Final Results
October 05 2006 - 12:27PM
UK Regulatory
ANGLO & OVERSEAS Plc
PRELIMINARY ANNOUNCEMENT OF 1ST TRADING PERIOD RESULTS
HIGHLIGHTS
- Strong start for the Company's first period of operations
- Net Asset Value up 18.4% from launch
- Recommended final dividend 1.32p per share, making a total of 1.92p for the
period
- The Board remains committed to the Company's share price trading close to
net asset value
ANGLO & OVERSEAS Plc
PRELIMINARY ANNOUNCEMENT OF 1st TRADING PERIOD RESULTS
The Directors announce the audited statement of 1st trading period results for
the period from 12 May 2005* to 28 July 2006 as follows:-
INCOME STATEMENT (AUDITED)
for the period from 12 May 2005 to 28 July 2006
Revenue Capital Total
�'000 �'000 �'000
Gains on investments - 14,976 14,976
Foreign exchange losses on capital items - (70) (70)
Dividends and interest 2,744 - 2,744
Investment management fee - - -
Other expenses (402) - (402)
Net return before finance costs and 2,342 14,906 17,248
taxation
Taxation (213) - (213)
Net return after taxation 2,129 14,906 17,035
pence pence pence
Return per Ordinary Share ** 2.38 16.63 19.01
The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and the capital return columns are prepared
under guidance published by the Association of Investment Companies (AIC).
A separate Statement of Total Recognised Gains and Losses has not been
prepared as all such gains and losses are included in the Income Statement.
All revenue and capital items derive from continuing operations.
* The Company was incorporated on 12 May 2005, but did not commence operations
until 29 July 2005.
** The revenue return per Ordinary share is based on earnings of �2,129,000
and on 89,646,481 Ordinary shares being the weighted average number of
Ordinary shares in issue during the period from commencement of operations.
The capital return per Ordinary share is based on net capital gains of
�14,906,000 and on 89,646,481 Ordinary shares being the weighted average
number of Ordinary shares in issue during the period from commencement of
operations.
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS (AUDITED)
for the period 12 May 2005 to 28 July 2006
Called- Share Special Capital Capital Capital Distrib- Own Total
up premium reserve redemption reserve reserve utable shares equity
share account reserve revenue held in share-
capital - realised - reserve treasury holders
un-realised funds
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Period ended 28 July 2006
As at 12 May 2005 - - - - - - - - -
Issue of shares 8,972 - - - - - - - 8,972
Premium on issue -
of shares - 80,752 - - - - - 80,752
Costs of share issue - (50) - - - - - - (50)
Transfer on
cancellation of
share premium -
account - (80,702) 80,702 - - - - -
Cost of own
shares bought
into treasury - - - - - - - (337) (337)
Repurchase and
cancellation of
preference shares - - (50) 50 - - - - -
Unrealised
appreciation
on investments
before transfer
on disposal - - - - - 8,803 - 8,803
Net gain on
realisation of
investments - - - - 6,173 - - - 6,173
Foreign exchange
losses on
capital items - - - - - (70) - - (70)
Dividends paid
in the period - - - - - - (538) (538)
Retained net
return for the period - - - - - - 2,129 - 2,129
28 July 2006 8,972 - 80,652 50 6,173 8,733 1,591 (337) 105,834
BALANCE SHEET (AUDITED)
as at 28 July 2006
�'000
Fixed assets:
Investments 101,443
Current assets:
Debtors 663
Short-term investments - cash on deposit 3,339
Cash at bank 1,610
5,612
Creditors - amounts falling due within one year 1,221
Net current assets 4,391
Total net assets 105,834
Capital and reserves:
Called-up share capital 8,972
Special reserve 80,652
Capital redemption reserve 50
Capital reserve - realised 6,173
- unrealised 8,733
Distributable revenue reserve 1,591
Own shares held in treasury (337)
Total equity shareholders' funds 105,834
pence
Net asset value per Ordinary Share 118.36
*Based on total net assets of �105,834,000 and 89,417,707 being the number of
shares in issue as at 28 July 2006, excluding those shares held in treasury.
SUMMARISED STATEMENT OF CASH FLOWS (AUDITED)
for the period 12 May 2005 to 28 July 2006
�'000
Net cash inflow from operating 1,957
activities
Capital expenditure and financial
investment
Purchases of investments (67,095)
Sales of investments 39,384
Exchange losses on settlement (59)
Net cash outflow from capital
expenditure
and financial investment (27,770)
Equity dividends paid (538)
Net cash outflow before financing (26,351)
Financing:
Proceeds of share issue 31,757
Costs of share issue (50)
Own shares purchased and held in (337)
treasury
Net cash inflow from financing 31,370
Increase in cash 5,019
The audited financial information set out above does not constitute the
Company's statutory accounts as defined in section 240 of the Companies Act
1985.The Income Statement, the Reconciliation of Movement in Shareholders'
Funds, the Balance Sheet and Summarised Statement of Cash Flows have been
prepared using the accounting standards and policiesadopted set out in the
Listing Particulars, which have been delivered to the Registrar of Companies,
and in accordance withthe Statement of Recommended Practice 2003 regarding the
Financial Statements of Investment Companies (as revised in December
2005).Statutory accounts for the period ended28 July2006 have been approved by
the Board and audited and will be filed with the Registrar of Companies
following the Company's Annual General Meeting.
The results for the period ended 28 July 2006 will be circulated to
shareholders in the form of an Annual Report, copies of which will be
available at the Company's registered office and will be filed with the
Registrar of Companies.
It is the intention of the Directors to conduct the affairs of the Company so
that they satisfy the conditions for approval as an investment trust company
set out in Section 842 of the Income and Corporations Taxes Act 1988.
In order that the Company's first financial period is aligned with
its first tax accounting period, these annual results have been prepared as at
28 July 2006 (being 365 days from the date that the Company commenced
trading), as permitted by Section 223 of the 1985 Companies Act. The Company's
accounting reference date remains as 31 July.
CHAIRMAN'S STATEMENT
Results
This is the first Annual Report of Anglo & Overseas Plc since its
commencement in July 2005 as the successor to Anglo & Overseas Trust PLC.
Assets of the former company, which was wound up under a scheme of
reconstruction (under section 110 of the Insolvency Act 1986), were
transferred to form the investment portfolio of your Company under the
investment management of Edinburgh Partners Limited. The Company's investments
now comprise concentrated UK and international portfolios, with the objective
being to achieve above average returns over the longer term through both
capital appreciation and income growth.
Investment performance
I am pleased to report that your Company has performed well during
its first period. Over the period to 28 July 2006 the net asset value of the
Company has risen by 18.4% from its initial net asset value of 99.95p to
118.36p. Including the interim dividend of 0.6p per share, which was paid in
May 2006, the total return for the period is 19.0%.
Although the Company's portfolio is not managed by reference to any
stock market index, some comparisons may be useful. The total return (i.e.
capital appreciation plus dividends) from the FT All-Share Index over the same
period was 18.4%. The corresponding total return from the FT All-World ex UK
index was 7.4%, giving a total of 12.9% from an average of these two indices.
As the Directors have decided not to adopt a formal benchmark, the
Company is free to follow its investment policy of investing in shares which
the Investment Manager, Edinburgh Partners, considers to offer the best value
over the longer term. One consequence of this policy is that the composition
of investments held in the Company's portfolio is likely to differ from
portfolios which are linked to market indices. During the period the UK
portfolio had only very limited exposure to energy and resource stocks and the
international portfolio has been, relative to global equity indices,
overweight in Europe and underweight in the US.
The Company has the power, when it is deemed appropriate, to borrow
up to the equivalent of 10 per cent of net assets for investment purposes.
Currently, however, the Company does not have any such borrowings in place, as
the Directors consider that the right circumstances have not arisen.
Share price and discount
As at 28 July 2006 the Company's share price was 108.75p. This
represented a discount to net asset value per share (excluding income) of
6.7%. Over the financial period the discount averaged slightly over 5%.
Your Board believes that it is extremely important that the shares
of your Company trade in a relatively narrow range around asset value. As a
consequence, the Board seeks to actively encourage demand by marketing your
Company to potential investors and by being prepared to exercise its powers to
issue new shares, and to buy-in existing shares, in appropriate circumstances.
The Company has appointed G&N Collective Funds Services to provide
marketing services, including arranging presentations by Edinburgh Partners to
existing and prospective shareholders. Edinburgh Partners also operates a
savings plan through which the Company's shares can be purchased. Information
on the share price, net asset value and the portfolio are published on the
Company's and Edinburgh Partners' websites.
At the Company's launch, the Directors were granted authority to
buy back up to 14.99% of the Company's shares in the open market, where they
believe this to be in the best interests of the Company, and for such shares
to be either cancelled or placed in treasury. The Board has therefore
established guidelines for the repurchase of shares where it considers supply
exceeds demand and that repurchase will not dilute the net asset value of the
remaining shares. During the financial period the Directors exercised this
authority to repurchase a total of 306,674 shares which were placed in
treasury. The authority to buy-in shares will expire at the conclusion of this
period's Annual General Meeting and a Special Resolution will be proposed at
the meeting for its renewal, as well as one to allow the sale of shares out of
treasury for cash without first offering such shares pro-rata to existing
shareholders.
Dividend
Our investment policy is driven by the selection of stocks where
our Investment Manager perceives the best value to be, rather than by income
considerations, and as a result we have not adopted any formal policy to aim
for a particular level of dividend. For this period the Board is recommending
a final dividend of 1.32p per share. Subject to approval by shareholders at
the Annual General Meeting on 10 November 2006 this will be paid on 15
November 2006 to shareholders on the register as at 27 October 2006. The
ex-dividend date will be 25 October 2006. Together with the interim dividend
of 0.6p per share paid last May this will make a dividend of 1.92p for the
period. Our net revenue this period has benefited from the fact that Edinburgh
Partners waived the Investment Management fee for the Company's first period.
Outlook
Global equity markets rose, almost in a straight line, following the market
low-point of 2003. With over three years of solid returns it was perhaps
inevitable that investor confidence had grown to a point where insufficient
attention was being paid to risk. All investment judgements are concerned with
the trade off between risk and return. During the month of May 2006 risk
reappeared on investors' radar screens. The obvious catalyst has been the
persistent rise in global inflation and central banks' interest rate
responses. There is little that has more impact on investors' attitude to risk
than a rise in the cost of money. This would suggest a period of more subdued
returns. Global economic growth is likely to slow in response to more
restrictive economic policy. Inflation does not appear pervasive and hence
interest rates may be near their peak. However, slowing growth implies slower
profit growth and this is likely to hold back equity prices. On the other
hand, the corporate sector has relatively strong balance sheets, cash flow and
muted valuations. As a consequence there are many investment opportunities
available and our Investment Manager expects to maintain a relatively fully
invested position. The investment key is having the patience for investment
opportunities to be realised.
Robert Alcock
Chairman
5 October 2006
END
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