INVESCO English & International Trust plc
Preliminary Announcement of Interim Results
Six Months to 5 October 2003
Chairman's Statement
In my last Chairman's statement, I expressed the view that after three
difficult years UK smaller companies could be expected to exhibit "..some
recovery this year.." and that INVESCO English & International was well
positioned to benefit from such a recovery. I am pleased that after a bear
market, deeper and more prolonged than any for thirty years, there has been a
healthy increase in share prices and that INVESCO English & International has
outperformed a rising market. From its low of 83.5p reached on 2 April, the
share price recovered to 142p by the period end, whilst the NAV has increased
from 124.20p to 191.57p.
Gearing was maintained toward the top end of the normal 120-130 range,
beginning the year at 130% and ending the period at 128%. The substantial cash
balances, which had been built up to keep gearing within the range as asset
prices fell, were reduced to maintain gearing as asset prices recovered.
Following the permission granted at the series of EGMs in July to buy in
preference shares, the Company has taken the opportunity to purchase a number
of both the 5.5% Cumulative Preferred Shares and the 8.875% Cumulative
Preference Shares. The total amount spent on these purchases over the six
months totalled �5.6m, and is in line with the Board's aim to increase the
flexibility of the Company in the management of the gearing of its capital
account and, in particular, the revenue account. The Board's intention is to
continue to purchase these shares, if they become available in the market at
attractive prices. These purchases, coupled with the net investment referred to
above, amounted to some �17m reducing the gross cash held at the period end to
just below �10m.
The Board has declared an unchanged interim dividend of 0.5p per ordinary
share.
Alan Turner retired as a Director after 8 years. We thank him for his
contribution and we will miss his wisdom and humour.
Equity markets have recovered from a very oversold position in the spring of
this year. This rally had its roots in low valuations coupled with the
reduction in risk associated with the rapid conclusion of the war in Iraq.
Furthermore, markets became much more confident about the likely strength of
economic recovery, led by the US. However, while valuations, particularly in
the UK, do not look stretched, the risks around currency volatility, the
weakness of government finances and the high expectations for acceleration in
economic activity, suggest that the indices are unlikely to make as much
progress in the second half of the year as the first. Nevertheless, with the
bear market psychology broken, there is scope for further positive returns from
our active investment policy.
James W. Findlay
25 November 2003
Consolidated Statement of Total Return
(Incorporating the revenue account)
Six months to 5 October
2003
(Unaudited)
Revenue Capital Total
�'000 �'000 �'000
Gains/(losses) on investments - realised-(20,450)(20,450) - unrealised-
81,675 81,675
Gain/(losses) on foreign currency - - -
Income
UK dividends 2,357 - 2,357
Overseas dividends 276 - 276
Unfranked investment income 70 - 70
Investment dealing profits of subsidiary 30 - 30
undertakings
Underwriting and other commissions 13 - 13
Deposit interest 133 - 133
2,879 61,225 64,104
Investment management fee (505) (505) (1,010)
Other expenses (175) - (175)
Net return before finance costs and taxation 2,199 60,720 62,919
Interest payable and similar charges (822) (821) (1,643)
Return on ordinary activities before tax 1,377 59,899 61,276
Tax on ordinary activities - - 0
Return on ordinary activities after tax 1,377 59,899 61,276
Dividends and other appropriations in respect of (626) - (626)
non-equity shares
Return attributable to equity shareholders 751 59,899 60,650
Dividends in respect of equity shares - note 2 (441) - (441)
Transfer to reserves 310 59,899 60,209
Return per ordinary share 0.85p 67.94p 68.79p
The revenue column of this statement is the profit and loss account of the
Company. All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in the
period.
Consolidated Statement of Total Return
(Incorporating the revenue account)
Six months to 5 October Year to
2002
5 April
(Unaudited)
2003
(Audited)
Total
�'000
Gains/(losses) on investments - realised-1,5911,591(8,643) - unrealised
Revenue Capital Total
�'000 �'000 �'000
- (61,960) (61,960) (65,703)
Losses on foreign - - - (7)
currency
Income
UK dividends 2,485 - 2,485 4,408
Overseas dividends 331 - 331 587
Unfranked 10 - 10 44
investment income
Investment 61 - 61 90
dealing profits of
subsidiary
undertakings
Underwriting and 58 - 58 71
other commissions
Deposit interest 16 - 16 54
2,961 (60,369) (57,408) (69,099)
Investment (470) (470) (940) (1,818)
management fee
Other expenses (139) (29) (168) (298)
Net return before 2,352 (60,868) (58,516) (71,215)
finance costs and
taxation
Interest payable (913) (905) (1,818) (3,484)
and similar
charges
Return on ordinary 1,439 (61,773) (60,334) (74,699)
activities before
tax
Tax on ordinary - - - -
activities
Return on ordinary 1,439 (61,773) (60,334) (74,699)
activities after
tax
Dividends and (692) - (692) (1,383)
other
appropriations in
respect on
non-equity shares
Return 747 (61,773) (61,026) (76,082)
attributable to
equity
shareholders
Dividends in (441) - (441) (1,058)
respect on equity
shares - note 2
Transfer to/(from) 306 (61,773) (61,467) (77,140)
reserves
Return per 0.85p (70.06)p (69.21)p (86.30)p
ordinary share
Consolidated Balance Sheet
At 5 At At 5
October October
5 April
2003 2002
2003
(Unaudited) (Unaudited)
(Audited)
�'000 �'000
�'000
Fixed Assets
Investments 216,123 142,221 173,988
Current assets
Investments of dealing subsidiary 619 - -
undertakings - note 3
Amounts due from brokers 1,357 1,031 77
Prepayments and accrued income 569 619 355
Cash at bank 9,995 27,059 12,668
12,540 28,709 13,100
Creditors: amounts falling due within one year
Amounts due to brokers 3,323 123 800
Tax payable 52 52 55
Accruals and deferred income 903 808 817
Proposed dividend 441 617 441
4,719 1,600 2,113
Net current assets 7,821 27,109 10,987
Total assets less current liabilities 223,944 169,330 184,975
Creditors: amounts falling due after more than
one year
Debenture loans 43,922 43,894 43,866
180,022 125,436 141,109
Capital and reserves
Called-up share capital 33,300 37,987 37,987
Share premium account 67,825 67,825 67,825
Capital Redemption Reserve - note 4 4,687 - -
Capital reserve - realised 107,207 134,606 146,117
Capital reserve - unrealised (41,533) (123,208) (119,465)
171,486 117,210 132,464
Revenue reserve 8,536 8,226 8,645
Shareholder's funds 180,022 125,436 141,109
Analysis of Shareholders' funds
Equity interests (ordinary shares) 168,763 109,491 125,164
Non-equity interests (cumulative preference 11,259 15,945 15,945
and preferred shares) - note 4
180,022 125,436 141,109
Net asset value per share - note 5 191.6p 124.2p 142.0p
Cash Flow Statement
Six months Year to Six months
to to
5 April
5 October 5 October
2003
2003 2002
Audited
Unaudited Unaudited
�'000
�'000 �'000
Cash flow from operating activities 1,855 3,310 2,319
Returns on investments and servicing (2,247) (5,031) (2,724)
of finance
Taxation - 17 20
Capital expenditure and financial
investment
Purchase of investments (39,738) (64,000) (40,225)
Sale of investments 29,306 87,990 48,056
Equity dividends paid (617) (1,675) (1,234)
Cash (outflow)/inflow before financing (11,441) 20,611 6,212
Financing
Buy back of preferred and preference (5,623) - -
shares
Decrease in term loans - (7,000) (7,000)
Movement in cash in the period (17,064) 13,611 (788)
Cash outflow from movement in debt - 7,000 7,000
Change in net debt resulting from cash (17,064) 20,611 6,212
flows
Debenture stock non-cash movement (28) (56) (27)
Translation difference - (7) -
Movement in net debt in the period (17,092) 20,548 6,185
Net debt at beginning of period (16,835) (37,383) (37,383)
Net debt at end of period (33,927) (16,835) (31,198)
Reconciliation of Movement in
Shareholders' Funds
Six months Year to Six months
to to
5 April
5 October 5 October
2003
2003 2002
(Audited)
(Unaudited) (Unaudited)
�'000
�'000 �'000
Revenue return for the period 310 (113) 306
Capital return for the period 59,899 (77,027) (61,773)
Shares purchased for cancellation (5,623) - -
Net movement in Shareholders' funds 54,586 (77,140) (61,467)
Opening Shareholders' funds 125,436 202,576 202,576
Closing Shareholders' funds 180,022 125,436 141,109
Notes to the interim accounts
1. Effective gearing is defined as the amount of available loan facility that
has been invested in the stock market and is not being held in cash. It is
calculated by dividing fixed asset investments by the equity interest in
shareholders' funds.
2. The Directors have declared an interim dividend of 0.5p (2002 interim: 0.5p)
per ordinary share in respect of the year ending 5 April 2004 payable on 9
January 2004 to Shareholders registered on 12 December 2003.
3. Investments of dealing subsidiary undertakings are valued at lower of cost
and mid-market value. At 5 October 2003 market value was �752,000 (2002
interim: �nil).
4. During the period to 5 October 2003 the Company repurchased the following
shares for cancellation:
3.85% (formerly 5.5%) 8.875% Preference Shares
Preferred Shares
Date Nominal Price Date Nominal Price
paid paid
21 July 2003 179,974 95p 20 August 2003 1,000,000 120p
23 July 2003 199,366 95p 26 September 3,000,000 125p
2003
29 July 2003 69,060 95p
21 August 2003 125,000 95p
26 August 2003 5,000 95p
12 September 108,500 95p
2003
Total 686,900 Total 4,000,000
5. The net asset values per ordinary share have been calculated including
investments of subsidiary undertakings at their market values and ordinary
shares in issue of 88,165,987. The debenture stock, preferred shares and
preference shares have been deducted at their nominal values.
6. The financial information for the period to 5 October 2003 has been prepared
on the basis consistent with the accounting policies adopted by the Group in
its statutory accounts for the year ended 5 April 2003.
7. The foregoing financial information at 5 April 2003 is an abridged version
of the Group's statutory accounts for the year then ended. These carry an
unqualified Auditors' report and have been filed with the Registrar of
Companies.
By order of the Board
INVESCO Asset Management Limited
Secretaries
25 November 2003
END