TIDMTCT
RNS Number : 8793Z
The Cayenne Trust Plc
23 September 2015
THE CAYENNE TRUST PLC
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2015
Interim Management Report
During the six months to 31st July, the Company's Net Asset
Value per share (NAV), calculated in accordance with AIC
guidelines, increased by 1.6%. On a fully diluted basis NAV
increased by 4.2%. By comparison, over the same period the FTSE All
Share Equity Investment Instruments Index increased by 3.39%.
A dividend of 3.8p was paid on 21st August to shareholders on
the register on 7th August, including those shareholders whose
shares resulted from their conversion at the end of July of their
holdings of the Company's Convertible Unsecured Loan Stock
(CULS).
Since 31st January the Company has repurchased 11,021,191 shares
and GBP10,329,634 nominal of CULS. These repurchases were at prices
representing discounts of between 3% and 5% to NAV at the time of
repurchase and have therefore enhanced NAV.
Following conversion of GBP2,299,113 nominal CULS on the 31st
July, representing more than 80% of the outstanding CULS, your
Board has converted compulsorily the remaining CULS, except where
CULS holders requested cash redemption instead. This allows a much
speedier return of capital to shareholders than would have been the
case if they had had to wait for redemption of the CULS in August
2016.
As explained in the Investment Manager's Report, the Company's
investment portfolio is in good shape to allow for its liquidation
over a few months. The Company's FTSE put options, used as hedging,
expired on 18 September 2015 and in view of the cost of renewing
them and the Company's stated intention to liquidate the portfolio
in the near future, the Board has decided not to continue hedging
the portfolio.
We announced on 15 September 2015 that the Company had entered
into Heads of Agreement with F&C Managed Portfolio Trust plc
under which those of the Company's shareholders who do not wish
their capital to be returned to them in cash will have the
opportunity of rolling-over their shares into shares of F&C
Managed Portfolio Trust plc. A circular will be sent to
shareholders in connection with these proposals shortly.
Jonathan Agnew
Chairman
22 September 2015
Investment Manager's Report
Equity markets entered the six months under review following an
ebullient performance in January which saw the FTSE All Share index
advance by 2.5% and, perhaps more impressively, the DAX index in
Germany gain 9%. Markets saw further progress for the balance of
the first quarter of 2015 but an accumulation of negative news
provoked a sell-off in May and June. Amongst the factors scaring
investors were: the (now regular) revival of fears of a Greek
sovereign debt default and the associated withdrawal of Greece from
the Euro; slowing growth in China; US interest rate hikes; and
falling bond, oil and commodity prices. In fact the falls in bond
prices, which were at times dramatic, appear quite rational to us
as the astonishingly low, and for some countries negative, yields
seen early in the year could not possibly be justified over any
long period.
Markets appear to have recovered their poise after the latest
Greek "solution", but the latter half of the review period saw
little net progress as markets floundered in the midst of the
macro-economic uncertainty. Looking forward we can expect an
environment where interest rates remain historically low,
unemployment continues falling in the major western economies, and
commodity prices reflect subdued global demand.
The Company's portfolio at the period end retained its basic
structure with allocations split amongst five main categories:
Listed Private Equity (10%), Convertible Unsecured Loan Stocks
(14%), Sector Specialists (15%), Specialist Equity (17%) and Real
Estate (9%). There was also cash weighting of circa 25%, as it was
expected that markets were going to be volatile over the summer
months. A redemption request has been made for the remaining
holding in Apollo Fund (10%), following the partial redemption at
the end of June; and this is expected to result in a full cash exit
of that position by the end of September.
Several of the year-end holdings have now been exited
completely: BB Biotech, Ediston Properties REIT, Electra Private
Equity 5% CULS 29/12/2017 and Princess Private Equity (profit
taking), JZ Capital Partners Limited 6% CULS 31/07/2016 and River
and Mercantile UK Micro Cap (ongoing liquidity fears). The F &
C Private Equity holding was also exited entirely, at a substantial
profit. This was the first private equity investment the Company
made in 2009, however the illiquidity of the position has made it
imperative that we exited it when possible not when compelled to.
The majority of the holding in New Star Investment Trust was also
sold and the balance has been sold since the period end.
Shareholders will note from the holdings list that three positions
- Caledonia Investments, BlackRock World Mining Trust
(unfortunately, given its abysmal performance) and RIT Capital
Partners - are unchanged from the year end. These companies offer
the greatest trading liquidity amongst the portfolio's holdings.
Elsewhere positions have been pared back on a pro-rata basis to
finance both the large scale repurchases of CULS and Ordinary
shares and to provide a higher than usual cash balance. This
strategy has ensured that sales have been made in an orderly
fashion and within the constraints of available market depth.
The performance of the healthcare, private equity, property,
technology and CULS positions have all been quite satisfactory over
the period. The only problematic position (lossmaking) has been
BlackRock World Mining Trust which had a torrid time as the
economic slowdown in China led to a collapse of mining and natural
resource shares globally. It is still unclear to what extent this
has potentially been overdone, if at all; in the meantime the
current dividend yield offers some support to the share price.
The portfolio enters the second half of the year in fine shape
(albeit with only 23 positions) and offers good liquidity, should
it be required, in the fourth quarter. The two forward foreign
exchange hedge positions expired in mid-August but were not renewed
given the smaller exposures the Company now holds and the shorter
life expectancy of the Company
Cayenne Asset Management Limited
Investment Manager
22 September 2015
Statement of Comprehensive Income
Six months ended Six months ended Year ended
31 July 2015 31 July 2014 31 January 2015
Unaudited Unaudited Audited
Revenue Capital Total Revenue Capital Total Revenue Capital Total
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 - 1,380 1,380 - 2,419 2,419 - 7,995 7,995
Current assets
held at fair
value:
Gains on futures
contracts - 102 102 - - - - - -
Losses on put
options - (487) (487) - (998) (998) - (1,047) (1,047)
Gains on forward
currency contracts - 357 357 - 187 187 - 295 295
Losses on cancellation
of 3.25% Convertible
Unsecured Loan
Stock 2016 - (1005) (1,005) - - - - (14) (14)
Exchange (losses)/gains
on currency
balances - (23) (23) - 12 12 - 11 11
Investment
and other income 660 - 606 689 - 689 1,295 - 1,295
Investment
management
fee (47) (187) (234) (59) (238) (297) (121) (485) (606)
Investment
performance
fee - - - - - - - (13) (13)
Other expenses (191) (119) (310) (179) (4) (183) (364) (10) (374)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return
before finance
costs and taxation 368 18 386 451 1,378 1,829 810 6,732 7,542
Interest payable
and similar
charges (37) (146) (183) (60) (239) (299) (120) (481) (601)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return on ordinary
activities
before taxation 331 (128) 203 391 1,139 1,530 690 6,251 6,941
Tax on ordinary - - - - - - - -
activities -
-------- -------- -------- -------- -------- -------- -------- -------- --------
Transfer to
reserves 331 (128) 203 391 1,138 1,530 690 6,251 6,941
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return per Ordinary
share
Basic 1.11p (0.43p 0.68p 1.13p 3.28p 4.41p 2.00p 18.12p 20.12p
Diluted 1.01p (0.43p 0.58p 1.03p 3.15p 4.18p 1.86p 15.49p 17.35p
(MORE TO FOLLOW) Dow Jones Newswires
September 23, 2015 02:00 ET (06:00 GMT)
The total column of this statement is the profit and loss
account of the Company. The supplementary revenue and capital
columns are both prepared under guidance published by the
Association of Investment Companies.
All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued
in the year.
A statement of Total Recognised Gains and Losses is not required
as all gains and losses of the Company have been reflected in the
above statement.
Statement of Changes in Equity
For the six months ended 31 July 2015 (unaudited)
Ordinary Capital Equity
Share Share Special Redemption Component Capital Revenue
Capital Premium Reserve Reserve CULS Reserve Reserve Total
2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 January
2015 9,775 15,601 7,783 2,592 1,449 16,138 1,485 54,823
3.25% Convertible
Unsecured
Loan Stock
2016 bought
back and cancelled - - - - (1,167) - 1,167 -
Ordinary shares
re-issued
out of treasury
from conversion
of CULS 2016 - - 2,299 - (243) - - 2,056
Ordinary shares
bought back
and held in
treasury - - (15,859) - - - - (15,859)
Ordinary shares
cancelled
out of treasury (2,958) - - 2,958 - - - -
Net return
from ordinary
activities - - - - - 128 331 203
Final dividend
paid for the
year ended
31 January
2015 - - - - - - - -
--------- ---------- ---------- ------------ ----------- ---------- ---------- ---------
At 31 July
2015 6,817 15,601 (5,777) 5,550 39 16,010 2,983 41,223
--------- ---------- ---------- ------------ ----------- ---------- ---------- ---------
For the six months ended 31 July 2014 (unaudited)
Ordinary Capital Equity
Share Share Special Redemption Component Capital Revenue
Capital Premium Reserve Reserve CULS Reserve Reserve Total
2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 January
2014 9,775 15,601 10,089 2,592 1,473 9,887 1,187 50,604
Ordinary shares
bought back
and held in
treasury - - (305) - - - - (305)
Net return
from ordinary
activities - - - - - 1,139 391 1,530
Final dividend
paid for the
year ended
31 January
2014 - - - - - - (416) (416)
--------- ---------- ---------- ------------ ----------- ---------- ---------- --------
At 31 July
2014 9,775 15,601 9,784 2,592 1,473 11,026 1,162 51,413
--------- ---------- ---------- ------------ ----------- ---------- ---------- --------
For the year ended 31 January 2015 (audited)
Ordinary Capital Equity
Share Share Special Redemption Component Capital Revenue
Capital Premium Reserve Reserve CULS Reserve Reserve Total
2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 January
2014 9,775 15,601 10,089 2,592 1,473 9,887 1,187 50,604
3.25% Convertible
Unsecured
Loan Stock
2016 bought
back and cancelled - - - - (24) - 24 -
Ordinary shares
bought back
and held in
treasury - - (2,306) - - - - (2,306)
Net return
from ordinary
activities - - - - - 6,251 690 6,941
Final dividend
paid for the
year ended
31 January
2014 - - - - - - (416) (416)
--------- ---------- ---------- ------------ ----------- ---------- ---------- --------
At 31 January
2015 9,775 15,601 7,783 2,592 1,449 16,138 1,485 54,823
--------- ---------- ---------- ------------ ----------- ---------- ---------- --------
Statement of Financial Position
31 July 31 July 31 January
2015 2014 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Fixed Assets
Investments held at fair value
through profit or loss 31,071 61,911 61,955
----------- ----------- -----------
Current Assets
Listed put options held at
fair value through profit or
loss 204 490 297
Forward currency contracts
held at fair value through
profit or loss 391 139 206
Debtors 382 1,925 151
Cash at bank 10,201 54 5,273
----------- ----------- -----------
11,178 2,608 5,927
----------- ----------- -----------
Creditors: amounts falling
due within one year
Forward currency contracts
held at fair value through
profit or loss (333) - (74)
Bank overdraft - (29) -
Other creditors (165) (214) (242)
----------- ----------- -----------
(468) (243) (316)
----------- ----------- -----------
Net current assets 10,680 2,235 5,611
----------- ----------- -----------
Total assets less current liabilities 41,751 64,276 67,566
Creditors: amounts falling
due after more than one year
3.25% Convertible Unsecured
Loan Stock 2016 (528) (12,863) (12,743)
----------- ----------- -----------
Net assets 41,223 51,413 54,823
----------- ----------- -----------
Capital and reserves
Ordinary share capital 6,817 9,775 9,775
Share premium account 15,601 15,601 15,601
Other reserves:
Special reserve (5,777) 9,784 7,783
Capital redemption reserve 5,550 2,592 2,592
Equity component 3.25% Convertible
Unsecured Loan Stock 2016 39 1,473 1,449
Capital reserve 16,010 11,026 16,138
Revenue reserve 2,983 1,162 1,485
----------- ----------- -----------
Equity Shareholders' funds 41,223 51,413 54,823
----------- ----------- -----------
Net asset value per Ordinary
share
Basic 166.36p 148.69p 165.02p
Diluted 166.36p 147.68p 160.77p
Notes to the Financial Statements
1. Accounting policies
The financial statements of the Company have been prepared under
the historical cost convention modified to include the revaluation
of fixed assets in accordance with United Kingdom law and
Accounting Standards and with the Statement of Recommended Practice
("SORP") "Financial Statements of Investment Trust Companies and
Venture Capital Trusts", issued by the Association of Investment
Companies (dated November 2014) to comply with the revised
reporting standard.
(MORE TO FOLLOW) Dow Jones Newswires
September 23, 2015 02:00 ET (06:00 GMT)
For the period ended 31 July 2015, the Company is applying for
the first time, FRS104 the Interim Financial Reporting Standard,
issued in March 2015. The revised reporting standard for half year
reporting was issued following the introduction of FRS102, the
Financial Reporting Standard applicable in the UK and Republic of
Ireland, effective for periods commencing on or after 1 January
2015. This forms part of the revised Generally Accepted Accounting
Practice (New UK GAAP).
As a result of the first time adoption of New UK GAAP and the
revised SORP, there has been no impact on the Statement of
Comprehensive Income (previously called the Income Statement),
Statement of Changes in Equity (previously called the Movement if
Shareholders' Funds) or the Statement of Financial Position
(previously called the Balance Sheet). A Cash Flow Statement is no
longer required as the Company meeting the following 3 conditions
for exemption:
-- Substantially all of the investments are highly liquid;
-- Substantially all of the investments are carried at market value; and
-- A Statement of Changes in Equity is provided.
The accounting policies and methods of computation followed in
this half-year report are consistent with the most recent annual
statements.
2. Investment and other income
Six months Six months
ended ended Year ended
31 July 31 July 31 January
2015 2014 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
UK dividends 348 432 742
Unfranked investment income 167 186 342
UK fixed interest 88 69 208
Short-term investment fund
income 3 2 3
606 689 1,295
----------- ----------- -------------
3. Return per Ordinary share
Basic earnings
Six
Six months months
ended ended Year ended
31 July 31 July 31 January
2015 2014 2015
Unaudited Unaudited Audited
Total earnings per Ordinary
share
Total earnings (GBP'000) 203 1,530 6,941
Weighted average number of
Ordinary shares in issue during
the period* 29,846,605 34,702,775 34,499,645
Total earnings per Ordinary
share 0.68p 4.41p 20.12p
----------- ----------- -------------
The total earnings per Ordinary share above can be further
analysed between revenue and capital, as follows:
Revenue earnings per Ordinary
share
Revenue earnings (GBP'000) 331 391 690
Weighted average number of
Ordinary shares in issue during
the period* 29,846,605 34,702,775 34,499,645
Revenue earnings per Ordinary
share 1.11p 1.13p 2.00p
----------- ----------- -----------
Capital earnings per Ordinary
share
Capital earnings (GBP'000) (128) 1,139 6,251
Weighted average number of
Ordinary shares in issue during
the period* 29,846,605 34,702,775 34,499,645
Capital earnings per Ordinary
share (0.43)p 3.28p 18.12p
----------- ----------- -----------
*Excluding treasury shares
Diluted earnings
Six months ended 31 July 2015
The revenue earnings (but not the capital and total earnings)
for the period ended 31 July 2015 are diluted. The diluted revenue
earnings per Ordinary share have been calculated on the assumption
that the 3.25% Convertible Unsecured Loan Stock 2016 was fully
converted on the first day of the financial period, giving a
weighted average of 36,431,851 Ordinary shares in issue, revenue
earnings on ordinary activities after taxation of GBP367,837 after
adding back finance costs of GBP36,614. The diluted capital and
total earnings per Ordinary share are equal to the basic returns
per Ordinary share.
Six months ended 31 July 2014
The revenue, capital and total earnings for the period ended 31
July 2014 were diluted. The diluted revenue, capital and total
earnings per Ordinary share have been calculated on an assumption
that the 3.25% Convertible Unsecured Loan Stock 2016 was fully
converted on the first day of the financial period, giving a
weighted average of 43,648,618 Ordinary shares in issue, revenue
earnings on ordinary activities after taxation of GBP450,670,
capital earnings on ordinary activities after taxation of
GBP1,376,465 and total earnings on ordinary activities after
taxation of GBP1,827,136 after adding back finance costs of
GBP59,471, GBP237,885 and GBP297,356 respectively. The diluted
revenue earnings per Ordinary share of 1.03p, the diluted capital
earnings per Ordinary share of 3.15p and the diluted total earnings
per Ordinary share of 4.18p reflect the saving in finance costs of
the loan stock.
Year ended 31 January 2015
The revenue, capital and total earnings for the year ended 31
January 2015 were diluted. The diluted revenue, capital and total
earnings per Ordinary share have been calculated on an assumption
that the 3.25% Convertible Unsecured Loan Stock 2016 was fully
converted on the first day of the financial period, giving a
weighted average of 43,441,981 Ordinary shares in issue, revenue
earnings on ordinary activities after taxation of GBP809,774,
capital earnings on ordinary activities after taxation of
GBP6,730,512 and total earnings on ordinary activities after
taxation of GBP7,540,286 after adding back finance costs of
GBP120,030, GBP480,120 and GBP600,150 respectively. The diluted
revenue earnings per Ordinary share of 1.86p, the diluted capital
earnings per Ordinary share of 15.49p and the diluted total
earnings per Ordinary share of 17.35p reflect the savings in
finance costs of the loan stock.
4. Net asset value per Ordinary share
31 July 31 July 31 January
2015 2014 2015
Unaudited Unaudited Audited
Net asset values attributable
(GBP'000) 41,223 51,413 54,823
Ordinary shares in issue at
the period end * 24,778,722 34,577,581 33,222,827
----------- ----------- -----------
Basic net asset value per
Ordinary share 166.36p 148.69p 165.02p
----------- ----------- -----------
The basic net asset value per Ordinary share is based on net
assets of GBP41.223m after deducting the liability component of the
3.25% Convertible Unsecured Loan Stock 2016 and on 24,778,722
Ordinary shares, being the number of Ordinary shares in issue at
the period end excluding 2,489,188 Ordinary shares treasury
shares.
Under The Association of Investment Companies (AIC) guidelines,
the basic net asset value per Ordinary share is calculated as
follows:
31 July 31 July 31 January
2015 2014 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Total assets less current liabilities
(per the balance sheet) 41,751 64,276 67,566
Redemption value of 3.25% Convertible
Unsecured Loan Stock 2016 (365) (13,138) (12,947)
----------- ----------- -----------
Net assets 41,386 51,138 54,619
Ordinary shares in issue at
the period end * 24,778,722 34,577,581 33,222,827
----------- ----------- -----------
Basic net asset value per Ordinary
share 167.02p 147.89p 164.40p
----------- ----------- -----------
*Excluding 2,489,188 Ordinary shares held in treasury (31 July
2014: 4,525,329; 31 January 2015: 5,880,083).
5. Share Capital
During the period 10,001,521 (31 July 2014: 218,296; 31 January
2015: 1,573,050) Ordinary shares were bought back and placed in
treasury for an aggregate net consideration of GBP15,859,355 (31
July 2014: GBP305,329; 31 January 2015: GBP2,306,254). No Ordinary
shares held in treasury were re-issued into the market (31 July
2013: nil; 31 January 2014: 350,000). The Company cancelled during
the period 11,835,000 (31 July 2014: none; 31 January 2015: none)
Ordinary shares out of treasury.
The Company issued 1,557,416 (31 July 2014: none: 31 January
2015: none) Ordinary shares from treasury during the period in
consideration of the conversion of "2,299,113 of CULS 2016.
The 27,267,910 Ordinary shares in issue at the period end (31
July 2014 and 31 January 2015: 39,102,910) includes 2,498,188
Ordinary shares held in treasury (31 July 2014: 4,525,329; 31
January 2015: 5,880,083).
(MORE TO FOLLOW) Dow Jones Newswires
September 23, 2015 02:00 ET (06:00 GMT)
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