TIDMAUKT
RNS Number : 8810F
Aberdeen UK Tracker Trust plc
01 August 2016
ABERDEEN UK TRACKER trust plc
Unaudited Half-Yearly Financial Report for the Six months ended
30 June 2016
HALF-YEARLY BOARD REPORT
Half-Year Performance and Investment Activity
The Company's capital net asset value per share (excluding
revenue reserves) rose by 2.1% over the 6 months ended 30 June 2016
in line with the rise in the Company's benchmark, the FTSE
All-Share Index (the "Index"). On a total return basis, with
dividends deemed to have been reinvested, the Company's net asset
value per share rose by 4.2% over the 6 months compared with a 4.3%
rise in the Index.
The possibility that the UK might leave the European Union
("EU") (or 'Brexit' as it became known in the media) was the
most-talked-about topic over recent months. When the referendum on
23 June 2016 ("EU Referendum") resulted in a vote in favour of an
exit from the EU, investors were surprised by the decision and
market volatility ensued. Share prices of UK companies fell sharply
with the Index losing 7% of its value in two days and sterling
suffered relatively steep declines against a basket of
international currencies. Nevertheless, a degree of stability
returned to the markets in the final days of June and, since the
appointment of the new prime minister, recovery has been marked
with the Index up 12.9% at the time of writing from the low reached
on 27 June 2016.
Throughout the half-year, notwithstanding the vote for Brexit,
marked volatility has been observed with the Index falling some
11.5% between 31 December 2015 and 11 February 2016 only for all of
this decrease to be recouped by the referendum date as markets
anticipated a pro-'Remain' result.
At the sector level, the strongest performers included oil &
gas, a beneficiary of the improvement in the oil price, and basic
materials. In contrast, consumer services and financials lagged
behind.
Dividends
The Directors have declared an interim dividend of 6.5p per
share (2015 - 6.4p) for the year ending 31 December 2016. The
interim dividend will be payable on 26 August 2016 to shareholders
on the register on 12 August 2016 with an ex-dividend date of 11
August 2016.
It remains the Board's intention to pay out each year the total
income generated by the investment portfolio, less operating
expenses. However, the interim dividend, which reflects the greater
part of the Company's total net income having been received in the
first half of the financial year, is likely to be higher than the
final dividend which is due to be declared in March 2017.
Share Price Discount
The Board continues to monitor closely the level of discount at
which the Company's shares trade. The Company's share price fell
2.8% during the period to 30 June 2016 to 295.0p which represented
a discount of 9.2% to the net asset value per share (including
revenue reserves) of 324.9p. At the start of the period the share
price was trading at a discount to the net asset value (including
revenue reserves) of 4.1%. The wider discount was partly the
market's response to a perceived stock overhang as a shareholder
looked to scale back their closed end investments but also
reflected the initial market turmoil which followed the EU
referendum. Discounts were wider across the investment company
sector in the week before the period end as investors sought to
de-risk their UK assets due to a combination of uncertainty
surrounding the economic impact of a UK exit, talk of lower
interest rates and the possibility of increased quantitative
easing.
The Company seeks to manage the volatility of the discount
through its policy of buying back its own shares. During the period
the Company bought back 563,450 shares for treasury, at a cost of
GBP1.6 million, resulting in the issued share capital comprising
100,428,518 Ordinary shares with voting rights and an additional
2,627,597 shares being held in treasury as at 30 June 2016.
A further 853,749 shares were bought back for treasury between 1
July 2016 and the date of approval of this Report and therefore the
issued share capital comprises 99,574,769 Ordinary shares with
voting rights and an additional 3,481,346 shares held in treasury
at this date. It is pleasing to report that since the half-year end
the discount has narrowed to 6.6% at the time of writing.
Annual General Meeting
At the Company's Annual General Meeting ("AGM") on 28 April
2016, all resolutions were passed by shareholders. A final dividend
per share of 4.70p was paid to shareholders on 3 May 2016 (2015 -
4.50p). Your Board was encouraged by the continued support of
shareholders as expressed by the vote for continuation of the
Company at the AGM; of the shareholders who voted, over 99% voted
in favour.
Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Company are
set out in detail on pages 8 to 9 of the Annual Report for the year
ended 31 December 2015 and have not changed during the period nor
are they expected to change in the second half of the financial
year ended 31 December 2016.
They can be summarised under the following headings:
- Shareholder concentration;
- Performance;
- Discount volatility;
- Investment strategy and objectives;
- Financial and regulatory; and
- Operational.
The impact on the risks of the Company following the 'Leave'
decision of the EU Referendum is difficult to assess at this stage.
A more informed assessment can and will be made when the terms of
the UK's exit are known.
Going Concern
In accordance with the Financial Reporting Council's Guidance on
Risk Management, Internal Control and Related Financial and
Business Reporting issued in September 2014, the Directors have
undertaken a rigorous review and consider both that there are no
material uncertainties and that the adoption of the going concern
basis of accounting is appropriate when preparing the Company's
half-yearly financial statements for the 6 months ended 30 June
2016.
The Company's assets consist entirely of equity shares in
companies listed on the London Stock Exchange which are, in most
circumstances, realisable within a short timescale. The Company has
no borrowing facilities.
The Directors' assessment of going concern is also based on the
assumption that the Ordinary Resolution to be proposed at the AGM
of the Company in April 2017, that the Company continues as an
investment trust, is passed by shareholders.
The Directors are mindful of the Company's principal risks and
uncertainties and have reviewed forecasts detailing revenue and
liabilities, and they believe that the Company has adequate
financial resources to continue in operational existence for the
foreseeable future and at least 12 months from the date of approval
of this Half-Yearly Report.
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 30
June 2016 comprises the Half-Yearly Board Report, the Directors'
Responsibility Statement and a condensed set of Financial
Statements.
For and on behalf of the Board
Kevin Ingram
Chairman
1 August 2016
Financial Highlights
6 months Year ended
ended
30/06/2016 31/12/2015 % Change
Net asset value per
Ordinary share {A} 317.3p 310.9p +2.1
Net asset value per
Ordinary share {B} 324.9p 316.6p +2.6
Share price of Ordinary
share (mid) 295.0p 303.5p -2.8
Discount to net asset
value {C} 9.2% 4.1%
Interim dividend 6.50p 6.40p {D}
{A} Excluding revenue reserves.
{B} Including revenue reserves.
{C} Based on net asset value including revenue
reserves.
{D} For the six months ended 30 June 2015.
Performance
6 month 1 year 3 year 5 year
return return return{+} return{+}
% % % %
Capital return
Net asset value* +2.1 -1.6 +2.1 +2.5
FTSE All-Share Index +2.1 -1.5 +2.2 +2.6
Share price -2.8 -6.7 +0.8 +2.2
Total return (Capital return
plus dividends reinvested)
Net asset value +4.2 +1.9 +5.5 +5.9
FTSE All-Share Index +4.3 +2.2 +5.9 +6.3
Share price -1.2 -3.2 +4.3 +5.7
* Excluding revenue reserves
{+} Annualised
Source: AAM PLC, Morningstar
and Lipper
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Six months ended Six months ended
30 June 2016 30 June 2015
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on investments - 6,336 6,336 - 3,189 3,189
Currency gains/(losses) - 4 4 - (5) (5)
Income (note 2) 7,055 - 7,055 7,024 - 7,024
Investment management
fee (199) - (199) (229) - (229)
Administrative expenses (269) - (269) (266) - (266)
_______ _______ _______ _______ _______ _______
Net return on ordinary
activities before
taxation 6,587 6,340 12,927 6,529 3,184 9,713
Taxation (22) - (22) (42) - (42)
_______ _______ _______ _______ _______ _______
Net return on ordinary
activities after
taxation 6,565 6,340 12,905 6,487 3,184 9,671
_______ _______ _______ _______ _______ _______
Return per Ordinary
share (pence) (note
4) 6.52 6.30 12.82 6.40 3.14 9.54
_______ _______ _______ _______ _______ _______
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.
CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
As at As at
30 June 31 December
2016 2015
Notes GBP'000 GBP'000
Fixed assets
Investments at fair value
through profit or loss 319,601 314,048
__________ __________
Current assets
Debtors and prepayments 1,713 879
Money market funds 4,020 4,345
Cash and short term deposits 1,110 675
__________ __________
6,843 5,899
__________ __________
Creditors: amounts falling
due within one year (191) (238)
__________ __________
Net current assets 6,652 5,661
__________ __________
Net assets 326,253 319,709
__________ __________
Capital and reserves
Called-up share capital 10,306 10,306
Capital redemption reserve 1,398 1,398
Special reserve 212,514 214,151
Capital reserve 6 94,421 88,081
Revenue reserve 7,614 5,773
__________ __________
Equity shareholders' funds 326,253 319,709
__________ __________
Net asset value per share
(pence) 7 324.86 316.57
__________ __________
Net asset value per share
(excluding revenue reserves)
(pence) 317.28 310.85
__________ __________
CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Six months ended
30 June 2016
Capital
Share redemption Special Capital Revenue
capital reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
December 2015 10,306 1,398 214,151 88,081 5,773 319,709
Return on ordinary
activities after
taxation - - - 6,340 6,565 12,905
Dividend paid 3 - - - - (4,724) (4,724)
Purchase of own
shares to be held
in treasury 8 - - (1,637) - - (1,637)
______ ______ ______ _______ ______ ______
Balance at 30
June 2016 10,306 1,398 212,514 94,421 7,614 326,253
______ ______ ______ _______ ______ ______
Six months ended
30 June 2015
Capital
Share redemption Special Capital Revenue
capital reserve reserve reserve reserve Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
December 2014 10,306 1,398 215,807 96,608 5,570 329,689
Return on ordinary
activities after
taxation - - - 3,184 6,487 9,671
Dividend paid 3 - - - - (4,568) (4,568)
Purchase of own
shares to be held
in treasury 8 - - (1,549) - - (1,549)
______ ______ ______ _______ ______ ______
Balance at 30
June 2015 10,306 1,398 214,258 99,792 7,489 333,243
______ ______ ______ _______ ______ ______
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)
Six months Six months
ended ended
30 June 2016 30 June 2015
Notes GBP'000 GBP'000
Operating activities
Net return on ordinary
activities before finance
costs and taxation 12,927 9,713
Adjustments for:
Gains on investments (6,336) (3,189)
Currency (gains)/losses (4) 5
Increase in dividend income (150) (146)
Increase in interest income - (3)
Stock dividends included
in dividend income (633) (561)
Increase in other debtors (72) (11)
Decrease in other creditors (47) (149)
Net overseas tax paid (3) (68)
__________ __________
Net cash inflow from operating
activities 5,682 5,591
Investing activities
Purchases of investments (7,888) (4,945)
Sales of investments 8,673 6,251
__________ __________
Net cash flow from investing
activities 785 1,306
__________ __________
Financing activities
Buy back of Ordinary shares 8 (1,637) (1,114)
Equity dividends paid 3 (4,724) (4,568)
__________ __________
Net cash used in financing
activities (6,361) (5,682)
__________ __________
Increase in cash and cash
equivalents 106 1,215
__________ __________
Analysis of changes in
cash and cash equivalents
during the period
Opening balance 5,020 4,781
Increase in cash as above 106 1,215
Currency gains/(losses) 4 (5)
__________ __________
Closing balance 5,130 5,991
__________ __________
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policies
(a) Basis of preparation
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.
The half-yearly financial statements have been
prepared using the same accounting policies
applied as the preceding annual accounts. The
Company has early adopted Amendments to FRS
102 - Fair Value Hierarchy Disclosures, issued
by the Financial Reporting Council in March
2016.
Six months Six months
ended ended
30 June 30 June
2016 2015
2. Income GBP'000 GBP'000
Income from investments
UK listed - franked 5,819 5,573
UK listed - unfranked and
overseas income 589 877
Stock dividends 633 561
__________ __________
7,041 7,011
__________ __________
Other income
Interest from money market
funds 13 13
Deposit interest 1 -
__________ __________
14 13
__________ __________
Total income 7,055 7,024
__________ __________
Six months Six months
ended ended
30 June 30 June
2016 2015
3. Dividends GBP'000 GBP'000
Final dividend for 2015 -
4.70p (2014 - 4.50p) 4,724 4,568
__________ __________
A final dividend of 4.70p for the year ended
31 December 2015 (2014 - 4.50p) was paid to shareholders
on 3 May 2016.
An interim dividend of 6.50p (2015 - 6.40p) for
the year ending 31 December 2016 will be paid
on 26 August 2016 to shareholders on the register
at 12 August 2016. The ex-dividend date is 11
August 2016.
Six months Six months
ended ended
30 June 30 June
2016 2015
4. Return per Ordinary share p p
Revenue return 6.52 6.40
Capital return 6.30 3.14
__________ __________
Total return 12.82 9.54
__________ __________
The figures above are based on the
following attributable returns:
GBP'000 GBP'000
Revenue return 6,565 6,487
Capital return 6,340 3,184
__________ __________
Total return 12,905 9,671
__________ __________
Weighted average number of
Ordinary shares in issue 100,648,986 101,394,705
__________ __________
5. Transaction costs
During the six months ended 30 June 2016, the
direct expenses incurred in acquiring or disposing
of investments (classified as fair value through
profit or loss) have been expensed through capital
and are included within gains/(losses) on investments
in the Condensed Statement of Comprehensive Income.
The total costs were as follows:
Six months Six months
ended ended
30 June 30 June
2016 2015
GBP'000 GBP'000
Purchases 34 21
Sales 2 1
__________ __________
36 22
__________ __________
Six months Six months
ended ended
30 June 30 June
2016 2015
6. Capital reserve GBP'000 GBP'000
Opening balance 99,792 96,608
Increase in investment holding
fair value gains 3,876 1,232
Gains on realisation of investments
at fair value 2,460 1,957
Currency gains/(losses) 4 (5)
__________ __________
Closing balance 106,132 99,792
__________ __________
The capital reserve reflected in the Condensed
Statement of Financial Position at 30 June 2016
includes gains amounting to GBP74,032,000 (31
December 2015 - gains of GBP70,156,000) which
relate to the revaluation of investments held
at the reporting date compared to historical
cost.
As at As at
7. Net asset value per Ordinary 30 June 31 December
share 2016 2015
Net assets attributable GBP326,253,000 GBP319,709,000
Number of Ordinary shares
in issue (excluding shares
in issue held in treasury) 100,428,518 100,991,968
Net asset value per Ordinary
share 324.86p 316.57p
8. Called-up share capital
During the period ended 30 June 2016, 563,450
(30 June 2015 - 478,000) Ordinary shares of 10p
each were bought back at a total cost of GBP1,637,000
(30 June 2015 - GBP1,549,000) including expenses,
all of which were placed in treasury. Treasury
shares, which are non-voting, held by the Company
may be reissued at a premium to net asset value
per share for the benefit of all shareholders.
As at 30 June 2016, the Company's issued share
capital consisted of 100,428,518 (31 December
2015 - 100,991,968) Ordinary shares of 10p each,
with voting rights and 2,627,597 (31 December
2015 - 2,064,147) Ordinary shares of 10p each
held in treasury which represented 2.5% (31 December
2015 - 2.0%) of the Company's total issued share
capital.
As at the date of approval of this Report, the
Company's issued share capital consisted of 99,574,769
Ordinary shares of 10p each, with voting rights
and 3,481,346 Ordinary shares of 10p each held
in treasury.
9. 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 company has early
adopted Amendments to FRS 102 - Fair value hierarchy
disclosures issued by the Financial Reporting
Council in March 2016. The fair value hierarchy
shall have the following classifications:
Level 1: Unadjusted quoted prices in an active
market for identical assets or liabilities that
the entity can access at the measurement date.
Level 2: inputs other than quoted prices included
within level 1 that are observable (i.e., developed
using market data) for the asset or liability,
either directly or indirectly.
Level 3: inputs are unobservable (i.e., for which
market data is unavailable) for the asset or
liability.
The Company's investments consist of quoted equities
and quoted futures contracts (31 December 2015
- same) all of which are actively traded on recognised
stock exchanges, with their fair value being
determined by reference to their quoted bid prices
at the reporting date. The total value of the
investments as at the period end of GBP319,601,000
(31 December 2015 - GBP314,048,000) have therefore
been deemed as Level 1.
10. Segmental information
The company is engaged in a single segment of
business, which is to invest in equity securities.
All of the Company's activities are interrelated,
and each activity is dependent on the others.
Accordingly, all significant operating decisions
are based on the Company as one segment.
11. Transactions with the Manager
The Company has agreements with Aberdeen Fund
Managers Limited ("AFML" or the "Manager") for
the provision of investment management, secretarial,
accounting and administration and promotional
services.
The management fee is charged to the Company
on the basis of 0.09% per annum of the total
assets of the Company, after deducting current
liabilities and excluding the value of any investments
managed by AAM, in excess of GBP100m and a fee
of 0.20% per annum of the total assets of the
Company, after deducting current liabilities
and excluding the value of any investments managed
by AAM, is charged on assets under GBP100m. The
Board and Manager have agreed that the minimum
annual fee payable to the Manager shall be GBP300,000.
During the period GBP199,000 (2015 - GBP229,000)
was paid to the Manager in respect of management
fees and the balance due to AFML at the period
end was GBP101,000 (2015 - GBP108,000). The fee
is wholly chargeable to revenue. The total value
of Aberdeen-managed investment trusts within
the portfolio at the period end was GBP641,000
(2015 - GBP629,000).
The management agreement between the Company
and AFML is terminable by either party on three
months' notice. In the event of termination on
less than the agreed notice period, compensation
is payable in lieu of the unexpired notice period.
During the period GBP68,000 (2015 - GBP71,000)
was paid to the Manager in respect of promotional
activities for the Company through its Investment
Trust Initiative and the balance prepaid at the
period end was GBP35,000 (2015 - due - GBP105,000).
12. Related party disclosures
There were no related party transactions during
the period.
13. Half-Yearly Financial Report
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 financial information
for the six months ended 30 June 2016 and 30
June 2015 has not been audited.
The information for the year ended 31 December
2015 has been extracted from the latest published
audited financial statements which have been
filed with the Registrar of Companies. The report
of the auditor on those accounts contained no
qualification or statement under Section 498
of the Companies Act 2006.
14. This Half-Yearly Financial Report was approved
by the Board on 1 August 2016.
For Aberdeen UK Tracker Trust plc
Aberdeen Asset Management PLC, SECRETARY
Please note that past performance is not necessarily a guide to
the future and that the value of investments and the income from
them may fall as well as rise. Investors may not get back the
amount they originally invested.
* Neither the Company's website nor the content of any website
accessible from hyperlinks on it (or any other website) is (or is
deemed to be) incorporated into, or forms (or is deemed to form)
part of this announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSWFLFFMSEEA
(END) Dow Jones Newswires
August 01, 2016 10:31 ET (14:31 GMT)
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