RNS Number:7265I
Close European Accelerated Fund Ltd
11 September 2006
CLOSE EUROPEAN ACCELERATED FUND LIMITED
PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS
The directors announce the unaudited statement of results for the period from
incorporation on 22 June 2005 to 30 June 2006 as follows:-
ABOUT THE COMPANY
Close European Accelerated Fund Limited is a Guernsey incorporated, closed-ended
investment company. With the exception of two Management Shares issued for
administrative reasons, the Company's issued share capital comprises 36,000,000
Participating Shares (the "Shares") the performance of which is designed to
provide investors with a geared capped exposure to the performance of the Dow
Jones EuroStoxx 50 Index (the "Index").
Pursuant to the initial placing and offer for subscription, 36,000,000 Shares
were issued at a price of 100p each on 27 July 2005. All 36,000,000 Shares in
issue rank pari passu, have been admitted to the Official List of the United
Kingdom Listing Authority and admitted to trading on the London Stock Exchange.
The Company has an unlimited life but the Shares will be redeemed on or around
29 July 2011 (the "Redemption Date").
INVESTMENT OBJECTIVE AND POLICY
The investment objective of the Company is to provide shareholders on the
Redemption Date with a payment per Share which will comprise a capital amount
of 100p per Share and a growth amount per Share equal to five times any
percentage increase in the value of the Index (the "End Value") as at 26 July
2011 (the "End Date") relative to its value (the "Start Value") as at 26 July
2005 (the "Start Date"), such amount being expressed in pence and rounded down
to the next half pence, subject to a maximum increase of 67.5 per cent. of the
issue price of 100 pence per Share.
If the End Value is lower than the Start Value, the Shares are designed to repay
the full initial subscription amount of 100p per Share on the Redemption Date
provided that the value of the Index has not fallen below 50 per cent. of the
Start Value at close of business on any Index business day between the Start
Date and the End Date (both dates inclusive).
If the value of the Index has fallen below 50 per cent. of the Start Value at
close of business on any Index business day between the Start Date and the End
Date and the End Value is not at least equal to the Start Value, shareholders
will be repaid the issue price of 100 pence per Share as reduced by the same
percentage by which the End Value is less than the Start Value.
In accordance with the Company's investment policy, the net proceeds derived by
the Company from the issue of Shares and the sale of a Put option have been
invested in a portfolio of debt securities containing embedded derivatives
related to the Index at prices relative to the value of the Index on 26 July
2005 of 3,302.98. Therefore, if the Dow Jones EuroStoxx 50 Index rises 13.5% or
more from its Start Value of 3,302.98 on the Start Date, which equates to a
level of 3,748.88 or higher as at the End Date, the Shares are designed to
return growth of 67.5%.
The final return is subject to there being no counterparty default or any other
unforeseen circumstances.
CHAIRMAN'S STATEMENT FOR THE PERIOD FROM INCORPORATION TO 30 JUNE 2006
At launch the net proceeds derived from the issue of Shares of the Company plus
the proceeds of the sale of a Put option were invested in a portfolio of debt
securities and options at a price based on the level of the Dow Jones EuroStoxx
50 Index at the close of business on 26 July 2005, namely 3302.98. On 30 June
2006 the Dow Jones EuroStoxx 50 Index closed at 3648.92, a rise of 10.5% since
launch. Over the same period, the total market value of the Company's shares
rose by 10.5%.
As the Company's investment portfolio is based upon the performance of the Dow
Jones EuroStoxx 50 Index, it is possible to show the potential capital
entitlements available to shareholders based on the level of the Dow Jones
EuroStoxx 50 Index on 26 July 2011. These figures are for illustrative purposes
only and do not represent forecasts or take into account any unforeseen
circumstances.
As at 26 July 2011:
Final Dow Jones Net Asset Value if Dow Net Asset Value if Dow
EuroStoxx 50 Index Index Jones EuroStoxx 50 Index Jones EuroStoxx 50
Level never closes below Index has closed below
1,651.49 ** 1,651.49**
3,000 100.0 90.5
3,100 100.0 93.5
3,200 100.0 96.5
3,300 100.0 99.5
3,400 114.5 114.5
3,500 129.5 129.5
3,600 144.5 144.5
3,648.92* 152.0 152.0
3,700 160.0 160.0
3,800 167.5 167.5
3,900 167.5 167.5
4,000 167.5 167.5
* Dow Jones EuroStoxx 50 Index level at the end of the reporting period
** On any day from 26 July 2005 to 26 July 2011
Soon after the financial year end, the DJ Eurostoxx 50 Index fell over 150
points to 3492 as the Middle East Israeli / Hezbollah conflict inter alia drove
oil prices to new record highs, prompting concerns that global growth may slow.
The Index subsequently recovered as a cease-fire was agreed in the Middle East
and the world's largest economy, the United States, indicated that its interest
rate rises may have come to a halt, as they were left unchanged for the first
time following 17 consecutive monthly increases since June 2004.
The DJ Eurostoxx 50 Index closed at 3817.76 on 5 September 2006, a rise of 2.3%
in Sterling terms since the financial year end on 30 June 2006. During the
period the Euro weakened 2.2% against Sterling, demonstrating the value of the
Company's lack of exposure to currency movements.
Talmai Morgan
Chairman
MANAGER'S REPORT FOR THE PERIOD FROM INCORPORATION TO 30 JUNE 2006
MARKET REVIEW
The Dow Jones Eurostoxx 50 Index rose significantly, building upon previous
growth, but fell back in the last two months to end up 10.5% over the period.
The banking and insurance sector led the rise with 6 of the largest 10
contributors to the Index return from this sector. Energy companies Suez, E.ON
and Endesa also performed well, in addition to Nokia, a telecommunications
company.
The Dow Jones Eurostoxx 50 Index began the period largely unaffected by the
socio-political instability in key EU countries. In October, French towns
experienced nightly riots led by disaffected urban youths suffering high
unemployment in areas of high concentration of ethnic minorities. Meanwhile in
Germany the inconclusive general election left the country with a coalition
government formed by the Christian Democrats and Social Democrats.
However, in November, the Dow Jones Eurostoxx 50 Index began rising steadily to
reach a high of 3890.94 at the beginning of May 2006, its highest value in four
years, and up 17.8% since the start of the period. This rise was supported by
rising consumer confidence and gross domestic product in the Euro-zone.
Unemployment in the 12 nations sharing the Euro also fell throughout the period,
reaching its lowest level in more than four years. Equity markets were further
boosted by high M&A activity throughout Europe including several large
cross-BORDER="0" mergers. Amongst these were: telecommunication service company
Telefonica's acquisition of O2 plc; energy company Gaz de France's offer for
Suez, another French energy company; and the German utility company, E.ON's
offer for Spanish utility company Endesa, which trumped Spain's Gas Natural
SDG's earlier bid.
Following the peak in equity markets, the Index fell 9.0% in just two weeks
mid-May, during a significant sell-off in markets world-wide. This correction
was due to uncertainty among market participants about the future path of
interest rates in major world economies and increases in risk aversion. As the
sell-off flushed out bargain hunters the Index recovered slightly to end the
period up 10.5%.
During the period the European Central Bank ("ECB") raised interest rates three
times from 2.00% to 2.75%. These moves were widely anticipated as they were in
response to rising CPI inflation, which had been dominated by high energy
prices.
MARKET OUTLOOK
Inflation looks likely to remain above the ECB's target of 2% due to a possible
combination of further increases in oil prices and a stronger than anticipated
pass-through of past oil price rises into consumer prices. Euro-zone borrowing
costs look set to continue to rise in the face of these mounting inflationary
pressures and brisk economic recovery. Indicating a possible quickening in the
pace of interest-rate increases, Jean-Claude Trichet, the ECB's president,
announced that the bank's rate-setting council would take the exceptional step
of meeting in August 2006, rather than through the usual summer holiday
teleconference.
M&A may well be another theme which continues in Europe in the coming months,
encouraging consumer confidence to return and providing equities with further
support. Meanwhile sharp currency fluctuations have become a key concern for
investors this year as the US Dollar weakened significantly against the Euro,
but Asian currencies were held back from their would-be natural appreciation
against the dollar. The Euro's steady gains have however failed to dent
increasingly buoyant Euro-zone consumer sentiment, and the ability of Europe's
economic recovery to withstand further rises in the Euro will be important over
the coming period.
Close Fund Management (Investments) Limited
STATEMENT OF OPERATIONS
for the period from incorporation to 30 June 2006
22 Jun 2005
to 30 Jun 2006
GBP
Net movement in unrealised appreciation on investments 2,025,600
Unrealised depreciation on value of Put option 118,800
Operating expenses (1,307,778)
Gain before financing costs and taxation 836,622
Gain on ordinary activities before taxation 836,622
Taxation on ordinary activities -
Net gain for the period 836,622
Pence
Gain per share for the period 2.32
In arriving at the results for the financial period, all amounts above relate to
continuing operations.
There are no recognised gains or losses for the period other than those
disclosed above.
Reconciliation of gain per share for investment purposes to gain per share per
the financial statements:
Pence
(Loss) per share for investment purposes (2.55)
Adjustment to include expenses on an accruals basis 4.87
Gain per share per the financial statements 2.32
In accordance with International Financial Reporting Standards, expenses should
be attributed to the period to which they relate. The adjustment to expenses to
reflect the application of this accruals basis increases the gain per share of
the Company by 4.87 pence.
The loss per share for investment purposes represents the loss per share
attributable to shareholders in accordance with the Prospectus, which recognises
all expenses of the Company up to and including the date that the Final Capital
Entitlement becomes payable.
NET ASSET STATEMENT
as at 30 June 2006
MANAGEMENT
FUND FUND TOTAL
GBP GBP GBP
FIXED ASSETS
Unquoted financial assets designated
as fair value
through profit and loss 38,025,600 - 38,025,600
CURRENT ASSETS
Debtors 692,280 2 692,282
Cash at bank 1,073,262 - 1,073,262
1,765,542 2 1,765,544
CURRENT LIABILITIES
Creditors - due within one year 13,320 - 13,320
NET CURRENT ASSETS 1,752,222 2 1,752,224
TOTAL ASSETS LESS CURRENT
LIABILITIES 39,777,822 2 39,777,824
Non-current liabilities excluding net
assets attributable to shareholders 2,941,200 - 2,941,200
NET ASSETS ATTRIBUTABLE TO
SHAREHOLDERS 36,836,622 2 36,836,624
SHARES IN ISSUE 36,000,000 2
Pence Pence
NAV PER SHARE 102.32 100.00
Reconciliation of NAV per share for investment purposes to NAV per share per the
financial statements:
Pence
NAV per share for investment purposes 97.45
Adjustment to include expenses on an accruals basis 4.87
NAV per share per the financial statements 102.32
In accordance with International Financial Reporting Standards, expenses should
be attributed to the period to which they relate. The adjustment to expenses to
reflect the application of this accruals basis increases the NAV per share of
the Company by 4.87 pence.
The NAV per share for investment purposes represents the NAV per share
attributable to shareholders in accordance with the Prospectus, which recognises
all expenses of the Company up to and including the date that the Final Capital
Entitlement becomes payable.
STATEMENT OF CASH FLOWS
for the period from incorporation to 30 June 2006
22 Jun 2005
to 30 Jun 2006
GBP
Operating activities
Loss on ordinary activities after taxation 836,622
Less: Unrealised (appreciation) on investments (2,025,600)
Less: Unrealised (depreciation) on value of Put option (118,800)
Add: Increase in accrued expenses 13,320
Less: (Increase) in prepayments and accrued income (692,280)
Net cash outflow from operating expenses (1,986,738)
Investing activities
Purchase of financial assets (36,000,000)
Consideration received on Put option 3,060,000
Net cash outflow from investing activities (32,940,000)
Financing activities
Proceeds of issue of shares 36,000,000
Net cash inflow from financing activities 36,000,000
Cash at beginning of period -
Increase in cash and cash equivalents 1,073,262
Cash at end of period 1,073,262
STATEMENT OF CHANGES IN NET ASSETS
for the period from incorporation on 22 June 2005 to 30 June 2006
MANAGEMENT
FUND FUND TOTAL
GBP GBP GBP
Share Capital Issued 3,600 2 3,602
Share Premium 35,996,400 - 35,996,400
Gain for the period 836,622 - 836,622
Closing balance 36,836,622 2 36,836,624
For further information contact:
Anson Fund Managers Limited
Company Secretary.
Tel: Guernsey 01481 722260
11 September 2006
END OF ANNOUNCEMENT
This information is provided by RNS
The company news service from the London Stock Exchange
END
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