Blue Planet Worldwide Financials Investment Trust plc
Interim Report
For the six months ended 31 January 2004
Objective
The Company invests in equities and bonds issued by quoted financial companies
(including former mutuals), and PIBS and bonds issued by building societies and
life assurance companies or their subsidiaries with the objective of obtaining
both capital growth and a dividend yield in excess of the FTSE All-Share Index.
Shareholders approved the broadening of the objectives to cover financial
companies located anywhere in the world at the AGM held in October 2003.
Financial Highlights
For the six months ended 31 January 2004
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2004 2003 2003
(unaudited) (unaudited)
Shareholders' funds (�'000) 12,056 9,354 11,990
Net asset value per share 84.57 65.62 84.11
Share price (p) 63.75 50.00 66.50
Discount (%) 24.6 23.8 20.9
Revenue available for shareholders (�'000) 110 209 440
Revenue return per share (p) 0.77 1.47 3.09
Dividend per share (p) 0.50 1.00 3.00
Dividend yield on our share (%) 4.51
Dividend yield on FTSE All Share Indes (%) 3.58 4.36 3.30
Dividend
An interim dividend of 0.50p net per ordinary share has been declared, payable
on 7 May 2004, to shareholders on the register as at close of business on 23
April 2004. The Trust's shares will be quoted ex-dividend on 21 April 2004.
Chairman's Statement
Performance
In the six months to 31 January 2004 our net asset value per share (NAV) rose
0.6% to 84.57p in line with a rise of 0.6% in our Benchmark Index.
Our share price fell to 63.75 pence per ordinary share - a decrease of4.2 % in
six months. However, because our share price fell while our NAV rose, the
discount to NAV at which our shares traded widened from 20.9% to 24.6%. The
Board and the Managers are committed to reducing the discount on the Company's
shares by the use of buy backs either for cancellation or to hold as treasury
shares.
The best performing stocks in sterling terms over the period were:
- Aberdeen Asset Management, (UK) + 49.6%
- Irish Permanent Plc, (Ireland) + 37.2%
- NPI Finance Plc,(UK) + 18.2%
- Abbey National Plc, (UK) + 7.16%
The worst performing stocks were:
- Royal Bank of Scotland Plc, (UK) -7.8%
- Amvescap plc, (UK) -13.7%
Gearing
Gearing for the Company is provided by a �7,000,000 loan facility. The purpose
of the loan is to acquire investments in the expectation that the returns from
these will exceed the cost of financing the loan. As at the end of the interim
period, the loan, net of cash deposits, represented 42.7% of the Trust's NAV.
Name change to Blue Planet Worldwide Financials Investment Trust
At the Trust's Annual General Meeting held in October 2003, resolutions were
passed to change the Company name to Blue Planet Worldwide Financials Investment
Trust plc and amend the investment remit to allow investment in shares and debt
securities issued by financial companies listed anywhere in the world.
Blue Planet ISA and low cost dealing service
To take out an ISA with Blue Planet Investment Management Limited call 0131 466
6666. They also offer investors a low cost stock-market dealing service. Full
details of these services were given in the last annual report and are available
on their website www.blueplanet.eu.com. Alternatively, they may be obtained by
contacting Blue Planet on 0131 466 6666.
Operating efficiency
The Board regularly reviews with the Investment Manager the operating efficiency
of the Company to see if costs can be reduced in a manner that does not damage
the Company in order that any savings can be passed onto shareholders. This has
led us to reduce the number of newspapers in which we published our share price
and it is now only published in "The Times". Shareholders can also view the
Company's share price and other information about it on the websites of Blue
Planet Investment Management Limited (www.blueplanet.eu.com) and the London
Stock Exchange (www.londonstockexchange.com). To find the Company's share price
on the London Stock Exchange's website go to their home page and type "BPW" in
the "Stock Search" field.
Dividend
In our last report and accounts, our investment managers, Blue Planet Investment
Management Ltd, expressed the view that equities are undervalued and so could
potentially outperform fixed interest securities and cash.They advised the
Board to increase the equity element of the portfolio and reduce the fixed
interest element in order to maximise future returns for shareholders in light
of their view that we were at or near the bottom of the interest rate cycle.
Theportfolios have been adjusted in a timely fashion to take account of this
view, increasing the percentage of the portfolio invested in equities from 76.0%
to 81.1%. Subsequent rises in UK interest rates and equities and falls in the
value of bonds have fully justified this move.
However, as I have indicated in the past, this rebalancing of the portfolio
unavoidably reduces our income and our dividend paying capacity in the short
term. Nevertheless, we are committed to managing this in such a manneras to
minimise its adverse effect on our dividend. As a result an interim dividend of
0.50p per share will be paid on 7 May 2004 to shareholders on the register at
the close of business on 23 April 2004. This represents a 50% reduction on last
year's interim dividend of 1.00p per share.
Outlook
Your Board believes that the outlook for your Company is healthier now than it
has been for a number of years. There are strong indications that major
economies are recovering after an extended period of low or no growth. In
America, the economy posted its fastest rate of growth in nearly twenty years.
Equity markets have continued to rise from the lows seen in March of last year
and there are indications emerging that a sustained recovery may be on the way.
We are invested in a sector which your board believes will be one of the main
beneficiaries of any such recovery and, if this recovery does come to pass, our
high level of gearing should allow us to produce returns to investors that are
above that of the main stock market indices.
The recent reporting season for UK banks has mostly shown increased pre-tax
profits, earnings per share and dividends. Elsewhere in Europe, banks also
continue to fare well. The upturn in stockmarkets has also benefited the
earnings of other financial companies such as stockbrokers, fund managers and
life companies. The improvement in investor confidence and rise in interest
rates should lead investors to switch from bonds and cash into equities and
encourage more takeover activity both of which should further fuel the recovery
in share prices and generate increased fees and commissions for financial
companies.
We believe that all well constructed portfolios should have at their core a
quality portfolio of shares in banks and other financial companies. We believe
that your Trust provides this and should be seen as a core holding for
investors. We look forward to the future with a great deal of confidence and
would like to thank you for your continuing support.
Philip Court
Chairman
18 March 2004
Statement of Total Return
(incorporating the revenue account)
For the six months ended For the six months ended For the year ended
31 January 2004 31 January 2003 31 July 2003
(unaudited) (unaudited)
Revenue Capital Total Revenue Capital Total Revenue Capital Total
� � � � � � � � �
Capital(losses)/gains on
investments
Net realised gains/
(losses) - (74,437) (74,437) - (7,888) (7,888) - 38,976 38,976
Unrealised gains/(losses)
on investments - 246,265 246,265 - (2,881,347) (2,881,347) - (112,404) (112,404)
_________________________________________________________________________
Net capital gains/(losses)
on investments - 171,828 171,828 - (2,889,235) (2,889,235) - (73,428) (73,428)
Realised gain on lapsed
warrants - 467,710 467,710 - 467,710 476,710
Income from investments 320,686 - 320,686 428,592 - 428,592 863,349 - 863,349
Bank interest receivable 31,975 - 31,975 23,670 - 23,670 77,905 - 77,905
_________________________________________________________________________
Gross revenue and capital 352,661 171,828 524,489 452,262 (2,421,525) (1,969,263) 941,254 394,282 1,335,536
gains/(losses)
Administrative expenses (168,358) (69,634) (237,992) (165,499) (66,734) (232,233) (330,099) (132,407) (426,506)
_________________________________________________________________________
Net return before interest 184,303 102,194 286,497 286,763 (2,488,259) (2,201,496) 611,155 261,875 873,030
payable and taxation
Interest payable (74,585) (74,585) (149,170) (77,583) (77,583) (155,166) (154,401) (154,401) (308,802)
_________________________________________________________________________
Return on ordinary 109,718 27,609 137,327 209,180 (2,565,842) (2,356,662) 456,754 107,474 564,228
activities before
taxation
Taxation on return on - - - - - - (16,510) 16,510 -
ordinary activities
_________________________________________________________________________
Return on ordinary 109,718 27,609 137,327 209,180 (2,565,842) (2,356,662) 440,244 123,984 564,228
activities after taxation
Dividend declared
Interim ordinary of 0.50p (71,276) - (71,276) (142,552) - (142,552) (142,552) - (142,552)
(2003 - 1.0p) per share
Final ordinary of - (285,103) - (285,103)
(2003 - 2.0p) per share
_________________________________________________________________________
Transfer to reserves 38,442 27,609 66,051 66,628 (2,565,842) (2,499,214) 12,589 123,984 136,573
_________________________________________________________________________
Return per ordinary share 0.77p 0.19p 0.96p 1.47p (18.00)p (16.53)p 3.09p 0.87p 3.96p
The Revenue column of the statement represents the Profit & Loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
Balance Sheet
At 31 At 31 At 31
January January July
2004 2003 2003
(unaudited) (unaudited)
� � �
Fixed asset investments
Listed on a recognised 17,220,210 12,616,462 16,094,067
investment exchange
Current assets 1,966,252 3,923,703 3,247,313
Creditors: amounts falling due (130,594) (186,127) (351,554)
within one year
Net current assets 1,835,658 3,737,576 2,895,759
Total assets less current 19,055,868 16,354,038 18,989,826
liabilities
Creditors: amounts falling due(7,000,000) (7,000,000) (7,000,000)
after one year (note 5)
Net assets 12,055,868 9,354,038 11,989,826
Capital and reserves
Called-up share capital 7,127,576 7,127,576 7,127,576
Share premium account 5,950,010 5,950,010 5,950,010
Other reserves
Capital reserve - realised (505,569) (207,789) (286,904)
Capital reserve - unrealised (905,796) (3,921,002) (1,152,061)
Revenue reserve 389,647 405,243 351,205
Equity shareholders' funds 12,055,868 9,354,038 11,989,826
Net asset value per ordinary 84.57p 65.62p 84.11p
share
Cashflow Statement
For the For the six For the
six months months year
ended 31 ended 31 ended
January January 31 July
2004 2003 2003
(unaudited) (unaudited)
� � �
Operating activities
Cash received from 376,970 623,134 1,000,292
investments
Interest received 47,174 16,390 76,127
Investment management and (162,462) (154,568) (300,933)
secretarial fees paid
Cash paid to and on behalf (20,070) (19,000) (38,000)
of directors
Other cash payments (52,517) (58,808) (126,556)
Net cash inflow from 189,095 407,148 610,930
operating activities
Servicing of finance
Interest paid (164,366) (277,353) (412,886)
Capital expenditure and
financial investment
Purchase of investments (1,687,995) (324,993) (1,607,136)
Sale of investments 734,005 2,444,555 3,157,202
Equity dividend paid (285,103) (384,819) (527,370)
Management of liquid
resources and financing
Cash placed on deposit - (3,002,588) (3,039,895)
Cash withdrawnfrom deposit 573,836 507,681 1,507,680
Financing
Proceeds from share issue - 2,600 2,600
Borrowings repaid - (7,000,000) (7,000,000)
Borrowings drawn down - 7,000,000 7,000,000
(Decrease)/ increase in (640,528) (627,769) (308,875)
cash
Notes
1. These interim accounts have been prepared under the historical cost
convention, modified to include the revaluation of investments, and in
accordance with applicable Accounting Standards. The Company follows the
recommendations of the 1995 Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies (SORP). The interim accounts have also
been prepared on the assumption that approval as an investment trust continues
to be granted and using the accounting policies in the annual accounts.
2. All expenses are charged to the revenue account with the exception of
management fees and interest charges on borrowings, one half of which (less the
appropriate tax relief) is charged to capital.
3. The return per ordinary share is based upon the following figures:
31 Jan 2004 31 Jan 2003 31 July 2003
Revenue return �109,718 �209,180 �440,244
Capital return �27,609 �(2,565,842) �123,984
Weighted average number of ordinary
shares in issue during the period 14,255,152 14,253,427 14,254,283
4. The net asset value per ordinary share is calculated on the basis of
14,255,152 ordinary shares being the number of ordinary shares in issue at the
end of the period.
5.
The sterling loan is subject to a covenant which sets a maximum gearing threshold,
there are no undrawn facilities andno early repayment penalties. Details of
the loan outstanding at 31 January 2004 were are follows:
Amount Interest Rate Repayment Date
(�) (%)
Sterling Loan 7,000,000 4.33 29 January 2008
6. The figures and financial information for the year ended 31 July 2003 are
extracted from the latest published accounts of the Company and do not
constitute statutory accounts for the year. Those accounts have been delivered
to the Registrar of Companies and include the report of the auditors which was
unqualified and did not contain a statement either under section 237(2) or
237(3) of the Companies Act 1985.
Portfolio Information
At 31 January 2004
(PIBS - Permanent Interest Bearing Shares)
Company Information
Directors Auditors
Philip Court (Chairman) Deloitte & Touche LLP
Christopher Jones SaltireCourt
Kenneth C Murray Edinburgh
EH1 0BR
Investment Manager Stockbrokers
Blue Planet Investment Credit Lyonnais Securities
Management Ltd Broadwalk House
Greenside House 5 Appold Street
25 Greenside Place London EC2A 2DA
Edinburgh EH1 3AA
Telephone No: 0131 466 6666
Facsimile No: 0131 466 6677
Email info@blueplanet.eu.com
www.blueplanet.eu.com
Secretary andRegistered Bankers
Office Lloyds TSB Scotland Plc
Blue Planet Investment Henry Duncan House
Management Ltd 120 George Street
Greenside House Edinburgh EH2 4LH
25 Greenside Place
Edinburgh EH1 3AA
Registrars Custodians
Capita Registrars Limited The Royal Bank of Canada
Capita House 71-77 Queen Victoria Street
Woodsome Park London
Fenay Bridge EC4V 4DE
Huddersfield HD8 0LA
Shareholder Helpline: 01484 600900
Email:shareholder.services@capitaregistrars.co.uk
www.capitaregistrars.co.uk
Registered Number Blue Planet Investment
Registered in Scotland - Management Ltd is regulated
SC177928by the FSA.
Blue Planet Worldwide Financials Investment Trust plc is a member of the
Association of Investment Trust Companies.
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