Interim Results
23 Agosto 2006 - 4:48AM
UK Regulatory
Proof 2
LIFE OFFICES OPPORTUNITIES TRUST PLC
Unaudited results for the six months to 30 June 2006
The investment objective of Life Offices Opportunities Trust Plc ("LOOT") is to
achieve long term capital growth from a diversified portfolio of with-profits
life assurance policies. The Trust, with net assets of �31.1 million, is
managed by SVM Asset Management ("SVM"), the independent Edinburgh based
investment boutique.
Salient Points
* Net asset value per share increased by 6.1% to 131.8p during the period
under review.
* Investment returns have been strong over the last year and the 2006 bonus
season has mostly seen bonus rates raised.
* Standard Life was the major exception which, despite median performance of
around 16%, reduced policyholder funds and again cut bonus payments.
However, LOOT was allocated 442,860 free shares following Standard Life's
listing and this adds just over �1 million to the asset value (3.25% of net
assets).
* The median projected maturity asset value at the end of the Fund's life is
156.4 pence per share. Using the current share price, this equates to a
yield to maturity in excess of 8% per annum.
For further information please contact:
Colin McLean SVM Asset Management Limited 0131 226 6699
Roland Cross Broadgate 020 7726 6111
LIFE OFFICES OPPORTUNITIES TRUST PLC
CHAIRMAN'S STATEMENT
For the six months to 30 June 2006
Commenting on the results for the six months to 30 June 2006, Chairman, John
Brumwell, said:
"I am pleased to report the first half of 2006 has seen your Company's assets
again make progress. Over the six month period, the net asset value per share
increased 6.1 per cent to 131.8p. The investment objective of your Company is
to achieve long term capital growth and no dividend is payable. As intimated
previously, no further policies have been bought and policies continued to
mature as expected. This has resulted in the overall fund gearing being reduced
from over 46% down to 42% as at the end of June. The pace of maturities is
forecast to speed up from now until the projected end of the Fund's life in
2008.
Following a year of strong investment returns, headed by a return of 20% by
Prudential on their with-profit fund, the 2006 bonus declaration season
generally proved to be favourable, with bonus rates mostly being raised.
Typically, the major with-profit life office funds produced returns of around
16%, which, after taxation and some reserving held back for smoothing in an
above trend year, equates to a net return to policyholders of some 13%.
Occasionally, there were some reductions in bonus rates but this appeared to be
largely down to the interactions between accrued annual bonuses and asset
shares.
The major exception among the larger life offices was Standard Life which,
despite also turning in median performance of around 16%, actually reduced
policyholder funds and again cut bonus payments. The suspicion was that this
was a precursor to listing in which policyholders' funds were effectively
`transferred' to a shareholders' pool. It appears as if policyholders were
bolstering shareholders funds.
However against this disappointment, the Company was allocated 442,860 free
shares in the recently listed Standard Life plc. As the listing took place
after the end of June and the final pricing was not agreed until early July,
these shares have not been included within these interim results. At the
listing price of 230 pence, this adds slightly in excess of �1 million to the
asset value. This equates to 4.3 pence per share or 3.25% of net assets. The
listing price was at the lower end of expectations and appears to have been
priced to go. Therefore, it was not surprising to see the share price advance
in the first weeks after flotation.
Over recent years, the Company has published projected terminal maturity values
on a quarterly basis. The median projected terminal asset value based on 30
June 2006 numbers is 156.4 pence per share based on the previously indicated
assumptions. Using the current share price, this equates to a yield to maturity
in excess of 8% per annum. As bonuses are generally seen as having bottomed and
with-profits funds are generating positive returns, we believe that the Company
is well placed to achieve this level at maturity."
John Brumwell
Chairman
Life Offices Opportunities Trust plc
Summarised Statement of Total Return (unaudited)
6 months to 30 June 2006 6 months to 30 June 2005
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains on sale of - 514 514 - 393 393
investments
Movement in unrealised - 2,097 2,097 - 1,332 1,332
appreciation
-------- -------- -------- -------- -------- --------
Gains on investments - 2,611 2,611 - 1,725 1,725
Income - - - 1 - 1
Investment management - (179) (179) - (170) (170)
fees
Other expenses (45) (97) (142) (54) (110) (164)
-------- -------- -------- -------- -------- --------
Return before interest (45) 2,335 2,290 (53) 1,445 1,392
and taxation
Bank overdraft interest - (381) (381) - (350) (350)
-------- -------- -------- -------- -------- --------
Transfer to reserves (45) 1,954 1,909 (53) 1,095 1,042
-------- -------- -------- -------- -------- --------
Return per ordinary share (0.19p) 8.30p 8.11p (0.22p) 4.65p 4.43p
Summarised Cash Flow Statement
(unaudited)
6 months to 6 months to
30 June 30 June
2006 2005
�'000 �'000
Net cash flow from operating (404) (398)
activities
Returns on investment and servicing (381) (350)
finance
Capital expenditure and financial 1,216 1,211
investment
---------- ----------
Increase in cash 431 463
---------- ----------
Balance Sheet (unaudited)
As at As at
30 June 30 June 2005
2006
�'000 �'000
Fixed asset investments 44,223 41,797
Net current liabilities (13,174) (13,020)
---------- ----------
Ordinary shareholders' funds 31,049 28,777
---------- ----------
Net asset value per ordinary share 131.84p 122.19p
Life Offices Opportunities Trust plc Cont'd
Notes
1. The accounts have been prepared in accordance with applicable accounting
standards and the 2005 Statement of Recommended Practice (SORP) issued by the
Association of Investment Trust Companies. In accordance with FRS26, the fixed
asset investments, which comprise traded endowment policies, are categorised as
"fair value through profit or loss" within the accounts.
2. The number of shares in issue at 30 June 2006 was 23,550,000. (30 June 2005
- same). Capital return is based on the net gains during the period of �
1,954,000 (2005 - �1,095,000). Revenue return per share is based on the
revenue loss after taxation for the period of �45,000 (2005 - �54,000).
3. The above figures do not constitute full accounts in terms of Section 240 of
the Companies Act 1985. The accounts for the year to 31 December 2005, on which
the auditors issued an unqualified report, have been lodged with the Registrar
of Companies. The interim report will be mailed to shareholders toward the end
of August 2006. Copies will be available for inspection at 7 Castle Street,
Edinburgh, the registered office of the Company.
ENDS
Life Offices Opportunities (LSE:LOT)
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