TIDMEGL
RNS Number : 0076M
Ecofin Global Utilities Inf Tst PLC
19 May 2022
ECOFIN GLOBAL UTILITIES AND INFRASTRUCTURE TRUST PLC
Interim Financial Results for the six months ended 31 March,
2022
Announcement of Unaudited Results
LEI: 2138005JQTYKU92QOF30
This announcement contains regulated information.
Ecofin Global Utilities and Infrastructure Trust plc (the
"Company") is an authorised UK investment trust whose objectives
are to achieve a high, secure dividend yield on a portfolio
invested primarily in the equities of utility and infrastructure
companies in developed countries and long-term growth in the
capital value of the portfolio while preserving shareholders'
capital in adverse market conditions.
-- During the six months ended 31 March, 2022, the Company's net
asset value ("NAV") per share increased by 13.7% on a total return
basis. The Company's share price increased by 14.1% on a total
return basis over the six months. In the same period, the MSCI
World Index increased by 4.9% (total return in sterling)
-- Two quarterly dividends were paid during the six months
totalling 3.50p per share; the dividend paid in February 2022 was
paid at the increased rate of 1.85p per share (7.4p per share per
annum)
-- The Company is continuing to issue new shares at a premium to
NAV in response to investor demand. During the half-year, GBP1.3
million of shares were issued and another GBP3.6 million of shares
have been issued since the end of March
-- Portfolio companies continue to earn attractive returns on
their growing capital investments, which gives us confidence that
the growth trajectory for earnings and dividends will continue over
the coming years.
Financial Highlights
as at 31 March, 2022
As at or six months
to As at or year to
Summary 31 March 2022 30 September 2021
----------------------------------------- -------------------- -------------------
Net assets attributable to shareholders
(GBP000) 220,937 196,547
Net asset value ("NAV") per share(1) 217.97p 195.11p
----------------------------------------- -------------------- -------------------
Share price (mid-market) 222.00p 198.00p
Discount to NAV(1) 1.9% 1.5%
----------------------------------------- -------------------- -------------------
Revenue return per share 2.24p 5.98p
Dividends paid per share 3.50p 6.60p
Dividend yield(1,2) 3.1% 3.3%
Gearing on net assets(1,3) 13.4% 12.5%
Ongoing charges ratio(1,4) 1.38% 1.43%
----------------------------------------- -------------------- -------------------
1. Please refer to Alternative Performance Measures in the
Interim Report.
2. Dividends paid (annualised) as a percentage of share
price.
3. Gearing is the Company's borrowings (including the net
amounts due from/to brokers) less cash divided by net assets
attributable to shareholders.
4. The ongoing charges figure is calculated in accordance with
guidance issued by the Association of Investment Companies ("AIC")
as the
operating costs (annualised) divided by the average NAV (with
income) throughout the period.
3 years 5 years Since
admission(5) Since admission
Performance for % % %
periods to 31 March
2022 6 months 1 year % per annum
(all total return
in GBP) % % %
--------------------------- ---------- ------- -------- -------- -------------- ----------------
NAV per share(6) 13.7 23.1 59.7 90.4 94.7 12.8
Share price(6) 14.1 26.7 93.5 138.1 151.3 18.2
--------------------------- ---------- ------- -------- -------- -------------- ----------------
Indices(6, 7) :
S&P Global Infrastructure
Index 14.7 21.4 21.8 31.7 40.0 6.3
MSCI World Utilities
Index 15.5 16.4 28.4 48.4 54.9 8.3
MSCI World Index 4.9 16.1 52.5 75.8 97.2 13.1
FTSE All-Share
Index 4.7 13.0 16.8 25.7 35.7 5.7
FTSE ASX Utilities
Index 25.4 37.2 59.7 40.4 36.5 5.8
Source: Bloomberg, Ecofin
5. The Company was incorporated on 27 June, 2016 and its
investment activities began on 13 September, 2016 when the liquid
assets of Ecofin Water & Power Opportunities plc ("EWPO") were
transferred to it. The formal inception date for the measurement of
the Company's performance is 26 September, 2016, the date its
shares were listed on the London Stock Exchange.
6. Total return includes dividends paid and reinvested
immediately. Please also refer to the Alternative Performance
Measures in the Interim Report.
7. The S&P Global Infrastructure Index and MSCI World
Utilities Index are the global sector indices deemed the most
appropriate for performance comparison purposes. The Company does
not have a formal benchmark index. The other indices are provided
for general interest.
Chairman's Statement
Performance
Your Company's net asset value (NAV) performed very well in a
difficult six months for economies, markets and international
relations. Inflation surged as strong economic recoveries collided
with supply-line bottlenecks, bringing accommodative monetary
policies to a belated end and forcing bond yields higher. Russia's
invasion of Ukraine introduced a humanitarian and geo-political
crisis, as well as further sharp increases in commodity and energy
prices.
During the half-year, the total return for NAV per share was
13.7%, including reinvestment of dividends received, and the share
price total return was 14.1%. This substantially exceeded the total
return in sterling terms of the MSCI World Index which was only
4.9% although the equivalent figures for the MSCI World Utilities
Index and the S&P Global Infrastructure Index were 15.5% and
14.7%, respectively. Compared to EGL, the latter two indices have
larger weightings in energy infrastructure and in the US where
returns for utilities were especially strong.
EGL's diversified portfolio includes regulated business models
with inflation pass-throughs, renewables specialists, commodity
price sensitive power generators, and transportation infrastructure
responsive to the lifting of pandemic travel restrictions. These
weathered the volatile backdrop for markets well. The Investment
Manager's report outlines the decisions that contributed to
performance.
Dividends
The Company's net revenue rose substantially in 2021 and the
Board increased the quarterly dividend rate to 1.85p per share
(7.40p per annum) in time for the dividend paid on 28 February,
2022. Our Investment Manager remains confident that investment
income will continue to increase this year which bodes well for
future dividend increases.
Share issuance
The Company is taking every opportunity to issue new shares at a
premium to NAV in response to investor demand. During the
half-year, 625,000 new shares worth GBP1.27 million were issued and
another 1.63 shares have been issued since the end of the period
under review. We want to continue to increase the size of the
Company because we expect this will boost liquidity in the shares,
thereby fostering participation by new investors without diluting
existing ones. It will also reduce cost ratios.
Financing
Citigroup Global Markets Limited, the Company's lender, prime
broker and custodian, has introduced a minimum annual fee for its
services. Citigroup's remuneration is based on short term benchmark
interest rates which were very low for the last few years. The
minimum fee is $200,000 per annum (approximately GBP153,000 per
annum) and became effective on 1 April, 2022.
Outlook
Since 31 March (to 16 May), the Company's NAV has increased by
1.2% and the share price has decreased by 0.7% (both on a total
return basis).
Your Company's focus on utilities in transition and
infrastructure modernisation is working nicely as governments and
businesses move at unprecedented speed to move from fossil fuels to
renewables. The rise in fuel prices will accelerate that trend and
the war in Ukraine makes it imperative to reduce European
dependence on Russian oil and gas, providing a further boost. Much
of the Company's portfolio is invested in companies which use the
energy transition to increase their growth rates, enhance returns,
reduce their volatility of earnings, and improve their
sustainability.
Despite major disruptions to commodity markets and global supply
chains, portfolio companies continue to earn attractive returns on
their growing capital investments, which gives us confidence that
the growth trajectory for earnings and dividends will continue over
the coming years.
David Simpson
Chairman
18 May, 2022
Investment Manager's Report
Markets and performance
The half-year encompassed COP26, with its attendant
carbon-reducing commitments, economic recovery as the harshest
restrictions of the pandemic were lifted, and rising inflation due
to bottlenecks and shortages. Late in the period, Russia's invasion
of Ukraine caused still higher energy prices and fresh uncertainty.
Some Central Banks started to increase interest rates and longer
term bond yields rose to pre-pandemic levels. Global equities were
volatile and approximately flat over the period but dividends and
sterling's 2.5% decline against the US dollar meant that the total
return in sterling for the MSCI World index was 4.9%.
EGL's sectors performed well in this adverse setting with US and
UK utilities the stand-out performers. Rising interest rates
weighed heavily on valuations in the high growth areas of the
market (including clean energy) and in rate-sensitive sectors.
Flattening yield curves reflected concerns that interest rate
increases to restrain high inflation could halt or reduce economic
growth. China's zero-COVID policy, resulting in lockdowns in major
cities, cast a dark shadow over its economic outlook.
The war in Ukraine had a damaging impact on the valuation of
European utilities given doubts about gas flows from Russia
following the unprecedented economic sanctions imposed by EU
countries. The affordability of energy in Europe became a major
political issue, triggering government intervention and uncertainty
in the sector. EDF was a stark example as the French government
capped power price rises for consumers and required EDF to sell
more power to third-party suppliers at well below market rates.
By March, strong reported earnings for portfolio holdings with
inflation indexation and pricing power resulted in a broad-based
recovery in our performance. Investors began to appreciate that the
policy push towards European energy independence would materially
accelerate the already substantial growth opportunity for utilities
to increase renewables capacity.
Power markets, particularly in Europe, were already tight before
Russia's war in Ukraine started. It appears Europe had been
sleep-walking into a risky position; Germany had decided to phase
out nuclear and coal power at an accelerated pace while other
countries reduced fossil fuel generation without a commensurate
increase in renewables. This made Europe highly dependent on
Russian gas. French nuclear plants also faced unscheduled outages
and some hydroelectric plants operated at reduced levels due to
poor hydro resources.
Energy commodity prices have remained high and power prices have
risen 40% in the US and some 10-100% in Europe in the year-to-date.
European carbon prices were rising for most of the half-year and
approached highs of EUR100/ton in early 2022 before settling back
to around EUR80/ton.
Performance summary
The NAV total return was 13.7% over the six months. We are
pleased to keep building the returns since EGL's inception in 2016
which total 94.7% or 12.8% per annum (at 31 March, 2022).
Performance over the six months was driven fairly equally by the
European and North American parts of the portfolio, though the US
segment outperformed since the war started. The small allocation to
emerging markets reduced the NAV slightly. By sub-sector, there was
a similarly positive and even contribution from each of renewables,
regulated utilities, integrated utilities and transportation
infrastructure. These segments showed their value in different
market phases, reinforcing the benefit of the breadth in EGL's
investment universe.
Every North American holding contributed positively to the NAV,
led by Exelon, American Electric Power, NextEra Energy, Williams
Companies and Dominion Energy. The emerging markets allocation,
which we reduced significantly last year, was weak due to the
portfolio's two Chinese renewables stocks. The European part of the
portfolio performed significantly better than the sector index due
to a material exposure to renewables developers and companies
benefitting from higher power prices (Drax, RWE, Acciona Energias,
Greencoat UK Wind).
We also saw traffic and share price rebounds during the
half-year for transportation infrastructure stocks and, more
recently, a recovery for regulated networks (such as Terna and
National Grid) which had underperformed at the start of the
year.
Purchases and sales
The take-overs of Spark Infrastructure and Covanta Holdings,
which were both completed in the fourth quarter of 2021, delivered
substantial cash into the portfolio. By then we had also
significantly reduced the holdings in China Longyuan and China
Suntien Green which became easy targets for profit taking in the
first quarter's rush to 'value'.
During the period, we also sold Eversource and Brookfield
Renewable. This exposure was replaced with new holdings in AES
Corporation, a global leader in renewables development with 83% of
revenues protected by indexation clauses or hedging and a strong
development pipeline, REN (Redes Energeticas Nacionais), the
operator of Portugal's electricity and natural gas infrastructure,
and Ameren. Ameren is a fully regulated electric and gas utility
operating in the Midwest which is accelerating its coal-fired
energy retirements and adding to renewables resources; it has an
infrastructure investment pipeline of over $45 billion for the next
decade. We also increased positions in Greencoat UK Wind, SSE, AEP
and Alliant Energy.
Uniper, the only stock in the portfolio with a substantial
direct exposure to Russia, was divested immediately following the
Russian invasion of Ukraine. Companies with minor exposure to
Russia, such as Enel, RWE and Engie, were retained conditional on
the companies clarifying their limited exposure as well as
committing to any remedial actions.
Other adjustments to the portfolio included adding to Atlas
Arteria, the Australia-based developer and operator of toll roads
in Europe and the US, ENAV, the manager of Italy's air traffic
control services, and to other high conviction European names at
opportunistic prices.
We have retained Exelon and the pure-play nuclear business,
Constellation, which it spun out in January. The fully regulated
transmission and distribution utility business keeps the Exelon
name, while Constellation owns the retail energy and power
generation business, including the US's largest fleet of nuclear
power plants. Both entities have performed well since
disaggregating, highlighting the undervaluation of the previous
structure.
Income and gearing
We saw a rebound in dividend receipts in fiscal 2021 of around
20% due to the resilience in demand for most of the portfolio's
essential services, the economics for renewable energy and a strong
recovery where certain companies had been prevented from paying
dividends the previous year. Over the next few years, we anticipate
that income from investments will return to the more typical 5-7%
annual growth trend, matching the expected long-term growth in
earnings.
Gearing remained within the range of 10-15% of net assets,
having dipped to 10% of NAV by 2021 fiscal year-end. Portfolio
changes led to an increase to 13.4% by the end of March.
Strategy
The war in Ukraine is a major short-term risk for economies but
potentially marks a significant turning point in energy policies
and the energy transition. A search for alternative sources to
diversify natural gas supply will be a focus of attention for years
to come. Although some coal and natural gas fuelled power plants
are having to be run longer than planned in the short run, the
longer term solution will involve alternative gas supplies, energy
efficiencies and significantly more renewables and nuclear in the
generation mix. This should be unambiguously favourable for most of
our portfolio companies as the key enablers of this transition.
Interest rates are rising to combat sharply higher inflation
which should benefit companies in the portfolio through direct
adjustments in regulatory remuneration rates and/or higher
commodity prices. Although utilities are often considered 'bond
proxies' and therefore vulnerable to rising rates in the short
term, rising prices offer considerable inflation protection in the
medium to longer term.
We expect strong revenues for many power companies this year
thanks to the combination of better renewables resources than in
2021 and higher power prices. This should particularly benefit
companies with fixed cost generation assets and higher margins
locked in through forward hedges. Longer term, an acceleration in
renewables development activity as countries and companies work to
improve their security of supply should lead to growth upgrades for
renewables developers both in Europe and North America.
Intervention through price regulation and windfall taxes by
governments trying to mitigate the impact of higher power prices on
consumers is the biggest risk to higher profits at present. In our
view, the share prices of many European integrated utilities
already discount harsh pressure on margins.
Our portfolio is performing relatively well while investors'
risk appetite is diminished, helped by the inflation linkage in the
pricing formulas of the companies. Equity market volatility is
providing us with opportunities to add value but the principal
source of added value will be stock selection for the long term in
this broad and undervalued investment universe.
Ecofin Advisors Limited
Investment Manager
18 May, 2022
Condensed Statement of Comprehensive Income
Six months ended Six months Year ended
ended 30 September 2021
31 March 2022 (unaudited) 31 (audited)
March 2021 (unaudited)
------------------- ----- ------------------------------------------------------------ ----------------------------
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------- ----- --------- --------- ------------------ -------- -------- -------- -------- --------
Gains on
investments
held at
fair value through
profit or loss - 25,233 25,233 - 18,352 18,352 - 28,742 28,742
Currency
(losses)/gains - (281) (281) - 1,202 1,202 - 1,115 1,115
Income 2 3,408 - 3,408 2,838 - 2,838 8,476 1,281 9,757
Investment
management
fee (534) (534) (1,068) (456) (456) (912) (935) (935) (1,870)
Administration
expenses (374) - (374) (368) - (368) (780) - (780)
------------------- ----- --------- --------- ---------- ------ -------- -------- -------- -------- --------
Net return before
finance
costs and taxation 2,500 24,418 26,918 2,014 19,098 21,112 6,761 30,203 36,964
Finance costs (26) (26) (52) (20) (20) (40) (42) (42) (84)
------------------- ----- --------- --------- ---------- ------ -------- -------- -------- -------- --------
Net return before
taxation 2,474 24,392 26,866 1,994 19,078 21,072 6,719 30,161 36,880
Taxation 3 (205) - (205) (215) - (215) (794) - (794)
------------------- ----- --------- --------- ---------- ------ -------- -------- -------- -------- --------
Net return before
taxation 2,269 24,392 26,661 1,779 19,078 20,857 5,925 30,161 36,086
------------------- ----- --------- --------- ---------- ------ -------- -------- -------- -------- --------
Return per ordinary
share (pence) 4 2.24 24.13 26.37 1.82 19.56 21.38 5.98 30.42 36.40
------------------- ----- --------- --------- ---------- ------ -------- -------- -------- -------- --------
The total column of the Condensed Statement of Comprehensive
Income is the profit and loss account of the Company.
The revenue and capital columns are supplementary to this and
are published under guidance from the AIC.
All revenue and capital returns in the above statement derive
from continuing operations. No operations were acquired or
discontinued during the six months ended 31 March, 2022.
The Company has no other comprehensive income and therefore the
net return on ordinary activities after taxation is also the total
comprehensive income for the period.
Condensed Statement of Financial Position
As at As at As at
31 March 2022 31 30 September
March 2021 2021 (audited)
(unaudited) GBP'000
(unaudited)
Notes GBP'000
GBP'000
--------------------------- ------------------------------------------------------------------------ ---------------
Non-current assets
Equity securities 250,226 213,431 220,916
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Investments at fair value
through
profit or loss 250,226 213,431 220,916
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Current assets
Debtors and prepayments 1,132 1,421 1,103
Cash at bank - 2,719 11,251
--------------------------- ----- ------------------------- -------------------------------------- ---------------
1,132 4,140 12,354
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Creditors: amounts falling
due within
one year
Prime brokerage borrowings (29,484) (32,023) (35,873)
Other creditors (937) (1,229) (850)
--------------------------- ----- ------------------------- -------------------------------------- ---------------
(30,421) (33,252) (36,723)
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Net current liabilities (29,289) (29,112) (24,369)
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Net assets 220,937 184,319 196,547
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Share capital and reserves
Called-up share capital 5 1,013 1,005 1,007
Share premium 16,763 15,179 15,500
Special reserve 116,459 116,908 117,730
Capital reserve 6 86,702 51,227 62,310
Revenue reserve - - -
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Total shareholders' funds 220,937 184,319 196,547
--------------------------- ----- ------------------------- -------------------------------------- ---------------
NAV per ordinary share
(pence) 7 217.97 183.31 195.11
--------------------------- ----- ------------------------- -------------------------------------- ---------------
Condensed Statement of Changes in Equity
Six months ended 31 March 2022 (unaudited)
---------------------------------------------------------------------------
Share
premium Special Capital Revenue
Share capital account reserve(1) reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------------------- ----------- ----------- -------- -------- ---------
Balance at 1 October
2021 1,007 15,500 117,730 62,310 - 196,547
Return after taxation - - - 24,392 2,269 26,661
Issue of ordinary shares 6 1,263 - - - 1,269
Dividends paid (see note
8) - - (1,271) - (2,269) (3,540)
-------------------------------------------- ------------------------------------ ----------- ----------- -------- -------- ---------
Balance at 31 March
2022 1,013 16,763 116,459 86,702 - 220,937
--- -------------------------------------------- ------------------------------------ ----------- ----------- -------- -------- ---------
Six months ended 31 March 2021 (unaudited)
---------------------------------------------------------------------------
Share Special
premium reserve Capital Revenue
Share capital account (1) reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------------------------------------------------- ----------- ----------- -------- -------- --------
Balance at 1 October
2020 950 4,956 118,338 32,149 - 156,393
Return after taxation - - - 19,078 1,779 20,857
Issue of ordinary shares 55 10,223 - - - 10,278
Dividends paid (see
note 8) - - (1,430) - (1,779) (3,209)
--------------------------------- --------------------------------------------------- ----------- ----------- -------- -------- --------
Balance at 31 March
2021 1,005 15,179 116,908 51,227 - 184,319
--------------------------------- --------------------------------------------------- ----------- ----------- -------- -------- --------
Year ended 30 September 2021 (audited)
---------------------------------------------------------------------------
Share Special
premium reserve Capital Revenue
Share capital account (1) reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------- --------------------------------------------------- ----------- ----------- -------- -------- --------
Balance at 1 October
2020 950 4,956 118,338 32,149 - 156,393
Return after taxation - - - 30,161 5,925 36,086
Issue of ordinary shares 57 10,544 - - - 10,601
Dividends paid (see
note 8) - - (608) - (5,925) (6,533)
--------------------------------- --------------------------------------------------- ----------- ----------- -------- -------- --------
Balance at 30 September
2021 1,007 15,500 117,730 62,310 - 196,547
--------------------------------- --------------------------------------------------- ----------- ----------- -------- -------- --------
1. The special reserve may be used, where the Board considers it
appropriate, by the Company for the purposes of paying dividends
to
shareholders and, in particular, smoothing payments of dividends
to shareholders.
Condensed Statement of Cash Flows
Six months Six
months Year
ended
ended ended 30
September
31 March 2022 31
March 2021 2021
(unaudited)
(unaudited)
(audited)
GBP'000 GBP'000
GBP'000
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net return before finance costs and taxation 26,918 21,112 36,964
Increase/(decrease) in accrued expenses 87 (64) 85
Overseas withholding tax (315) (94) (753)
Deposit interest income (13) (8) (21)
Dividend income (3,395) (2,830) (8,455)
Realised losses/(gains) on foreign exchange transactions 281 (1,202) (1,115)
Dividends received 3,309 2,682 8,227
Deposit interest received 13 8 21
Interest paid (52) (40) (84)
Gains on investments (25,233) (18,352) (28,742)
(Increase)/decrease in other debtors (5) (15) 2
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
Net cash flow from operating activities 1,595 1,197 6,129
Investing activities
Purchases of investments (39,921) (37,719) (97,893)
Sales of investments 36,181 21,704 84,716
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
Net cash used in investing activities (3,740) (16,015) (13,177)
Financing activities
Movement in prime brokerage borrowings (6,389) 10,468 13,985
Dividends paid (3,540) (3,209) (6,533)
Share issue proceeds 1,104 10,278 10,601
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
Net cash used in financing activities (8,825) 17,537 18,053
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
(Decrease)/increase in cash (10,970) 2,719 11,005
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
Analysis of changes in cash during the year
Opening balance 11,251 - -
Foreign exchange movement (281) - 246
(Decrease)/increase in cash as above (10,970) 2,719 11,005
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
Closing balances - 2,719 11,251
---------------------------------------------------------------------------------------------- ------------------------------ --------------------------------------------
Notes to the Condensed Financial Statements
for the six months ended 31 March, 2022
1. Accounting policies
(a) Basis of preparation
The Condensed Financial Statements have been prepared in
accordance with Financial Reporting Standard ("FRS") 104 Interim
Financial Reporting and with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture
Capital Trusts' issued in April 2021. The Condensed Financial
Statements are prepared in Sterling which is the functional
currency of the Company and rounded to the nearest GBP'000. They
have also been prepared on a going concern basis and approval as an
investment trust has been granted.
The Condensed Financial Statements have been prepared using the
same accounting policies as the preceding Financial Statements
which were prepared in accordance with Financial Reporting Standard
102.
The financial information contained in this Interim Report does
not constitute statutory accounts as defined in Sections 434-436 of
the Companies Act 2006. The financial information for the periods
ended 31 March, 2022 and 31 March, 2021 has not been audited.
The information for the year ended 30 September, 2021 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.
(b) Income
Income from investments, including taxes deducted at source, is
included in revenue by reference to the date on which the
investment is quoted ex-dividend. Special dividends are credited to
capital or revenue, according to the circumstances. The fixed
returns on debt securities are recognised on a time apportionment
basis so as to reflect the effective yield on the debt securities.
Interest receivable from cash and short-term deposits is treated on
an accruals basis.
(c) Expenses
All expenses are accounted for on an accruals basis. Expenses
are charged to the revenue account except where they directly
relate to the acquisition or disposal of an investment, in which
case they are charged to the capital account; in addition, expenses
are charged to the capital account where a connection with the
maintenance or enhancement of the value of the investments can be
demonstrated. In this respect the management fee and overdraft
interest have been allocated 50% to the capital account and 50% to
the revenue account.
(d) Taxation
The charge for taxation is based on the profit for the year to
date and takes into account, if applicable, taxation deferred
because of timing differences between the treatment of certain
items for taxation and accounting purposes. Deferred taxation is
provided using the liability method on all timing differences,
calculated at the rate at which it is anticipated the timing
differences will reverse. Deferred tax assets are recognised only
when, on the basis of available evidence, it is more likely than
not that there will be taxable profits in future against which the
deferred tax asset can be offset.
Due to the Company's status as an investment trust company and
the intention to continue meeting the conditions required to obtain
approval in the foreseeable future, the Company has not provided
deferred tax on any capital gains and losses arising on the
revaluation or disposal of investments.
The tax effect of different items of income/gain and
expenditure/loss is allocated between capital and revenue within
the Condensed Statement of Comprehensive Income on the same basis
as the particular item to which it relates using the Company's
effective rate of tax for the year, based on the marginal
basis.
(e) Valuation of investments
For the purposes of preparing the Condensed Financial
Statements, the Company has applied Sections 11 and 12 of FRS 102
in respect of financial instruments. All investments are measured
initially and subsequently at fair value and transaction costs are
expensed immediately. Investment transactions are accounted for on
a trade date basis. The fair value of the financial instruments in
the Condensed Statement of Financial Position is based on their
quoted bid price at the reporting date, without deduction of the
estimated future selling costs. Changes in the fair value of
investments held at fair value through profit or loss and gains and
losses on disposal are recognised in the Condensed Statement of
Comprehensive Income as "Gains on investments held at fair value
through profit or loss". Also included within this caption are
transaction costs in relation to the purchase or sale of
investments, including the difference between the purchase price of
an investment and its bid price at the date of purchase.
(f) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily
convertible to known amounts of cash and that are subject to
insignificant risk of change in value.
(g) Borrowings
Short-term borrowings, which comprise of prime brokerage
borrowings, are recognised initially at the fair value of the
consideration received, net of any issue expenses, and subsequently
at amortised cost using the effective interest method. The finance
costs, being the difference between the net proceeds of borrowings
and the total amount of payments required to be made in respect of
those borrowings, accrue evenly over the life of the borrowings and
are allocated 50% to revenue and 50% to capital.
(h) Segmental reporting
The Directors are of the opinion that the Company is engaged in
a single segment of business activity, being investment
business.
Consequently, no business segmental analysis is provided.
(i) Nature and purpose of reserves
Share premium account
The balance classified as share premium includes the premium
above nominal value received by the Company on issuing shares
net
of issue costs.
Special reserve
The special reserve arose following court approval in November
2016 to transfer GBP123,609,000 from the share premium account.
This reserve is distributable and may be used, where the Board
considers it appropriate, by the Company for the purposes of paying
dividends to shareholders and, in particular, augmenting or
smoothing payments of dividends to shareholders. There is no
guarantee that the Board will in fact make use of this reserve for
the purpose of the payment of dividends to shareholders. The
special reserve can also be used to fund the cost of share
buy-backs.
Capital reserve
Gains and losses on disposal of investments and changes in fair
values of investments are transferred to the capital account.
Foreign exchange differences of a capital nature are also
transferred to the capital account. The capital element of the
management fee and relevant finance costs are charged to this
account. Any associated tax relief is also credited to this
account.
Revenue reserve
This reserve reflects all income and costs which are recognised
in the revenue column of the Statement of Comprehensive Income.
The Company's special reserve, capital reserve and revenue
reserve may be distributed by way of dividend.
(j) Foreign currency
Monetary assets and liabilities and non-monetary assets held at
fair value in foreign currencies are translated into sterling at
the rates of exchange ruling at the Condensed Statement of
Financial Position date. Transactions involving foreign currencies
are converted at the rate ruling on the date of the transaction.
Gains and losses on the translation of foreign currencies are
recognised in the revenue or capital account of the Condensed
Statement of Comprehensive Income depending on the nature of the
underlying item.
(k) Dividends payable
Dividends are recognised in the period in which they are
paid.
2. Income
Six months
ended Six
months ended
Year ended
31 March 2022
31 March 2021
30 September
2021
GBP'000
GBP'000
GBP'000
---------------------------------------------------------------------------------------------------------------------------------------------------
Income from investments (revenue account)
UK dividends 332 339 1,233
Overseas dividends 2,726 2,309 6,995
Stock dividends 337 182 227
---------------------------------------------------------------------- ---------------- ---------------------------------------------------------
3,395 2,830 8,455
---------------------------------------------------------------------- ---------------- ---------------------------------------------------------
Other income (revenue account)
Deposit interest 13 8 21
---------------------------------------------------------------------- ---------------- ---------------------------------------------------------
Total income 3,408 2,838 8,476
---------------------------------------------------------------------- ---------------- ---------------------------------------------------------
During the six months ended 31 March, 2022, the Company received
no special dividends (31 March, 2021: GBPnil and 30 September,
2021: GBP1,281,000).
3. Taxation
The taxation expense reflected in the Condensed Statement of
Comprehensive Income is based on the estimated annual tax
rate expected for the full financial year. The estimated annual
corporation tax rate used for the year to 30 September, 2022 is 19%
(2021: 19%).
4. Return per ordinary share
Six months Year ended
Six months ended ended 30 September
31 March 2022 31 March 2021 2021
p p p
--------------------------------------- ----------------- --------------- --------------
Revenue return 2.24 1.82 5.98
Capital return 24.13 19.56 30.42
--------------------------------------- ----------------- --------------- --------------
Total return 26.37 21.38 36.40
--------------------------------------- ----------------- --------------- --------------
The returns per share are based
on the following:
Six months Year ended
Six months ended ended 30 September
31 March 2022 31 March 2021 2021
GBP'000 GBP'000 GBP'000
--------------------------------------- ----------------- --------------- --------------
Revenue return 2,269 1,779 5,925
Capital return 24,392 19,078 30,161
--------------------------------------- ----------------- --------------- --------------
Total return 26,661 20,857 36,086
--------------------------------------- ----------------- --------------- --------------
Weighted average number of ordinary
shares in issue 101,121,775 97,538,780 99,135,779
5. Ordinary share capital
31 March 2022 31 March 2021 30 September
2021
------------- ------------------ ------- ------------ -------
Number GBP'000 Number GBP'000 Number GBP'000
----------------------------- ------------- ------------------ ------- ------------ -------
Issued and fully paid
Ordinary shares of 1p each 100,738,423 1,007 95,013,423 950 95,013,423 950
Issue of new ordinary shares 625,000 6 5,535,000 55 5,725,000 57
Ordinary shares of 1p each 101,363,423 1,013 100,548,423 1,005 100,738,423 1,007
----------------------------- ------------- ----- ----------- ------- ------------ -------
The Company was admitted to the Main Market of the London Stock
Exchange on 26 September, 2016. The total number of ordinary shares
in the Company in issue immediately following admission was
91,872,247, each with equal voting rights. During the period, the
Company issued 625,000 (31 March, 2021: 5,535,000 and 30 September,
2021: 5,725,000 ) ordinary shares with net proceeds of GBP1,269,000
(31 March, 2021 GBP10,278,000 and 30 September, 2021:
GBP10,601,000).
Since 31 March, 2022 the Company has issued 1,625,000 ordinary
shares for net proceeds of GBP3,601,000.
6. Capital reserve
31 March 2022
31 March 2021
30 September
2021
GBP'000
GBP'000
GBP'000
----------------------------------------------------------------------------------------------------------------------------------------------------
Opening balance 62,310 32,149 32,149
Movement in investment holding gains 17,051 16,992 16,382
Gains on realisation of investments at
fair value 8,182 1,360 12,360
Special dividend - - 1,281
Currency (losses)/gains (281) 1,202 1,115
Investment management fees (534) (456) (935)
Finance costs (26) (20) (42)
--------------------------------------------------------------- ------------------- --------------------------------------------------------------
86,702 51,227 62,310
--------------------------------------------------------------- ------------------- --------------------------------------------------------------
The capital reserve reflected in the Condensed Statement of
Financial Position at 31 March, 2022 includes gains of
GBP53,328,000 (31 March, 2021: gains of GBP36,886,000 and 30
September, 2021: gain of GBP36,276,000) which relate to the
revaluation of investments held at the reporting date.
7. NAV per ordinary share
As at As at As at
31 March 2022 31 March 30 September
2021 2021
------------------------------ --------------- ------------ --------------
NAV attributable (GBP'000) 220,937 184,319 196,547
Number of ordinary shares in
issue 101,363,423 100,548,423 100,738,423
------------------------------ --------------- ------------ --------------
NAV per share 217.97p 183.31p 195.11p
------------------------------ --------------- ------------ --------------
8. Dividends on ordinary shares
Six months Six months Year ended
ended ended 30 September
31 March 31 March 2021
2022 2021 GBP'000
GBP'000 GBP'000
---------------------------------------- ----------- ----------- --------------
Fourth interim for 2020 of 1.65p (paid
on 30 November, 2020) - 1,576 1576
First interim for 2021 of 1.65p (paid
on 26 February, 2021) - 1,633 1,633
Second interim for 2021 of 1.65p (paid
on 28 May, 2021) - - 1,662
Third interim for 2021 of 1.65p (paid
on 31 August, 2021) - - 1,662
Fourth interim for 2021 of 1.65p (paid 1,666 - -
on 30 November, 2021)
First interim dividend for 2022 of 1,874 - -
1.85p (paid on 28 February, 2022)
---------------------------------------- ----------- ----------- --------------
3,540 3,209 6,533
---------------------------------------- ----------- ----------- --------------
A second interim dividend for 2022 of 1.85p will be paid on 31
May, 2022 to shareholders on the register on 29 April, 2022. The
ex-dividend date was 28 April, 2022.
9. Transaction costs
During the period expenses were incurred in acquiring or
disposing of investments classified as fair value through profit or
loss. These 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 ended Six months Year ended
31 March 2022 ended 30 September
GBP'000 31 March 2021
2021 GBP'000
GBP'000
----------- ----------------- ----------- --------------
Purchases 69 58 152
Sales 13 8 59
----------- ----------------- ----------- --------------
82 66 211
----------- ----------------- ----------- --------------
10. 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 fair value hierarchy
shall have the following levels:
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; and
Level 3: inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
The financial assets and liabilities measured at fair value in
the Condensed Statement of Financial Position are grouped into the
fair value hierarchy at the reporting date as follows:
Level
Level 1 Level 2 3 Total
As at 31 March 2022 Notes GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- --------- --------- --------- ---------
Financial assets at fair
value through profit or loss
Quoted equities a) 246,051 4,175 - 250,226
Total 246,051 4,175 - 250,226
---------------------------------------- --------- --------- --------- ---------
Level 1 Level 2 Level 3 Total
As at 31 March 2021 Notes GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- --------- --------- --------- ---------
Financial assets at fair
value through profit or loss
Quoted equities a) 213,431 - - 213,431
Total 213,431 - - 213,431
---------------------------------------- --------- --------- --------- ---------
Level 1 Level 2 Level 3 Total
As at 30 September 2021 Notes GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------- --------- --------- --------- ---------
Financial assets at fair
value through profit or loss
Quoted equities a) 216,808 4,108 - 220,916
Total 216,808 4,108 - 220,916
---------------------------------------- --------- --------- --------- ---------
a) Equities and preference shares
The fair value of the Company's investments in equities and
preference shares has been determined by reference to their quoted
bid prices at the reporting date. Equities and preference shares
included in Fair Value Level 1 are actively traded on recognised
stock exchanges.
11. Related party transactions and transactions with the
Investment Manager
Fees payable to the Directors and their interests in shares of
the Company are considered to be related party transactions and are
disclosed within the Directors' Remuneration Report on pages 31 and
33 of the 2021 Report and Accounts. The balance of fees due to
Directors at the period end was GBPnil (31 March, 2021: GBPnil and
30 September, 2021: GBPnil).
The Company has an agreement with Ecofin Advisors Limited for
the provision of investment management services.
The management fee was calculated, on a quarterly basis, at
1.00% per annum of the Company's NAV until 31 March, 2021. From 1
April, 2021, the management fee is calculated at 1.00% per annum of
the Company's NAV on the first GBP200 million and 0.75% per annum
of NAV thereafter, payable quarterly in arrears. The management fee
is chargeable 50% to revenue and 50% to capital.
During the period GBP1,068,000 (31 March, 2021: GBP912,000 and
30 September, 2021: GBP1,870,000) of investment management fees
were earned by the Manager, with a balance of GBP539,000 (31 March
2021: GBP461,000 and 30 September, 2021: GBP491,000) being payable
to Ecofin Advisors Limited at the period end.
12. Analysis of changes in net debt
As at Currency As at
30 September Differences Cash flows 31 March
2021 2022
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ------------ ----------- ------------------------------------
Cash and short term deposits 11,251 (281) (10,970) -
Debt due within one year (35,873) - 6,389 (29,484)
----------------------------- ------------ ----------- ----------------- -----------------
(24,622) (281) (4,581) (29,484)
----------------------------- ------------ ----------- ----------------- -----------------
As at Currency As at
30 September 2020 differences 31 March
GBP'000 GBP'000 Cash flows 2021
GBP'000 GBP'000
-------------------- ------------------ ------------ ---------- ---------
Cash and short term
deposits - - 2,719 2,719
Debt due within one
year (22,757) 1,202 (10,468) (32,023)
-------------------- ------------------ ------------ ---------- ---------
(22,757) 1,202 (7,749) (29,304)
-------------------- ------------------ ------------ ---------- ---------
A statement reconciling the movement in net funds to the net
cash flow has not been presented as there are no differences from
the above analysis.
Interim Management Report
The principal and emerging risks and uncertainties that could
have a material impact on the Company's performance have not
changed from those set out on pages 18 to 20 of the Company's
Annual Report for the year ended 30 September, 2021.
The Directors consider that the Chairman's Statement and the
Investment Manager's Report set out herein, the above disclosure on
related party transactions and the Directors' Responsibility
Statement below, together constitute the Interim Management Report
of the Company for the six months ended 31 March, 2022 and satisfy
the requirements of Disclosure Guidance and Transparency Rules
4.2.3 to 4.2.11 of the Financial Conduct Authority.
The Interim Report has not been reviewed or audited by the
Company's Auditor.
Directors' Responsibility Statement
The Directors listed in the Interim Report confirm that to the
best of their knowledge:
(i) the condensed set of Financial Statements has been prepared
in accordance with FRS 104 (Interim Financial Reporting) and
give
a true and fair review of the assets, liabilities, financial
position and profit and loss of the Company as required by
Disclosure Guidance and Transparency Rule 4.2.4 R;
(ii) the Interim Management Report includes a fair review, as
required by Disclosure Guidance and Transparency Rule 4.2.7 R, of
important events that occurred during the six months ended 31
March, 2022 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
(iii) the Interim Management Report includes a fair review of
the information concerning related party transactions as required
by Disclosure Guidance and Transparency Rule 4.2.8 R.
This Interim Report was approved by the Board on 18 May, 2022
and the Directors' Responsibility Statement was signed on its
behalf by:
David Simpson
Chairman
18 May, 2022
Interim Report 2022
The Interim Report will be available on the Investment Manager's
website www.ecofininvest.com/eg l . A copy of the Interim Report
for the six months ended 31 March, 2022 will be submitted to the
National Storage Mechanism of the FCA and will shortly be available
for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism . The
financial information for the period ending 31 March, 2022
comprises non-statutory accounts within the meaning of Sections 434
- 436 of the Companies Act 2006.
For further information, please contact:
Faith Pengelly
For and on behalf of
Maitland Administration Services Limited
Company Secretary
Tel: 01245 950 317
18 MAY, 2022
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BLGDUIGBDGDI
(END) Dow Jones Newswires
May 19, 2022 02:00 ET (06:00 GMT)
Ecofin Global Utilities ... (LSE:EGL)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Ecofin Global Utilities ... (LSE:EGL)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
