
During the period the Company repurchased for cancellation 5,323,060 Ordinary 5p
shares at a cost of #12,889,475 (including expenses) giving a cost of 242p per
share. As at 31 March 2007 there were 15,977,700 Ordinary shares in issue.
In accordance with s170 of the Companies Act 1985 the nominal value of the
ordinary shares repurchased (amounting to #266,153) has been transferred to a
capital redemption reserve.
The Company repaid the 6% Unsecured Loan Stock 2006 in full on 29 December 2006.
Financial Highlights
Performance 31 March 30 September % change
2007 2006
Share price (pence) 220.25 207.50 +6.1
Net asset value per share (pence) 245.73 233.26 +5.3
FTSE All-Share Index 3,283.21 3,050.44 +7.6
HSBC World Mining Index (benchmark) 515.47 398.56 +29.3
Net Asset Value
The net asset value attributable to the Ordinary shares on 31 March 2007 was
245.73p. The share price of the Ordinary shares on 31 March 2007 was 220.25p
indicating a discount to net asset value of 10.4%.
Chairman's Statement
As shareholders would expect, during the six month period to 31 March 2007, your
Board's efforts have been principally concentrated on maintaining the momentum
of the share realisation programme authorised by shareholders at the
Extraordinary General Meeting held on 3 October last year.
I am pleased to report that, at the time of writing, some #47.6 million out of a
total of #49.7 million of investments has been realised and converted into a
combination of cash and liquid fixed interest securities. As your Company's
portfolio was primarily composed of relatively illiquid shares in smaller
resource companies, I would like to take this opportunity to commend Keith,
Bayley, Rogers & Co Limited, who have had responsibility for the realisation
programme, for their diligence and persistence in successfully carrying out what
could have proved a very difficult task. Their ability to complete the great
majority of disposals at a premium to the prevailing bid price was helped by a
generally firm background to the resources sector, the HSBC Global Mining Index
increasing by 29.3% in the six months to 31 March.
The share liquidation programme is still in train and, all other things being
equal, we believe the disposals should be largely completed before the end of
June. Having said that, the fact that the remaining unrealised investments,
valued at some #1.4 million, (at 12 June 2007) are unsurprisingly made up of
some of the least marketable shares in the portfolio, nothing can be guaranteed.
In the meantime we redeemed the entire #1.1 million of 6% Unsecured Loan Stock
on 29 December last year. In addition, in accordance with Shareholders' wishes,
#12.9 million of cash, in respect of 24.99% of the issued share capital, has
been returned to Shareholders by way of a Tender Offer which closed on 2
February at a price of 240p (before expenses), a discount of approximately 2% to
the then net asset value.
A second Tender Offer circular was posted to Shareholders on 22 May 2007.
Shareholders' approval is sought to repurchase up to a further 24.99% of the
Company's issued share capital. The circular also seeks Shareholders' approval
to the cancellation of the share premium account, which will maximise the
Company's ability to buy back shares, and to amend the Company's articles of
association to extend the time available before winding up from 31 July 2007 to
31 March 2008. This will enable the maximum value to be extracted from the
investment portfolio.
The Company had previously announced that a claim had been received from Newland
Resources Limited ('Newland') in respect of an alleged repudiatory breach of the
Management Services Agreement between them. Newland and the Company have agreed
to settle all claims which either party has against the other under, or arising
out of, the termination of such agreement. Under the terms of the settlement,
the Company has agreed to pay Newland #300,000 on or before 6 June 2007.
James Dawnay
14 June 2007
Income Statement
For the period ended 31 March 2007
Unaudited
Half year ended 31 March 2007
Revenue Capital Total
# # #
Total capital gains from investments - 2,221,389 2,221,389
Income from fixed asset investments 682,938 - 682,938
Other interest receivable 67,313 - 67,313
Gross Revenue and Capital gains 750,251 2,221,389 2,971,640
Management fee - see note 3 - (24,442) (24,442)
Performance fee - see note 3 - - -
Transaction costs - see note 3 - (260,349) (260,349)
Administrative expenses - see note 3 (191,673) - (191,673)
Net gain/(loss) on ordinary activities before
interest payable and taxation 558,578 1,936,598 2,495,176
Interest payable - (29,045) (29,045)
Net gain/(loss) on ordinary activities before 558,578 1,907,553 2,466,131
taxation
Taxation on net gain/(loss) on ordinary activities - - -
Net gain/(loss) on ordinary activities after 558,578 1,907,553 2,466,131
taxation
Transfer to reserves 558,578 1,907,553 2,466,131
Gain/(loss) per ordinary share - Basic - see note 4 2.83p 9.69p 12.52p
Gain/(loss) per ordinary share - Diluted - see note 4 2.83p 9.69p 12.52p
The Total column represents the Company's profit and loss account for the
period. The revenue return and capital return columns are supplementary to this
and are prepared under guidance from the Association of Investment Companies.
All Revenue and Capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
Unaudited Audited
Half year ended 31 March 2006 Year ended 30 September 2006
Revenue Capital Total Revenue Capital Total
# # # # # #
- 20,886,752 20,886,752 - 17,134,581 17,134,581
58,149 - 58,149 156,575 - 156,575
6,866 - 6,866 40,320 - 40,320
65,015 20,886,752 20,951,767 196,895 17,134,581 17,331,476
- (324,464) (324,464) - (723,368) (723,368)
- (2,062,660) (2,062,660) - (2,062,660) (2,062,660)
- (34,381) (34,381) - (19,017) (19,017)
(68,659) - (68,659) (292,802) - (292,802)
(3,644) 18,465,247 18,461,603 (95,907) 14,329,536 14,233,629
- (58,091) (58,091) - (116,181) (116,181)
(3,644) 18,407,156 18,403,512 (95,907) 14,213,355 14,117,448
- - - - - -
(3,644) 18,407,156 18,403,512 (95,907) 14,213,355 14,117,448
(3,644) 18,407,156 18,403,512 (95,907) 14,213,355 14,117,448
(0.02p) 86.42p 86.40p (0.45p) 66.73p 66.28p
(0.02p) 83.48p 83.46p (0.45p) 64.46p 64.01p
Balance Sheet
As at 31 March 2007
Unaudited Unaudited Audited
31 March 31 March 30 September
2007 2006 2006
# # #
Fixed assets
Investments - see note 2 38,473,858 54,042,361 50,307,570
38,473,858 54,042,361 50,307,570
Current assets
Investments held for trading - - 171,397
Debtors 1,088,722 776,032 89,660
Cash at Bank 817,173 1,851,564 358,558
1,905,895 2,627,596 619,615
Creditors : amounts falling due within one year - see note (1,117,646) (3,264,150) (1,241,734)
5
Net current assets/(liabilities) 788,249 (636,554) (622,119)
Total assets less current liabilities 39,262,107 53,405,807 49,685,451
Creditors : amounts falling due after one year
Unsecured Loan Stock - see note 7 - - -
Net assets 39,262,107 53,405,807 49,685,451
Capital and reserves
Called up share capital 798,885 1,065,038 1,065,038
Share premium account 19,326,688 19,326,688 19,326,688
Capital redemption reserve 266,153 - -
Other capital reserves - Realised reserve 19,410,762 3,791,879 8,737,389
- Unrealised reserve (213,372) 30,015,526 21,441,923
Revenue reserve (327,009) (793,324) (885,587)
Shareholders' funds 39,262,107 53,405,807 49,685,451
Net asset value per ordinary share - see note 6 245.73p 250.72p 233.26p
Diluted net asset value per ordinary share - see note 6 245.73p 248.53p 231.66p
Cashflow Statement
For the period ended 31 March 2007
Unaudited Unaudited Audited
Half year ended Half year ended Year ended
31 March 31 March 30 September
2007 2006 2006
# # #
Investment income received 523,768 51,415 85,640
Deposit and other interest received 74,999 7,491 36,382
Investment management fees paid (56,512) (307,686) (727,383)
Performance fees paid - - (2,062,660)
Other cash (payments)/receipts (184,375) 36,143 (164,302)
Net cash outflow from operating activities 357,880 (212,637) (2,832,323)
Interest paid on bank overdraft - - -
Interest paid on Unsecured Loan Stock (16,795) (33,592) (67,185)
Net cash outflow from servicing of finance (16,795) (33,592) (67,185)
Net tax paid - -
Purchases of investments (45,747,937) (8,915,542) (19,025,650)
Sales of investments 60,137,070 8,983,769 20,314,562
Realised currency losses (56,610) (45,287) (105,699)
Net cash inflow from capital expenditure and financial
investment 14,332,523 22,940 1,183,213
Financing
Repayment of Unsecured Loan Stock (1,119,750) - -
Repurchase of Ordinary shares (12,889,475) - -
(14,009,225) - -
Increase/(decrease) in cash 664,383 (223,289) (1,716,295)
Reconciliation of net cash inflow/(outflow) to movement
in net debt
Increase/(decrease) in cash 664,383 (223,289) (1,716,295)
Exchange movements (205,768) - -
Redemption of Unsecured Loan Stock Units 1,119,750 - -
Amortisation of Unsecured Loan Stock issue expenses (12,250) (24,498) (48,996)
Movement in net debt in period 1,566,115 (247,787) (1,765,291)
Net (debt)/cash at beginning of period (748,942) 1,016,349 1,016,349
Net cash/(debt) at 31 March 817,173 768,562 (748,942)
Reconciliation of movements in shareholders funds
For the period ended 31 March 2007
Share Share Capital Capital Capital Retained Total
Capital Premium reserve reserve revenue
redemption (unrealised) # (realised) earnings
reserve # #
# #
# #
At 1 October 2005 1,065,038 19,326,688 - 12,760,088 3,205,869 (789,680) 35,568,003
Profit for the - - - - - (95,907) (95,907)
year
Transfer of - - - 8,681,835 5,531,520 - 14,213,355
Capital profits
Issue of shares - - - - - - -
At 30 September 1,065,038 19,326,688 - 21,441,923 8,737,389 (885,587) 49,685,451
2006
Profit for the - - - - - 558,578 558,578
year
Transfer of - - - (21,655,295) 23,562,848 - 1,907,553
Capital profits
Cancellation of - - - - (12,889,475) - (12,889,475)
shares
Nominal value of
shares cancelled
(266,153) - 266,153 - - - -
At 31 March 2007 798,885 19,326,688 266,153 (213,372) 19,410,762 (327,009) 39,262,107
Notes
1 - Basis of accounting
These accounts have 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 2005
Statement of Recommended Practice "Financial Statements of Investment Companies"
(SORP) and in accordance with accounting policies as set out in the statutory
accounts for the period ended 30 September 2006.
2 - Basis of preparation
Going concern
These financial statements are not prepared on the going concern basis as a
result of the proposed wind up of the Company. The basis of preparation does not
result in any adjustments to the financial statements and the estimated costs of
liquidation have not been accrued for.
These accounts have been prepared using UK accounting standards (UK GAAP) which
have been issued by the Accounting Standards Board to begin the process of
converging UK standards with International Financial Reporting Standards
("IFRS").
All quoted investments held by the Company have been designated as 'fair value
through profit and loss'. For investments actively traded in organised
financial markets, fair value is generally determined by reference to stock
exchange quoted 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. In respect of unquoted investments, or where the market
for a financial instrument is not active, investments are held at Directors'
valuations.
Transaction costs incurred on the purchase or sale of investments are charged
through the Income Statement in the period in which they are incurred.
Previously, transaction costs on acquisition of investments were included in the
investment cost. This has no impact on the net asset value of the Company but
impacts on the unrealised and realised gains and losses on investments.
3 - Management expenses and finance costs
All management fees (including any performance fee) and finance costs are
charged 100% to capital .This reflects the Board's view that any income to be
derived by the Company will be de minimus and that subsequently all returns will
be on the capital account. All other expenses are charged to the revenue account
except expenses incidental to the issue of Unsecured Loan Stock which have been
netted off against the issue proceeds. Such expenses are amortised over the term
of issue of the debt.
On 17 October 2006, as a result of the outcome of the Extraordinary General
Meeting held on 3 October 2006, Newland Resources Limited ("NRL"), the
Management Services Provider, terminated the Management Services Agreement with
the Trust. Consequently, no management or performance fees have been accrued or
paid since that date.
4 - Return or loss per ordinary share
The total return per ordinary share is based on the return attributable to the
ordinary shares of #2,466,131 (2006: #18,403,512) divided by the weighted
average number of ordinary shares in issue for the period 1 October 2006 to 31
March 2007 of 19,692,143 (2006: 21,300,760).
The revenue return per ordinary share is based on the gain attributable to the
ordinary shares of #558,578 (2006: loss #3,644) divided by the weighted average
number of ordinary shares in issue for the period 1 October 2006 to 31 March
2007 of 19,692,143 (2006: 21,300,760).
4 - Return or loss per ordinary share continued
The capital return per ordinary share is based on the return attributable to the
ordinary shares of #1,907,553 (2006: #18,407,156) divided by the weighted
average number of ordinary shares in issue for the period 1 October 2006 to 31
March 2007 of 19,692,143 (2006: 21,300,760).
The share options held by Mr Thygesen lapsed on 21 January 2007. As a result
there is no dilution to the return attributable per ordinary share.
5 - Creditors: amounts falling due within one year
31 March 30 September
2007 2006
# #
Purchases 1,003,064 -
Accruals 114,582 134,234
Unsecured Loan Stock repayable 31.12.2006 - 1,107,500
1,117,646 1,241,734
6 - Net asset value per ordinary share
The net asset value per ordinary share is based on the net assets attributable
to the ordinary shares of #39,262,107 (2006: #53,405,807) divided by 15,977,700
being the number of ordinary shares in issue at 31 March 2007 (2006:
21,300,760).
As detailed in note 4 (above) Mr Thygesen's options lapsed on 21 January 2007.
As a result there is no dilution to the net asset value.
7 Unsecured Loan Stock
The 6% (gross) Unsecured Loan Stock was issued on 6 March 2002 at a par value of
100p. The Loan Stock was redeemed at par on 29 December 2006.
8 Share buy-backs
During the period the Company repurchased for cancellation 5,323,060 ordinary 5p
shares at a cost of #12,889,475 (including expenses) equivalent to 242p per
share. As at 31 March 2007 there were 15,977,700 shares in issue.
In accordance with s170 of the Companies Act 1985 the nominal value of the
ordinary shares repurchased (amounting to #266,153) has been transferred to a
capital redemption reserve.
The Interim Report will be posted to shareholders shortly. Copies may be
obtained during normal business hours from the Company's registered office, The
Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
By order of the Board
Capita Company Secretarial Services Limited
Secretary
14 June 2007
This information is provided by RNS
The company news service from the London Stock Exchange
END
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