RNS Number:3776U
Edinburgh UK Small Co Track Tst PLC
18 November 2005
EDINBURGH UK SMALLER COMPANIES TRACKER TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
for the six months to 30 September 2005
Chairman's Statement
The Board of Edinburgh UK Smaller Companies Tracker Trust Plc (the "Company") is
pleased to present its interim report for the six months to 30 September 2005.
Performance
The capital net asset value per share (excluding all revenue) increased from
240.97 pence on 1 April 2005 to 254.47 pence on 30 September 2005, a rise of
5.6%. This compares with an increase of 5.5% in the FTSE All-Small Index
(excluding investment companies), on a capital gains basis, for the same period.
During the period under review smaller companies lagged their larger
counterparts with the first two months showing negative returns. June through to
September has shown four solid months of positive performance. The middle market
share price per ordinary share increased from 225.5 pence on 1 April 2005 to
244.0 pence on 30 September 2005, an increase of 8.2%.
The share price discount to total net asset value has narrowed from 6.6% on 1
April to 5.4% at the period end.
Tender Offer
On 28 September 2005 the Company announced details of a Tender Offer which would
provide an opportunity for shareholders to realise up to 20%, and possibly more,
of their investment in the Company.
The special resolution required to approve the tender offer was passed at the
EGM on 27 October 2005 when the Company further announced that tenders in
respect of 34,164,347 shares were received from qualifying shareholders. In
accordance with the terms of the tender offer a total of 10,825,825 shares, or
20% of the shares in issue, were bought back at a tender price of 235.25329
pence per share. This represented a discount of 3.9% (2004 tender offer discount
- 5.6%) to the formula asset value calculation as at the close of business on 27
October 2005 which was confirmed by our auditors.
Of this discount, fixed tender costs represented 0.8%, stamp duty on the buy
back of tender shares 0.5% with the balance relating to trading costs incurred
in liquidating the tender pool of exit shares and market movements.
Following completion of the tender offer 43,303,394 shares remain in issue.
Dividends
In order to facilitate the tender offer process and so that all shareholders
could participate in the revenue generated by the portfolio in the financial
year to date, on 28 September 2005 the Board declared an interim dividend of
1.75 pence per share on the Ordinary shares of 25p in the Company (2004 - 1.75
pence). This dividend was paid on 21 October 2005 to those Shareholders who were
registered at the close of business on 7 October 2005.
Change of Benchmark Index
A resolution was passed at the Company EGM on 27 October 2005 approving a change
in the Company's benchmark index to the FTSE Small Cap Index (excluding
investment companies). The manager has re-aligned the portfolio to reflect this
change at a cost of 0.3% of continuing net assets. The Company no longer has any
holdings in FTSE Fledgling stocks, being those listed companies that qualify for
inclusion in an index but are too small to be included in the FTSE All-Share.
The Board believes that the new benchmark index is more widely accepted, being a
constituent block of the FTSE All-Share, and should help improve the
marketability of the Company's shares.
Share Buy Backs and Treasury Shares
No shares have been bought back by the Company during the six months under
review. However, since the share buyback programme commenced in February 2000 a
total of 16,792,537 Ordinary shares (excluding tender shares) have been bought
in, representing 19.9% of the original share capital, at a weighted average
discount of 16.9%. The Board believes it is appropriate to continue its
commitment to a sensible ongoing share buy back policy to attempt to limit
discount volatility and with the aim of establishing a long-term level of
discount below 6%. To this end, a resolution was proposed and passed at the
Company EGM in October 2005 to renew the authority to buy back shares up to a
maximum of 14.99% of the Company's issued share capital (post the tender offer).
Any shares purchased in this way will either be cancelled or may be held in
treasury (up to a limit of 10% of the current shares in issue). The Board
together with the manager continues to monitor the situation with regard to
share buy backs reflecting their desire to enhance liquidity and value for
shareholders whenever possible.
The EGM also allowed shareholders the opportunity to vote and approve the buy
back of shares to be held in treasury for future cancellation or re-issue. The
Board together with the manager will consider the re-issue of shares from
treasury as the need arises and may issue such shares at a small discount to net
asset value to provide liquidity to the market.
Michael Cumming
Chairman
18 November 2005
Statement of Total Return (unaudited)
Six months ended Six months ended
30 September 2005 30 September 2004
(restated)
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Gains/(losses) on investments - 7,534 7,534 - (4,806) (4,806)
Income 1,831 - 1,831 2,250 - 2,250
Investment management fee (incl. VAT) (313) - (313) (337) - (337)
Other expenses (263) - (263) (227) - (227)
_______ _______ ______ _______ _______ _______
Return on ordinary activities before and 1,255 7,534 8,789 1,686 (4,806) (3,120)
after taxation
_______ _______ ______ _______ _______ _______
Return per share (pence) 16.24 (4.59)
______ ______
The total column of this statement represents the revenue account of the
Company.
The financial statements have been restated to reflect the change to accounting
policies as set out in the accompanying notes.
All items in the above statement derive form continuing operations
Balance Sheet
As at As at As at
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (audited)
(restated) (restated)
#'000 #'000 #'000
Fixed assets
Investments 137,150 141,697 129,701
_________ _________ _________
Current assets
Debtors and prepayments 377 1,188 802
Cash at bank and in hand 1,836 335 2,093
_________ _________ _________
2,213 1,523 2,895
_________ _________ _________
Creditors: amounts falling due within one year (144) (112) (948)
_________ _________ _________
Net current assets 2,069 1,411 1,947
_________ _________ _________
Net assets 139,219 143,108 131,648
_________ _________ _________
Share capital and reserves
Called-up share capital 13,532 16,915 13,532
Special reserve 83,546 83,546 83,546
Other capital reserves:
Capital reserve - unrealised (7,785) (31,838) (11,817)
Capital reserve - realised 40,870 69,593 37,368
Capital redemption reserve 7,581 4,198 7,581
Revenue reserve 1,475 694 1,438
_________ _________ _________
Shareholders' funds 139,219 143,108 131,648
_________ _________ _________
Net asset value per share (pence) 257.20 211.51 243.21
_________ _________ _________
Statement of Changes in Equity (unaudited)
Six months ended 30 September 2005
Capital Capital Capital
Share Special reserve reserve redemption Revenue
capital reserve - unrealised - realised reserve reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 31 March 2005 (restated) 13,532 83,546 (11,817) 37,368 7,581 1,438 131,648
Return on ordinary activities after - - 4,032 3,502 - 1,255 8,789
taxation
Dividends paid - - - - - (1,218) (1,218)
Balance at 30 September 2005 13,532 83,546 (7,785) 40,870 7,581 1,475 139,219
Six months ended 30 September 2004
Capital Capital Capital
Share Special reserve reserve redemption Revenue
capital reserve - unrealised - realised reserve reserve Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Balance at 31 March 2004 (restated) 17,295 83,546 (25,404) 70,909 3,818 1,551 151,715
Return on ordinary activities after - - (6,434) 1,628 - 1,686 (3,120)
taxation
Dividends paid - - - - - (2,543) (2,543)
Purchase of own shares for (380) - - (2,944) 380 - (2,944)
cancellation
Balance at 30 September 2004 16,915 83,546 (31,838) 69,593 4,198 694 143,108
Cash Flow Statement (unaudited)
Six months ended Six months ended
30 September 2005 30 September 2004
#'000 #'000
Net cash inflow from operating activities 1,219 1,691
Net cash (outflow)/inflow from financial investment (258) 2,139
Equity dividends paid (1,218) (2,543)
__________ __________
Net cash (outflow)/inflow before financing (257) 1,287
Net cash outflow from financing - (2,975)
__________ __________
Decrease in cash (257) (1,688)
__________ __________
Reconciliation of operating revenue to net cash inflow
from operating activities
Net revenue before finance costs and taxation 1,255 1,686
Decrease in accrued income 20 62
Increase in other debtors (13) (12)
Decrease in other creditors (43) (45)
__________ __________
Net cash inflow from operating activities 1,219 1,691
__________ __________
Reconciliation of net cash flow to movements in net funds
Decrease in cash as above (257) (1,688)
Exchange movements - 3
__________ __________
Movement in net funds in the period (257) (1,685)
Opening net funds at 1 April 2,093 2,020
__________ __________
Net funds at 30 September 1,836 335
__________ __________
Represented by:
Cash at bank and in hand 1,836 335
__________ __________
Notes
1. Accounting Policies
The accounts have been prepared under the historical cost convention, as
modified to include the revaluation of investments and in accordance with
applicable Accounting Standards and with the Statement of Recommended Practice
for "Financial Statements of Investment Trust Companies".
For the accounting period beginning on 1 April 2005 the Company had the
option to prepare its financial statements in accordance with International
Financial Reporting Standards ('IFRS'), as adopted by the International
Accounting Standards Board ('IASB'). The Board has elected to continue to adopt
UK Generally Accepted Accounting Principles ('UK GAAP') and therefore with the
new Financial Reporting Standards issued as part of the programme to converge UK
GAAP with IFRS. Figures for the six months ended 30 September 2004 and year
ended 31 March 2005 have been restated accordingly.
The same accounting policies used for the year ended 31 March 2005 have
been applied with the following exceptions:
(a) Investments are measured initially at cost and are recognised at
trade date. For financial assets acquired, the cost is the fair value of the
consideration, with changes in fair value going to the profit and loss account.
Subsequent to initial recognition investments are valued at fair value. For
listed investments this is assumed to be bid market prices.
(b) Under FRS 21 "Events after the Balance Sheet Date", dividends
should only be accrued in the accounts if they are a liability at the Balance
Sheet date. No provision has been made in the financial statements for the
interim dividend for the period ended 30 September 2005. The financial
statements for the year ended 31 March 2005 and 2004 have been restated to
remove the final dividends that were accrued at those dates.
The impact of these changes is shown below.
As at As at As at
31 March 2005 30 September 2004 31 March 2004
#'000 #'000 #'000
2. Reconciliation of Balance Sheets (audited) (unaudited) (audited)
Net assets as previously reported 130,654 143,397 150,657
Restatement of investments at bid value (224) (289) (326)
Reversal of provision of final dividend 1,218 - 1,384
__________ __________ __________
Restated net assets 131,648 143,108 151,715
__________ __________ __________
Six months ended
30 September 2004
3. Reconciliation of the Statement of Total Return #'000
Total transfer from reserves per original (4,316)
reported Statement of Total Return
Less: prior period dividend adjustment (now (25)
shown in Statement of Changes in Equity)
Add: 2004 interim dividend on Ordinary shares 1,184
(now shown in Statement of Changes in Equity)
Change from mid to bid basis 30 September 2004 (289)
Change from mid to bid basis 31 March 2004 326
__________
Restated total transfer from reserves (3,120)
__________
Ordinary dividends on equity shares deducted from reserves are analysed below:
Six months ended Six months ended
30 September 2005 30 September 2004
#'000 #'000
Ordinary Dividends on equity shares:
2004 final dividend paid - 2.00p - 1,359
2004/05 interim dividend paid - 1.75p - 1,184
2005 final dividend paid - 2.25p 1,218 -
__________ __________
1,218 2,543
__________ __________
Six months ended Six months ended
30 September 2005 30 September 2004
(restated)
4. Return per share p p
Revenue return 2.32 2.48
Capital return 13.92 (7.07)
__________ __________
16.24 (4.59)
__________ __________
The figures above are based on the following attributable assets:
Six months ended Six months ended
30 September 2005 30 September 2004
(restated)
#'000 #'000
Revenue return 1,255 1,686
Capital return 7,534 (4,806)
__________ __________
8,789 (3,120)
__________ __________
Weighted average number of Ordinary shares in 54,129,219 67,941,778
issue
__________ __________
5. The Board has declared an interim dividend in respect of the year ending 31 March 2006 of 1.75p per share
(2004 - interim dividend of 1.75p per share). The dividend had a record date of 7 October 2005 and was paid on
21 October 2005 to Ordinary Shareholders on the register at the record date. The ex-dividend date was 5 October
2005.
As at As at As at
30 September 2005 30 September 2004 31 March
2005
6. Net asset value per share (restated) (restated)
Attributable net assets (#'000) 139,219 143,108 131,648
Number of Ordinary shares in issue 54,129,219 67,661,477 54,129,219
Ordinary share (p) 257.20 211.51 243.21
Six months ended Six months ended
30 September 2005 30 September 2004
7. Transaction costs #'000 #'000
The following transaction costs were incurred
during the period:
Purchases 160 86
Sales 38 23
__________ __________
198 109
__________ __________
8. There were no Ordinary shares bought back for cancellation in the six month
period ending 30 September 2005.
9. The financial information for the six months ended 30 September 2005 and 30
September 2004 comprises non-statutory accounts within the meaning of Section
240 of the Companies Act 1985. The financial information for the year ended 31
March 2005 has been extracted from published accounts that have been delivered
to the Registrar of Companies and on which the report of the auditors was
unqualified. The interim accounts have been prepared on the same basis as the
annual accounts, with the exception of the disclosures in note 1 above.
Aberdeen Asset Management PLC
Secretaries
18 November 2005
Independent Review Report to the Members of Edinburgh UK Smaller Companies
Tracker Trust PLC
Introduction
We have been instructed by the Company to review the financial information for
the six months ended 30 September 2005 which comprises the Consolidated Income
Statement, Consolidated Statement of Changes in Equity, Consolidated Balance
Sheet, Consolidated Cash Flow Statement and the related notes. We have read the
other information contained in the Interim Report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the Company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our work,
for this report, or for the conclusions we have formed.
Directors 'responsibilities
The Interim Report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the Interim Report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of interim financial information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of management and applying analytical procedures to the financial information
and underlying financial data, and based thereon, assessing whether the
accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2005.
Ernst &Young LLP
London
18 November 2005
This information is provided by RNS
The company news service from the London Stock Exchange
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