RNS Number:2266E
Close European Accelerated Fund Ltd
20 September 2007
CLOSE EUROPEAN ACCELERATED FUND LIMITED
PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS
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 each 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").
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% on the Redemption Date.
The final return is subject to there being no counterparty default or any other
unforeseen circumstances.
CHAIRMAN'S STATEMENT FOR THE YEAR ENDED 30 JUNE 2007
At launch the net proceeds derived from the issue of Shares of the Company and
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 29 June 2007 the Dow Jones
EuroStoxx 50 Index closed at 4489.77, a rise of 35.9% since launch and 23.0% for
the year. Over the same periods, the total market value of the Company's shares
rose by 16.0% and 5.0% respectively.
As 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:
Net Asset Value if Dow Net Asset Value if Dow
Final Dow Jones Jones EuroStoxx 50 Index Jones EuroStoxx 50
EuroStoxx 50 Index Index never closes below Index has closed below
Level 1,651.49 ** 1,651.49**
2,800 100.0 84.5
2,900 100.0 87.5
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
4,489.77* 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
Since the financial year end, there has been a considerable increase in
volatility, stemming from systemic concerns that an increase in US sub-prime
mortgage defaults, coupled with a lack of visibility about who is exposed (due
to the risks being sold on via complex derivatives), is undermining confidence
in the banking system. The Dow Jones Eurostoxx 50 Index fell by as much as 9.5%,
to a low of 4,062.33, before recovering somewhat as central banks stepped in
with an injection of liquidity to calm market nerves.
The Index closed at 4,294.56 on 31 August 2007, a fall of 4.3% since the
financial year end on 30 June 2007. The Company's shares, by comparison, fell
1.7% over the same period.
Talmai Morgan
Chairman
MANAGER'S REPORT FOR THE YEAR ENDED 30 JUNE 2007
MARKET REVIEW
Over the period under review, the Dow Jones EuroStoxx 50 Index rose by 23.0%,
the fourth consecutive year of double-digit growth and the best since the height
of the technology stocks inspired boom which ended in 2000. From its 2003 low,
the Index has more than doubled, climbing by 143% to end the period at 4489.77.
The growth in the Index over the last year was broad-based with 47 of the 50
constituents gaining.
The start of the period saw the Index falling back slightly as worries over US
interest rates that had precipitated large falls in May and June, continued to
hang over the market. As the outlook for rates became clearer, the Index
underwent an impressive rally, with only a minor blip in November, caused by a
sharp slide in the value of the US Dollar. The rally lasted up to near the end
of February as corporate activity continued to strengthen and investors awash
with liquidity and a large appetite for risk pushed the Index ever higher.
A more serious correction occurred at the end of February, stemming from Chinese
attempts to rein in domestic borrowing that was being used to speculate in the
equity markets. This then led to a wider sell-off, with the Index falling by as
much 8.6%, as US data pointed to a weakening housing market, particularly in the
sub-prime sector, threatening a sharper economic slowdown than had been
expected. These concerns were however soon brushed off and the Index quickly
recovered its losses as the dip in prices was viewed as a buying opportunity.
The growth in European stock markets reflected the improved performance of their
economies. GDP growth rose to as high as a heady 3.3% annualised rate in
December (remaining above its trend rate in March when it was 3.1%), as domestic
demand improved and global growth remained supportive.
The European Central Bank ("ECB") raised interest rates by 1.25%, in 5 steps of
0.25%, over the period as it attempted to bring the Consumer Price Index (CPI)
back down to its 1.5% target. Despite these increases, and a weaker oil price
over the period, the CPI remains stuck at around the 1.9% mark.
Close Investments Limited
STATEMENT OF OPERATIONS
for the year ended 30 June 2007
Year to 22 Jun 2005
30 Jun 2007 to 30 Jun 2006
GBP GBP
Net movement in unrealised appreciation on
investments 3,159,235 2,025,600
Unrealised depreciation on value of Put option 1,936,165 118,800
Operating expenses (304,733) (1,307,778)
Gain before financing costs and taxation 4,790,667 386,622
Gain on ordinary activities before taxation 4,790,667 836,622
Taxation on ordinary activities - -
Net gain for the year/period attributable to
shareholders 4,790,667 836,622
Pence Pence
Gain per share for the year/period 12.36 2.32
In arriving at the results for the financial year/period, all amounts above
relate to continuing operations.
There are no recognised gains or losses for the year/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 13.14 5.96
Adjustment to include expenses on an accruals basis (0.78) (3.64)
Earnings per share per the financial statements 12.36 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 decreases the gain per share of
the Company by 0.78 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 30 June 2007
30 Jun 2007 30 Jun 2006
GBP GBP
FIXED ASSETS
Unquoted financial assets at fair value through
profit and loss 45,074,215 38,025,600
CURRENT ASSETS
Debtors 625,095 692,282
Cash at bank 992,162 1,073,262
1,617,257 1,765,544
CURRENT LIABILITIES
Creditors - due within one year 10,016 13,320
NET CURRENT ASSETS 1,607,241 1,752,224
TOTAL ASSETS LESS CURRENT LIABILITIES 46,681,456 39,777,824
Non-current liabilities excluding net assets
attributable to
shareholders 1,237,915 2,941,200
NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS 45,443,541 36,836,624
SHARES IN ISSUE 39,550,000 36,000,000
Pence Pence
NAV PER SHARE 114.90 102.32
Reconciliation of NAV per share for investment purposes to NAV per share per the
financial statements:
Pence Pence
NAV per share for investment purposes 110.83 97.45
Adjustment to include expenses on an accruals basis 4.07 4.87
NAV per share per the financial statements 114.90 102.32
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 4.07 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 year ended 30 June 2007
Year to 22 Jun 2005
30 Jun 2007 To 30 Jun 2006
GBP GBP
Operating activities
Net gain for the year/period attributable to
shareholders 4,90,667 836,622
Less: Unrealised (appreciation) on investments (3,159,235) (2,025,600)
Less: Unrealised (depreciation) on value of Put
option (1,936,165) (118,800)
Less: (Decrease)/Increase in accrued expenses (3,304) 13,320
Less: Decrease/(Increase) in prepayments and
accrued income 67,187 (692,282)
Net cash outflow from operating activities (240,850) (1,986,740)
Investing activities
Purchase of financial assets (3,889,380) (36,000,000)
Consideration received on sale of 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 year/period 1,073,262 -
(Decrease)/Increase in cash and cash equivalents (81,100) 1,073,262
Cash at end of year/period 992,162 1,073,262
STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS
for the year ended 30 June 2007
Year to 22 Jun 2005
30 Jun 2007 To 30 Jun 2006
GBP GBP
Opening balance 36,836,624 -
Share capital issued 355 3,602
Share premium 3,815,895 35,996,400
Net gain for the year/period attributable to
shareholders 4,790,667 836,622
Closing balance 45,443,541 36,836,624
For further information contact:
Anson Fund Managers Limited
Company Secretary.
Tel: Guernsey 01481 722260
20 September 2006
E&OE - in transmission
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEFFMSSWSEIU
Close European Accelerated Fund (LSE:CEAF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Close European Accelerated Fund (LSE:CEAF)
Historical Stock Chart
From Jul 2023 to Jul 2024
