TIDMFUS
RNS Number : 7839X
F&C UK Select Trust PLC
21 August 2009
To: RNS
From:F&C UK Select Trust plc
Date:21 August 2009
Interim Results for the six months to 30 June 2009
* Net asset value total return of 9.2 per cent over the six months to 30 June 2009
* FTSE All-Share Index total return of 0.8 per cent over the six months to 30 June
2009
* Share price total return of 10.7 per cent over the six months to 30 June 2009
* Revaluation of Caithness Petroleum adds 8.7 per cent to net asset value total
return in July 2009
The Chairman, Mr Geoffrey Maddrell, said:
Investment Performance
You may recall that in my last Statement I informed you that the Company had
underperformed its benchmark FTSE All-Share Index total return by 12.5
percentage points during 2008. I am pleased to be able to report to you that
during the first half of 2009 the Company out performed the benchmark by 8.4
percentage points, delivering total return of 9.2 per cent compared with the
benchmark's 0.8 per cent.
The modest progress of the market belied six months of turbulence, with a sharp
market fall of almost 20 per cent more than reversed by a 25 per cent rally
during the months that followed.
A justified belief that the bad economic news of the last quarter of 2008 would
be succeeded by worse in the first quarter of 2009 saw our out performance
concentrated in the first part of the year. The Manager subsequently increased
gearing and positioned the portfolio to run with the market rally which followed
the March lows. We gave back a little ground as the half year wore on in
consequence of a degree of caution as to the rally's quality and duration.
Resources and financials have generated the strongest returns for the Company,
with Rio Tinto, Indus Gas and Standard Chartered worthy of special mention.
Caithness Petroleum
The Company's largest investment as at 30 June 2009 was Caithness Petroleum
("Caithness"). This is an oil and gas production company which we bought in July
2007 in anticipation of its listing on the London Stock Exchange; market
conditions prevented this and Caithness remains unquoted.
Recent drilling results from one of Caithness's fields suggest that it may have
discovered large and exploitable gas reserves. On the back of these results,
Caithness announced, on 28 July 2009, a substantial fund raising of at least
US$50 million at a sterling equivalent price of GBP34.48 per share. Accordingly,
the Board increased the carrying value of the Company's investment in Caithness
from GBP15.04 to GBP34.48 per share, or from GBP2.2 million to GBP5.0 million in
aggregate, an increase of almost 130 per cent. This added 5.6p to the net asset
value per Ordinary Share, or 8.7 per cent, to the Company's net asset value,
taking the net asset value to 69.4p per Ordinary Share as at the date of the
revaluation (28 July 2009).
Caithness intends to conduct further test drilling around the potential
discovery before the end of the year, and has stated a commitment to seek a
listing within 12 months of the recent fund raising. The Board and the Manager
believe that Caithness continues to represent an exciting opportunity that could
add materially to the Company's net asset value. They do not believe that
Caithness's potential is fully reflected in the price at which the fund raising
was carried out, and the fact that Caithness is unquoted means that a market
price does not exist.
Having regard to the potential for a further material enhancement to Shareholder
value by retaining a significant investment in Caithness, the Directors have
concluded that rigidly enforcing the Company's normal rebalancing discipline
would not be in the best interests of Shareholders as a whole. Therefore, the
Board proposes to sell GBP2.0 million of the Caithness position, leaving a
GBP3.0 million position. The Board expects this sale to complete in the next two
weeks. The GBP2.0 million realised will almost cover the original cost of the
investment and, the Board believes, represents the right balance between risk
and reward. However, retaining a position in the size proposed represents a
material change in the Company's published investment policy and Shareholder
approval is being sought for this change at a General Meeting to be held in
September.
Shareholder Value and Earnings
The Board is committed to proposing a reconstruction of the Company involving an
entitlement for shareholders to elect for a full cash exit at close to net asset
value if the net asset value total return per share over the two calendar years
2008 and 2009 does not exceed that of the FTSE All-Share Index. The increase in
net asset value as a result of the events at Caithness discussed above means
that the Company's net asset value total return is currently some 4 per cent
behind that of the FTSE All-Share Index. Given the improved performance of the
Company's investment portfolio in 2009, coupled with the material enhancement to
net asset value from the revaluation of Caithness, the Board concluded that it
was appropriate to prepare these interim accounts on a going concern basis.
The Company bought back 1,385,000 shares for cancellation during the half year
(2008 - 4,305,000). This added 0.1 pence to the Company's net asset value.
The average discount at which the Company's shares traded during the six months
to 30 June 2009 was 7.3 per cent, and earnings per share were 0.56 pence. As is
usual, no interim dividend is proposed at this stage.
Outlook
The market has more than recovered the losses of early 2009 and continues to
make progress, although there are now some signs of reluctance on the part of
investors to continue supporting a stream of capital raisings; this could dampen
enthusiasm.
The evidence suggests that economic conditions are no longer deteriorating at
the same rate, but that is far from saying that they are about to materially
improve.
We believe that a degree of caution remains appropriate, with the bad debt
provisions that the banks will require a particular source of concern. A
balanced portfolio with an emphasis on defensive and cyclical stocks with strong
balance sheets leaves us well positioned, we believe, to take advantage of the
opportunities that will present themselves during the second half of the year.
G K Maddrell
Chairman
For further information contact:
Phil Doel F&C Asset Management plc, tel. 0207 628 8000
Martin Cassels F&C Asset Management plc, tel. 0207 628 8000
Income Statement (Unaudited)
+-------------------------------------------+--------+------------+-----------+-----------+
| | | Six Months to 30 June 2009 |
+-------------------------------------------+--------+------------------------------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | Revenue | Capital | Total |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Gains on investments | | - | 2,392 | 2,392 |
+-------------------------------------------+--------+------------+-----------+-----------+
| Income | | 529 | - | 529 |
+-------------------------------------------+--------+------------+-----------+-----------+
| Investment management fee - basic | | (30) | (90) | (120) |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | - | (204) | (204) |
| - performance | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Other expenses | | (192) | - | (192) |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
| | | --------- | --------- | --------- |
+-------------------------------------------+--------+------------+-----------+-----------+
| Net return before finance costs and | | 307 | 2,098 | 2,405 |
| taxation | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Finance costs: | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| * Term loan interest | | (20) | (58) | (78) |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
| | | --------- | --------- | --------- |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Return on ordinary activities before tax | | 287 | 2,040 | 2,327 |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
| | | --------- | --------- | --------- |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Tax on ordinary activities | | - | - | - |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | --------- |
| | | --------- | --------- | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Return attributable to ordinary | | 287 | 2,040 | 2,327 |
| shareholders | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | --------- | --------- |
| | | --------- | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| | | | | |
+-------------------------------------------+--------+------------+-----------+-----------+
| Return per ordinary share: | | 0.56p | 4.02p | 4.58p |
+-------------------------------------------+--------+------------+-----------+-----------+
Income Statement (Unaudited)
+--------------------------------------------+---+------------+----------+-----------+
| | | Six months to 30 June 2008 |
| | | |
+--------------------------------------------+---+-----------------------------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+---+------------+----------+-----------+
| | | Revenue | Capital | Total |
+--------------------------------------------+---+------------+----------+-----------+
| | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| Losses on investments | | - | (10,977) | (10,977) |
+--------------------------------------------+---+------------+----------+-----------+
| Income | | 1,497 | - | 1,497 |
+--------------------------------------------+---+------------+----------+-----------+
| Investment management fee | | (51) | (153) | (204) |
+--------------------------------------------+---+------------+----------+-----------+
| Other expenses | | (161) | - | (161) |
+--------------------------------------------+---+------------+----------+-----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+---+------------+----------+-----------+
| Net return before finance costs and | | 1,285 | (11,130) | (9,845) |
| taxation | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| Finance costs: | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| * Term loan interest | | (55) | (164) | (219) |
+--------------------------------------------+---+------------+----------+-----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+---+------------+----------+-----------+
| Return on ordinary activities before tax | | 1,230 | (11,294) | (10,064) |
+--------------------------------------------+---+------------+----------+-----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+---+------------+----------+-----------+
| Tax on ordinary activities | | - | - | - |
+--------------------------------------------+---+------------+----------+-----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+---+------------+----------+-----------+
| | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| Return attributable to shareholders | | 1,230 | (11,294) | (10,064) |
+--------------------------------------------+---+------------+----------+-----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+---+------------+----------+-----------+
| | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| | | | | |
+--------------------------------------------+---+------------+----------+-----------+
| Return per ordinary share: | | 2.13p | (19.60)p | (17.47)p |
+--------------------------------------------+---+------------+----------+-----------+
Income Statement (Audited)
+--------------------------------------------+-------+----------+----------+----------+
| | | Year to 31 December 2008 |
| | | |
+--------------------------------------------+-------+--------------------------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+-------+----------+----------+----------+
| | | Revenue | Capital | Total |
+--------------------------------------------+-------+----------+----------+----------+
| | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| Losses on investments | | - | (27,114) | (27,114) |
+--------------------------------------------+-------+----------+----------+----------+
| Income | | 2,289 | - | 2,289 |
+--------------------------------------------+-------+----------+----------+----------+
| Investment management fee | | 117 | 117 | 234 |
+--------------------------------------------+-------+----------+----------+----------+
| Other expenses | | (354) | - | (354) |
+--------------------------------------------+-------+----------+----------+----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+-------+----------+----------+----------+
| Net return before finance costs and | | 2,052 | (26,977) | (24,945) |
| taxation | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| Finance costs: | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| * Term loan interest | | (82) | (245) | (327) |
+--------------------------------------------+-------+----------+----------+----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+-------+----------+----------+----------+
| Return on ordinary activities before tax | | 1,970 | (27,242) | (25,272) |
+--------------------------------------------+-------+----------+----------+----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+-------+----------+----------+----------+
| Tax on ordinary activities | | - | - | - |
+--------------------------------------------+-------+----------+----------+----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+-------+----------+----------+----------+
| | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| Return attributable to shareholders | | 1,970 | (27,242) | (25,272) |
+--------------------------------------------+-------+----------+----------+----------+
| | | ------ | ------ | ------ |
+--------------------------------------------+-------+----------+----------+----------+
| | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| | | | | |
+--------------------------------------------+-------+----------+----------+----------+
| Return per ordinary share: | | 3.54p | (48.97)p | (45.43)p |
+--------------------------------------------+-------+----------+----------+----------+
| | | | | |
+--------------------------------------------+-------+----------+----------+----------+
Balance Sheet (Unaudited)
+--------------------------------------------+-----+-----------+------------+-----------+
| | | As at | As at | As at |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | 30/6/09 | 30/6/08 | 31/12/08 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | (audited) |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Fixed Assets | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Investments | | 33,485 | 48,709 | 29,465 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Current assets | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Debtors | | 207 | 2,607 | 1,419 |
+--------------------------------------------+-----+-----------+------------+-----------+
| Cash at bank and on deposit | | 492 | 3,046 | 2,281 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | ------- | ------- | ------ |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | 699 | 5,653 | 3,700 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Creditors: amounts falling due within one | | (3,367) | (5,350) | (3,470) |
| year | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | --------- | --------- | ------ |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Net current (liabilities)/assets | | (2,668) | 303 | 230 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | --------- | --------- | ------ |
+--------------------------------------------+-----+-----------+------------+-----------+
| Total assets less current liabilities | | 30,817 | 49,012 | 29,695 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | --------- | ---------- | ------ |
+--------------------------------------------+-----+-----------+------------+-----------+
| Net assets | | 30,817 | 49,012 | 29,695 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | --------- | --------- | -------- |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Capital and reserves | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Called-up share capital | | 532 | 615 | 546 |
+--------------------------------------------+-----+-----------+------------+-----------+
| Special reserve | | 32,061 | 35,457 | 32,763 |
+--------------------------------------------+-----+-----------+------------+-----------+
| Capital reserve | | (10,017) | 3,890 | (12,058) |
+--------------------------------------------+-----+-----------+------------+-----------+
| Capital redemption reserve | | 247 | 164 | 233 |
+--------------------------------------------+-----+-----------+------------+-----------+
| Revenue reserve | | 7,994 | 8,886 | 8,211 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | --------- | --------- | ------ |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Shareholders' funds | | 30,817 | 49,012 | 29,695 |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | --------- | --------- | -------- |
+--------------------------------------------+-----+-----------+------------+-----------+
| | | | | |
+--------------------------------------------+-----+-----------+------------+-----------+
| Net asset value per ordinary share | | 61.4p | 88.1p | 57.6p |
+--------------------------------------------+-----+-----------+------------+-----------+
Unaudited Reconciliation of Movements in Shareholders' Funds
+-------------------------------------------+--------------+--------------+--------------+
| | Six months | Six months | Year to |
| | to | to | |
+-------------------------------------------+--------------+--------------+--------------+
| | 30 June | 30 June | 31 December |
+-------------------------------------------+--------------+--------------+--------------+
| | 2009 | 2008 | 2008 |
+-------------------------------------------+--------------+--------------+--------------+
| | | | (audited) |
+-------------------------------------------+--------------+--------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------------+--------------+--------------+--------------+
| | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Opening shareholders' funds | 29,695 | 63,168 | 63,168 |
+-------------------------------------------+--------------+--------------+--------------+
| Return attributable to ordinary | 2,327 | (10,064) | (25,272) |
| shareholders | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Dividends paid | (503) | (173) | (1,588) |
+-------------------------------------------+--------------+--------------+--------------+
| Ordinary shares bought back for | (702) | (3,919) | (6,613) |
| cancellation | | | |
+-------------------------------------------+--------------+--------------+--------------+
| | | | |
+-------------------------------------------+--------------+--------------+--------------+
| Closing shareholders' funds | 30,817 | 49,012 | 29,695 |
+-------------------------------------------+--------------+--------------+--------------+
| | | | |
+-------------------------------------------+--------------+--------------+--------------+
Summarised Unaudited Statement of Cash Flows
+-------------------------------------------+----------------+--------------+-------------+
| | Six months to | Six months | Year to |
| | | to | |
+-------------------------------------------+----------------+--------------+-------------+
| | 30 June | 30 June | 31 December |
+-------------------------------------------+----------------+--------------+-------------+
| | 2009 | 2008 | 2008 |
+-------------------------------------------+----------------+--------------+-------------+
| | | | (audited) |
+-------------------------------------------+----------------+--------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Net cash flow from operating activities | 302 | 844 | 1,818 |
+-------------------------------------------+----------------+--------------+-------------+
| Servicing of finance | (36) | (220) | (302) |
+-------------------------------------------+----------------+--------------+-------------+
| Capital expenditure and financial | (850) | 7,816 | 9,967 |
| investments | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Dividends paid | (503) | (173) | (1,588) |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Net cash flow before financing | (1,087) | 8,267 | 9,895 |
+-------------------------------------------+----------------+--------------+-------------+
| Financing | (702) | (7,919) | (10,312) |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| (Decrease)/increase in cash | (1,789) | 348 | (417) |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Reconciliation of net cash flow to movement in net debt | | |
+------------------------------------------------------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| (Decrease)/increase in cash | (1,789) | 348 | (417) |
+-------------------------------------------+----------------+--------------+-------------+
| Loan repaid | - | 4,000 | 4,000 |
+-------------------------------------------+----------------+--------------+-------------+
| Opening net debt | (719) | (4,302) | (4,302) |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Closing net (debt)/cash | (2,508) | 46 | (719) |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Reconciliation of net return before | Six months to | Six months | Year to |
| finance costs | | to | |
+-------------------------------------------+----------------+--------------+-------------+
| and taxation to net cash flow flow from | 30 June | 30 June | 31 December |
| operating | | | |
+-------------------------------------------+----------------+--------------+-------------+
| activities | 2009 | 2008 | 2008 |
+-------------------------------------------+----------------+--------------+-------------+
| | | | (audited) |
+-------------------------------------------+----------------+--------------+-------------+
| | GBP'000 | GBP,000 | GBP'000 |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Net return before finance costs and | 2,405 | (9,845) | (24,945) |
| taxation | | | |
+-------------------------------------------+----------------+--------------+-------------+
| (Gains)/losses on investments | (2,392) | 10,977 | 27,114 |
+-------------------------------------------+----------------+--------------+-------------+
| Changes in working capital and other | 289 | (288) | (351) |
| non-cash items | | | |
+-------------------------------------------+----------------+--------------+-------------+
| | | | |
+-------------------------------------------+----------------+--------------+-------------+
| Net cash flow from operating activities | 302 | 844 | 1,818 |
+-------------------------------------------+----------------+--------------+-------------+
Principal Risks and Uncertainties
The Company's assets consist mainly of listed securities and its principal risks
are therefore market related. Other risks faced by the Company include external,
investment and strategic, regulatory, operational, and financial risks. These
risks, and the way in which they are managed, are described in more detail under
the heading Principal Risks and Risk Management within the Business Review in
the Company's Annual Report for the year ended 31 December 2008. The Company's
principal risks and uncertainties have not changed materially since the date of
that report and are not expected to change for the remaining six months of the
Company's financial year.
Statement of Directors' Responsibilities in Respect of the Interim Results
We confirm that to the best of our knowledge:
* the condensed financial statements have been prepared in accordance with the
Statement 'Half-Yearly Financial Reports' issued by the UK Accounting Standards
Board and give a true and fair view of the assets, liabilities, financial
position and return of the Company;
* the Chairman's Statement (constituting the Interim Management Report) includes a
fair review of the information required by the Disclosure and Transparency Rules
("DTR") 4.2.7R, being an indication of important events that have occurred
during the first six months of the financial year and their impact on the
financial statements;
* the Statement of Principal Risks and Uncertainties shown above is a fair review
of the information required by DTR 4.2.7R; and
* the condensed financial statements include a fair review of the information
required by DTR 4.2.8R, being related party transactions that have taken place
in the first six months of the financial year and that have materially affected
the financial position or performance of the Company during the period, and any
changes in the related party transactions described in the last Annual Report
that could do so.
On behalf of the Board
G K Maddrell
Director
21 August 2009
Notes
1.The unaudited interim results have been prepared on the basis of the
accounting policies set out in the statutory accounts of the Company for the
year ended 31 December 2008.
The annual financial statements of the Company are prepared in accordance with
United Kingdom Generally Accepted Accounting Practice. The condensed set of
financial statements included in this half-yearly financial report has been
prepared in accordance with the Accounting Standard Board Statement "Half-Yearly
Financial Reports".
The Company continues to adopt the going concern basis in the preparation of the
interim financial statements, although there is a material uncertainty that the
Directors have had to consider in preparing the interim report on the basis as
described below.
The Company's longer term performance will be measured over the two calendar
years 2008 and 2009 (which coincide with the Company's financial years) and if,
over the two year period the net asset value total return Ordinary Share
outperforms the total return on the FTSE All-Share Index, the Company will
continue as an investment trust at that point. In that event, the Directors
intend that a further resolution will be proposed to approve the continuation of
the Company as an investment trust at the Annual General Meeting of the Company
to be held in 2013 and at every subsequent Annual General Meeting following the
passing of such a resolution.
If the net asset value total return per Ordinary Share does not outperform the
total return on the FTSE All-share Index between 1 January 2008 and 31 December
2009, the Board will propose a reconstruction of the Company involving an
entitlement for Shareholders to elect for a full cash exit at close to net asset
value, such proposal to be put to Shareholders at a general meeting of the
Company to be held on or before 30 April 2010.
The Company's net asset value total return for the period from 1 January 2008 to
20 August 2009, the date that this interim report was approved, was
approximately 4 percentage points less than that of the FTSE All-Share Index for
the same period. The Directors recognise that the Company may not outperform the
index over the two year period from 1 January 2008 to 31 December 2009, and that
it may be necessary to propose the Company's reconstruction on or before 30
April 2010. Having considered the above, the Directors believe that it is
appropriate to prepare the accounts on the going concern basis.
2. Earnings for the first six months should not be taken as a guide to the
results for the full year.
3. As a result of the European Court of Justice decision that investment
management fees payable by investment trusts are not, and never should have
been, liable to value added tax ('VAT'), the Company recovered VAT of GBP580,000
during the year ended 31 December 2008.
The amount is recognised in the Income Statement for the period and
allocated between revenue and capital in the same ratios as the VAT originally
suffered.
+----------------+----------+---------+---------+----------+---------+---------+----------+---------+---------+
| | Six months ended | Six months ended | Year ended 31 December |
| | 30 June 2009 | 30 June 2008 | 2008 |
+----------------+------------------------------+------------------------------+------------------------------+
| | Revenue | Capital | Total | Revenue | Capital | Total | Revenue | Capital | Total |
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+----------------+----------+---------+---------+----------+---------+---------+----------+---------+---------+
| - basic fee | 30 | 90 | 120 | 51 | 153 | 204 | 87 | 259 | 346 |
+----------------+----------+---------+---------+----------+---------+---------+----------+---------+---------+
| - VAT | - | - | - | - | - | - | (204) | (376) | (580) |
| recoverable | | | | | | | | | |
+----------------+----------+---------+---------+----------+---------+---------+----------+---------+---------+
| - performance | - | 204 | 204 | - | - | - | - | - | - |
| fee | | | | | | | | | |
+----------------+----------+---------+---------+----------+---------+---------+----------+---------+---------+
| | 30 | 294 | 324 | 51 | 153 | 204 | (117) | (117) | (234) |
+----------------+----------+---------+---------+----------+---------+---------+----------+---------+---------+
An outperformance fee of GBP204,000 has been accrued as at 30 June 2009 (31
December 2008 and 30 June 2008: GBPNil)
4.Revenue return per Ordinary share is based on a weighted average of
50,768,422 Ordinary Shares in issue (31 December 2008: 55,629,811, 30 June
2008: 57,610,071) and GBP287,000 (31 December 2008: GBP1,970,000, 30 June 2008:
GBP1,230,000) being net revenue on ordinary activities after taxation.
5. During the six months ended 30 June 2009 the Company bought 1,385,000
Ordinary Shares for cancellation at a cost of GBP702,000 (six months ended 30
June 2008 - 4,305,000 Ordinary shares for cancellation at a cost of GBP3,919,000
and year ended 31 December 2008 - 8,365,000 Ordinary Shares for cancellation at
a cost of GBP6,613,000).
6. The net asset value per share is 61.4p (31 December 2008: 57.6p; 30 June
2008: 88.1p) and is based on net assets of GBP30,817,000 (31 December 2008:
GBP29,695,000; 30 June 2008: GBP49,012,000) and on 50,209,961 (31 December 2008:
51,594,961: 30 June 2008: 55,654,961) Ordinary Shares being the number of
Ordinary shares in issue excluding shares held in Treasury.
7. These are not statutory accounts in terms of Section 434 of the Companies
Act 2006. The full audited accounts for the year to 31 December 2008, which
received an unqualified audit report, have been lodged with the Registrar of
Companies. No statutory accounts in respect of any period after 31 December 2008
have been reported on by the Company's auditors or delivered to the Registrar of
Companies. The Interim Report will be available at the Company's website
address, www.fcukselecttrust.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZGGZRKGLGLZM
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