RNS Number:3591T
Close European Accelerated Fund Ltd
20 March 2007
CLOSE EUROPEAN ACCELERATED FUND LIMITED
PRELIMINARY ANNOUNCEMENT OF INTERIM RESULTS
The directors announce the unaudited statement of results for the interim period
from 1 July 2006 to 31 December 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 39,550,000
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. A further 3,550,000 Shares
were issued at a price of 107.5p per Share on 21 September 2006. All 39,550,000
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").
Your Board in conjunction with the Company's Manager has, since the initial
placing and offer for subscription of Shares, been successful in raising further
capital for the Company by the subsequent issue of 3,550,000 new Shares.
Looking to the future, your Board remains open to further approaches from
shareholders, prospective shareholders or the Company's Manager which may result
in the issue of further Shares. As was the case with the 3,550,000 Shares
issued in September 2006, any further issue of Shares would only be made where
the proceeds of such issue could be invested in accordance with the Company's
investment objective and policy and on terms which are non-dilutive for existing
shareholders.
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.
MANAGER'S REPORT FOR THE PERIOD TO 31 DECEMBER 2006
INVESTMENT PERFORMANCE
At launch the net proceeds derived from the issue of Shares of the Company and
the proceeds of selling a put option were invested in a portfolio of debt
securities each containing an embedded derivative 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 29 December 2005 the Dow Jones EuroStoxx 50 Index closed at
4119.94, a rise of 24.7% since launch and 15.1% for the year. Over the same
periods, the total market value of the Company's shares rose by 13.3% and 4.6%
respectively.
As the value of the Company's investment portfolio is based upon 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 Jones EuroStoxx 50 Index Jones EuroStoxx 50
Index 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
3,600 160.0 160.0
3,700 167.5 167.5
3,800 167.5 167.5
3,900 167.5 167.5
4,000 167.5 167.5
4119.94* 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
MARKET REVIEW
Over the period under review, the Dow Jones EuroStoxx 50 Index rose by 12.9%,
continuing the strong rally which began in March 2003. From its 2003 low, the
Index has more than doubled, climbing by 122.7% to end the period at 4119.94.
The growth in the Index over the last six months was broad-based with 47 of the
50 constituents gaining, led by the electricity generating sector which saw an
increase in mergers and acquisitions activity as regulators opened up the
European utilities market.
The first weeks of the period saw the Index falling as tension in the Middle
East pushed oil prices to record highs. This was quickly reversed however, as
the outlook for US interest rates that had precipitated large falls in May
became clearer and oil prices subsided. The Index underwent an impressive rally
for the rest of the year with only some minor temporary blips that were quickly
overcome.
The growth in the European stock markets reflected the improved performance of
their economies. GDP growth rose to a heady 2.7% per annum in September whilst
OECD leading indicators climbed higher suggesting, along with other positive
economic data, that the Eurozone economy's recovery is broadly based and
self-sustaining.
The European Central Bank ("ECB") raised rates three times over the period from
2.75% to 3.50% as it attempted to bring the Consumer Price Index (CPI) back down
to its 2.0% target. These increases, together with a weakening oil price, which
fell by as much as 27.6% from its July high over the period, helped the CPI fall
back towards target. The ECB currently expects inflation to hover around 2% in
the coming two years and will act firmly to ensure price stability if it is
deemed necessary.
MARKET OUTLOOK
The macroeconomic environment remains supportive to the eurozone area which is
likely to grow at around its long-term potential rate. This should allow
companies to continue to grow profits, underpinning their share prices. Equity
markets' double-digit growth of the last year, which was supported by increased
corporate activity and earnings expansions, is unlikely to be repeated as recent
interest rate increases move the economy towards a mid-cycle lull. However if
commodity prices keep falling, inflation should remain tame, mitigating the need
for more tightening and providing a boost to valuations.
STATEMENT OF OPERATIONS
for the period ended 31 December 2006
1 Jul 2006 22 Jun 2005
to 31 Dec 2006 to 31 Dec 2005
GBP GBP
Net movement in unrealised appreciation
on investments 2,408,875 1,691,400
Unrealised depreciation / (appreciation) on
value of put option 1,291,500 (702,000)
Operating expenses (147,980) (1,163,751)
Gain / (Loss) before financing costs and 3,552,395 (174,351)
taxation
Gain / (Loss) on ordinary activities before 3,552,395 (174,351)
taxation
Taxation on ordinary activities - -
Net gain / (loss) for the period attributable
to shareholders 3,552,395 (174,351)
Pence Pence
Gain / (Loss) per share for the period 9.35 (0.48)
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 EARNINGS PER SHARE FOR INVESTMENT PURPOSES TO EARNINGS PER
SHARE PER THE FINANCIAL STATEMENTS:
Pence Pence
Earnings per share for investment purposes 9.74 2.75
Adjustment to include expenses on an accruals basis (0.39) (3.23)
Earnings per share per the financial statements 9.35 (0.48)
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 decreases the earnings per share
of the Company by 0.39 pence.
The earnings per share for investment purposes represents the earnings 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 31 December 2006
31 Dec 2006 30 Jun 2006 31 Dec 2005
GBP GBP GBP
FIXED ASSETS
Unquoted financial assets at fair
value through profit or loss 44,323,855 38,025,600 37,691,400
CURRENT ASSETS
Debtors 698,977 692,282 756,070
Cash at bank 1,075,524 1,073,262 1,154,899
1,774,501 1,765,544 1,910,969
CURRENT LIABILITIES
Creditors - due within one year 10,507 13,320 14,718
NET CURRENT ASSETS 1,763,994 1,752,224 1,896,251
TOTAL ASSETS LESS CURRENT
LIABILITIES 46,087,849 39,777,824 39,587,651
Non-current liabilities excluding
net Assets attributable to 1,882,580 2,941,200 3,762,000
shareholders
NET ASSETS ATTRIBUTABLE TO
SHAREHOLDERS 44,205,269 36,836,624 35,825,651
SHARES IN ISSUES 39,550,000 36,000,000 36,000,000
Pence Pence Pence
NAV PER SHARE 111.77 102.32 99.52
RECONCILIATION OF NAV PER SHARE FOR INVESTMENT PURPOSES TO NAV PER SHARE PER THE
FINANCIAL STATEMENTS:
Pence Pence Pence
NAV per share for investment purposes 107.31 97.45 94.24
Adjustment to include expenses on an accruals 4.46 4.87 5.28
basis
NAV per share per the financial statements 111.77 102.32 99.52
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 4.46 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 ended 31 December 2006
1 Jul 2006 22 Jun 2005
to 31 Dec 2006 to 31 Dec 2005
GBP GBP
Operating activities
Net gain / (loss) for the period attributable 3,552,395 (174,351)
to shareholders
Less: Unrealised (appreciation) on (2,408,875) (1,691,400)
investments
Less: Unrealised (depreciation) / appreciation
on value of put option (1,291,500) 702,000
Less: (Decrease) / Increase in accrued (2,813) 14,178
expenses
Less: (Increase) in prepayments and accrued (6,695) (756,070)
income
Net cash outflow from operating activities (157,488) (1,905,103)
Investing activities
Purchase of financial assets (3,889,380) (36,000,000)
Consideration received on put option 232,880 3,060,000
Net cash outflow from investing activities (3,656,500) (32,940,000)
Financing activities
Proceeds of issue of shares 3,816,250 36,000,002
Net cash inflow from financing activities 3,816,250 36,000,002
Cash at beginning of period 1,073,262 -
Increase in cash and cash equivalents 2,262 1,154,899
Cash at end of period 1,075,524 1,154,899
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
for the period ended 31 December 2006
1 Jul 2006 22 Jun 2005 22 Jun 2005
to 31 Dec 2006 to 30 Jun 2006 to 31 Dec 2005
GBP GBP GBP
Opening balance 36,836,624 - -
Share capital issued 355 3,602 3,602
Share premium 3,815,895 35,996,400 35,996,400
Net gain / (loss) for the
period attributable to 3,552,395 836,622 (174,351)
shareholders
Closing balance 44,205,269 36,836,624 35,825,651
For further information contact:
Anson Fund Managers Limited
Company Secretary.
Tel: Guernsey 01481 722260
20 March 2007
E&OE - in transmission
END OF ANNOUNCEMENT
This information is provided by RNS
The company news service from the London Stock Exchange
END
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