RNS Number:9687F
Charter Pan-European Trust plc
10 July 2006
For Immediate Release 10th July 2006
CHARTER PAN-EUROPEAN TRUST plc
ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
For the six months ended 31st May 2006
The unaudited interim results have been prepared in accordance with the revised
Statement of Recommended Practice: Financial Statements of Investment Trust
Companies. The principal changes arising from the issue of recent Financial
Reporting Standards are detailed in Notes 3, 4 and 5.
NET ASSET VALUE
The net asset value per Ordinary Share at 31st May 2006 was 203.6p, representing
a return of 6.4% for the six months since 30th November 2005 (restated) compared
with a return of 7.0% on the Company's benchmark index, the FTSE World Europe
Index. Since the introduction of a performance target (of a 2% per annum NAV
return in excess of the Company's benchmark) on 1st December 2004 the Company's
Capital NAV has increased has increased by 33.8% compared to 27.1% on the
benchmark over the period to 31st May 2006, or on an annualised basis by 22.9%
per annum compared to 17.3%.
INTERIM DIVIDEND
The Board recommends for the first half of the year an interim dividend of 1.20p
per Ordinary Share (2005: 1.10p per Ordinary Share), payable on 24th August 2006
to shareholders on the Register at 28th July 2006.
SHARE BUY BACKS
During the period under review the Company purchased 1,540,000 Ordinary Shares
for cancellation and 2,210,000 Ordinary Shares into treasury, of which 900,000
Ordinary Shares have subsequently been cancelled. The high level of buyback
activity reflects the Company's exit from the FTSE All-Share Index at the turn
of the calendar year. In the period from 31st May to 5th July 2006, a further
577,000 Ordinary Shares have been purchased for cancellation. The Board, after
consultation with its advisers, has decided to extend the maximum period for
holding shares in treasury before cancellation from six months to twelve months,
in line with current market practice, and to keep this issue under review.
INVESTMENT REVIEW
European Stock markets produced positive returns in the first half of the
Company's financial year.
It has nonetheless also been a volatile period for equities. After strong
returns from December to April, markets suffered a sharp setback in May as
concern over the prospects for inflation emerged. Markets were unnerved both by
an upturn in core US inflation and more hawkish comments from the new Chairman
of the Federal Reserve, Ben Bernanke, on the outlook for interest rates. After
an extended period of strong returns stretching back to March 2003 the setback
was also the trigger for some profit taking and unwinding of leveraged
positions.
In Europe, since the end of November last year the ECB has raised rates three
times from a starting level of 2% to the current level of 2.75%. The
expectation is that we are likely to see a continuation of this pattern with a
further 1% of increases before the end of March next year.
Economic growth across Europe has generally remained robust - helped by a
healthy pick up in German exports. Business confidence, as reflected in the IFO
survey, has also remained at high levels in Germany and illustrates optimism
that long term growth is sustainable and not a temporary phenomenon driven by
the World Cup and spending brought forward in advance of higher VAT rates in
2007.
Corporate activity has also helped underpin markets for much of this period with
major cross- border deals being completed in the industrial gases, steel and
infrastructure sectors. Corporate restructuring remains a powerful theme at a
company specific level, illustrated recently by the steps taken by Siemens and
Allianz to reduce costs.
Within the Company's portfolio positive contributions were generated from the
holdings in Statoil, Man Group, E.ON and UBS. Despite weakness towards the end
of the period, mining shares BHP Billiton and Rio Tinto also produced good
returns. A major disappointment was Carnival, where difficult trading and high
oil prices hit sentiment.
OUTLOOK
Looking ahead, we will continue to monitor closely the prospects for inflation
which will to a large extent determine the path of future interest rates
globally. There remains a possibility that higher interest rates will hit the US
housing sector and consumer spending. If this combines at some stage with a
weaker dollar it would be certainly be problematic for European economies which
are still heavily reliant on exports to generate growth. However, given the
resilience with which much of Europe's export sector has historically coped with
a strong currency, it seems likely that Europe's economies will continue to make
progress in spite of recent nervousness in financial markets. We also believe
that the valuation of European shares generally is reasonable given the outlook
for company profits, further corporate activity and the further restructuring
benefits. As ever we will continue to focus primarily on the prospects for
individual European companies, targeting those with the potential to prosper
even if economic conditions were to deteriorate.
155 Bishopsgate By Order of the Board
London EC2M 3AD P W I Ingram
10th July 2006 Secretary
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31st May 2006
Revenue Capital Total
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 3,736 3,736
Net losses on foreign currency loan - (60) (60)
Other capital charges - (1) (1)
Income 1,194 - 1,194
Investment management fee (81) (441) (522)
Expenses of administration (109) - (109)
Net Return before finance costs and taxation 1,004 3,234 4,238
Finance costs: interest payable and similar charges (24) (65) (89)
Return on ordinary activities before taxation 980 3,169 4,149
Overseas taxation (104) - (104)
UK taxation (83) 83 -
Return attributable to Ordinary Shareholders 793 3,252 4,045
Return per Ordinary Share (Note 1)
(basic and diluted) 2.58p 10.56p 13.14p
BALANCE SHEET
as at 31st May 2006
#'000s
Investments held at fair value through profit or loss 63,708
Net Current Assets 3,186
Total Assets less Current Liabilities 66,894
Creditors-Amounts falling due after one year (6,177)
Total Net Assets 60,717
Called Up Share Capital 320
Capital Redemption Reserve 216
Special Reserve 47,666
Capital Reserves: Realised (469)
Unrealised 11,662
Revenue Reserve 1,322
Shareholders' Funds 60,717
Net Asset Value per Ordinary Share 203.6p
The net asset value is based on 29,817,688 Ordinary Shares in issue
As at 31st May 2006 there were an additional 2,210,000 Ordinary shares held in treasury
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31st May 2005
Revenue Capital Total
(restated) (restated) (restated)
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 3,952 3,952
Net gains on foreign currency loan - - -
Other capital charges - - -
Income 990 - 990
Investment management fee (71) (255) (326)
Expenses of administration (178) - (178)
Net Return before finance costs and taxation 741 3,697 4,438
Finance costs: interest payable and similar charges (1) - (1)
Return on ordinary activities before taxation 740 3,697 4,437
Overseas taxation (77) - (77)
UK taxation (43) 43 -
Return attributable to Ordinary Shareholders 620 3,740 4,360
Return per Ordinary Share (Note 1)
(basic and diluted) 1.75p 10.59p 12.34p
BALANCE SHEET
as at 31st May 2005
#'000s
(restated)
Investments held at fair value through profit or loss 54,437
Net Current Assets 1,742
Total Assets less Current Liabilities 56,179
Creditors-Amounts falling due after one year -
Total Net Assets 56,179
Called Up Share Capital 343
Capital Redemption Reserve 193
Special Reserve 55,236
Capital Reserves: Realised (5,784)
Unrealised 5,213
Revenue Reserve 978
Shareholders' Funds 56,179
Net Asset Value per Ordinary Share 165.6p
The net asset value is based on 33,922,688 Ordinary Shares in issue
As at 31st May 2005 there were no shares held in treasury
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the year ended 30th November 2005
Revenue Capital Total
(restated) (restated) (restated)
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 12,822 12,822
Net gains on foreign currency loan - 20 20
Other capital charges - (7) (7)
Income 1,704 - 1,704
Investment management fee (147) (592) (739)
Expenses of administration (334) - (334)
Net Return before finance costs and taxation 1,223 12,243 13,466
Finance costs: interest payable and similar charges (8) (23) (31)
Return on ordinary activities before taxation 1,215 12,220 13,435
Overseas taxation (127) - (127)
UK taxation (32) 32 -
Return attributable to Ordinary Shareholders 1,056 12,252 13,308
Return per Ordinary Share (Note 1)
(basic and diluted) 3.06p 35.46p 38.52p
BALANCE SHEET
as at 30th November 2005
#'000s
(restated)
Investments held at fair value through profit or loss 67,086
Net Current Liabilities (143)
Total Assets less Current Liabilities 66,943
Creditors-Amounts falling due after one year (2,725)
Total Net Assets 64,218
Called Up Share Capital 336
Capital Redemption Reserve 200
Special Reserve 54,697
Capital Reserves: Realised (2,597)
Unrealised 10,538
Revenue Reserve 1,044
Shareholders' Funds 64,218
Net Asset Value per Ordinary Share 191.3p
The net asset value is based on 33,567,688 Ordinary Shares in issue
As at 30th November 2005 there were an additional 25,000 Ordinary shares held in treasury
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the six months ended 31st May 2006
Ordinary Capital Special Capital Capital Revenue Total
Share Redemption Reserve Realised Unrealised Reserve
Capital Reserve Reserve Reserve
#'000s #'000s #'000s #'000s #'000s #'000s #'000s
Six months ended 31st May 2006
Net Assets at 30th November
2005 as previously stated 336 200 54,697 (2,597) 10,597 473 63,706
Dividends on Ordinary Shares
not recognised as a current
liability - - - - - 571 571
Adjustment to record
investments at bid value - - - - (59) - (59)
Net Assets at 30th November
2005 (restated) 336 200 54,697 (2,597) 10,538 1,044 64,218
Revenue Return - - - - - 793 793
Shares repurchased during the (16) 16 (7,031) - - - (7,031)
period
Dividends on Ordinary Shares - - - - - (515) (515)
Capital Return - - - 2,128 1,124 - 3,252
Net Assets at 31st May 2006 320 216 47,666 (469) 11,662 1,322 60,717
Six months ended 31st May
2005
Net Assets at 30th November
2004 as previously stated 400 136 63,912 (6,424) 2,168 293 60,485
Dividends on Ordinary Shares
not recognised as a current
liability - - - - - 540 540
Adjustment to record
investments at bid value
- - - - (55) - (55)
Net Assets at 30th November 400 136 63,912 (6,424) 2,113 833 6,970
2004 (restated)
Revenue Return - - - - - 620 620
Shares repurchased during the (57) 57 (8,676) - - - (8,676)
period
Dividends on Ordinary Shares - - - - - (475) (475)
Capital Return - - - 640 3,100 - 3,740
Net Assets at 31st May 2005 343 193 55,236 (5,784) 5,213 978 56,179
(restated
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 30th November 2005
continued
Ordinary Capital Special Capital Capital Revenue Total
Share Redemption Reserve Realised Unrealised Reserve
Capital Reserve Reserve Reserve
#'000s #'000s #'000s #'000s #'000s #'000s #'000s
Year ended 30th November 2005
Net Assets at 30th November
2004 as previously stated 400 136 63,912 (6,424) 2,168 293 60,485
Dividends on Ordinary Shares
not recognised as a current
liability - - - - - 540 540
Adjustments to record
investments at bid value (55) (55)
Net Assets at 30th November 400 136 63,912 (6,424) 2,113 833 60,970
2004 (restated)
Revenue Return - - - - - 1,056 1,056
Shares repurchased during the (64) 64 (9,215) - - - (9,215)
period
Dividends on Ordinary Shares - - - - - (845) (845)
Capital Return - - - 3,827 8,425 - 12,252
Net Assets at 30th November 336 200 54,697 (2,597) 10,538 1,044 64,218
2005 (restated)
SUMMARY OF UNAUDITED RESULTS
CASH FLOW STATEMENT
Six Months to Six Months to Year to
31st May 31st May 30th November
2006 2005 2005
#'000s #'000s #'000s
Net cash inflow from operating activities 334 246 599
Servicing of finance
Interest paid (83) - (26)
Investing activities
Purchases of fixed asset investments (12,718) (12,492) (34,551)
Sales of fixed asset investments 19,507 21,098 39,812
Net cash inflow from investing activities 6,789 8,606 5,261
Equity dividends paid (515) (475) (845)
Net cash inflow before financing 6,525 8,377 4,989
Financing
Purchase of Ordinary Shares for cancellation and (7,031) (8,676) (9,215)
held in treasury
Drawdown on Euro Loan 3,452 - 2,746
Net cash outflow from financing (3,579) (8,676) (6,469)
Increase (Decrease) in cash 2,946 (299) (1,480)
CHARTER PAN-EUROPEAN TRUST plc
TOP 20 HOLDINGS AS AT 31ST MAY 2006
Valuation % of
31st May 2006 Total
#'000s Assets* Principal Activities
Statoil 3,416 5.11 Oil and Gas
UBS 3,380 5.05 Banks
GlaxoSmithKline 3,102 4.64 Pharmaceuticals and Biotechnology
E.ON 2,949 4.41 Diversified Industries
Total 2,697 4.03 Oil and Gas
Swatch Group 2,642 3.95 General Retailers
Informa 2,491 3.72 Media and Entertainment
Allianz 2,377 3.55 Insurance
BNP Paribas 2,183 3.26 Banks
Acciona 2,072 3.10 Construction and Building Materials
Dassault Systemes 2,014 3.01 Software and Computer Services
Man Group 1,904 2.85 Speciality and Other Financials
Reuters Group 1,765 2.64 Media and Entertainment
Schneider Electric 1,738 2.60 Electronic and Electrical Equipment
Intercontinental Hotels 1,680 2.51 Leisure and Hotels
Societe Generale 1,650 2.47 Banks
BHP Billiton 1,637 2.45 Mining
EFG Eurobank Ergasias 1,629 2.44 Banks
ENI 1,588 2.37 Oil and Gas
CRH 1,483 2.22 Construction and Building Materials
44,397 66.38
* Total assets are stated net of current liabilities
PORTFOLIO ANALYSIS AS AT 31ST MAY 2006
Valuation % of
31st May 2006 Total Assets*
#'000s
Cyclical Consumer Goods 4,074 6.09
Cyclical Services 5,936 8.87
Financials 18,490 27.64
Non-Cyclical Services 679 1.01
Non-Cyclical Consumer Goods 4,321 6.46
Resources 11,666 17.44
Information Technology 2,014 3.01
Utilities 5,589 8.36
Basic Industries 3,556 5.32
General Industrials 7,383 11.04
Net Current Assets 3,185 4.76
66,893 100.00
* Total assets are stated net of current liabilities
Notes
Note 1
The return per Ordinary Share is based on a weighted average number of shares in
issue 30,785,639
(31st May 2005: 35,330,434; 30th November 2005: 34,545,482).
Note 2
The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items derive from continuing operations. No operations
were acquired or discontinued in the period.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the Income Statement.
Included in the cost of investments are transaction costs on purchases which
amounted to #91,660 (31st May 2005 - #75,925; 30th November 2005 - #174,404) and
transaction costs on sales which amounted to #74,035 (31st May 2005- #43,033;
30th November 2005 - #118,199).
Note 3
Investments are designated as held at fair value through profit or loss in
accordance with FRS 26 'Financial Instruments: Measurement'. Listed investments
are valued at bid market prices. This represents a change in accounting policy.
In prior periods listed investments were valued at mid market prices.
Comparatives have been restated.
Note 4
In accordance with FRS21 'Events After the Balance Sheet Date', the final
dividend payable on Ordinary Shares is recognised as a liability when approved
by shareholders. Interim dividends are recognised only when paid. This is a
change in accounting policy and results in a restatement of the prior year
creditors and a consequential increase in the prior year Net Asset Value.
Dividends paid on Ordinary Shares in respect of earnings for each period are as
follows:
Six months to Six months to Year to
31st May 2006 31st May 2005 30th November 2005
#'000s #'000s #'000s
Interim dividend 1.10p paid 25th August 2005 - - 370
Final dividend 1.70p paid 4th April 2006 (2005 - 515 475 475
1.35p)
515 475 845
Dividends payable at the period end are not recognised as a liability under FRS
21 'Events after the Balance Sheet Date'. Details of these dividends are set
out below.
Six months to Six months to Year to
31st May 31st May 2005 30th November 2005
2006 #'000s #'000s
#'000s
Interim proposed dividend 1.20p payable 24th August
2006 (2005: 1.10p) 358 373 -
Final dividend 1.70p - - 571
The interim and final dividend above is based on the number of shares in issue
at the period end. However, the dividend payable will be based on the number of
shares in issue on the record date and will reflect any purchases or
cancellations of shares by the Company settled subsequent to the period end.
Note 5
Restatement of opening balances
As previously stated Restated
31st May 2005 Adjustment 31st May 2005
#'000s #'000s #'000s
Fixed Assets Investments 54,486 (49) 3 54,437
Net Current Assets 1,369 373 1 1,742
Total Assets less Current Liabilities 55,855 324 56,179
Less: Creditors-amounts falling due after
one year
- - -
Total Net Assets 55,855 324 56,179
Capital and Reserves
Called up Share Capital 343 - 343
Special Reserve 55,236 - 55,236
Capital Reserves: Realised (5,784) - (5,784)
Unrealised 5,262 (49) 3 5,213
Capital Redemption Reserve 193 - 193
Revenue Reserve 605 373 1 978
Shareholders' Funds 55,855 324 56,179
Net asset value per Ordinary Share 164.7p 0.9p 165.6p
Notes (continued)
As previously stated Restated
30th November 2005 Adjustment 30th November 2005
#'000s #'000s #'000s
Fixed Assets Investments 67,146 (60) 3 67,086
Net Current Liabilities (714) 571 2 (143)
Total Assets less Current Liabilities 66,432 511 66,943
Less: Creditors-amounts falling due after (2,725) - (2,725)
one year
Total Net Assets 63,707 511 64,218
Capital and Reserves
Called up Share Capital 336 - 336
Special Reserve 54,697 - 54,697
Capital Reserves: Realised (2,597) - (2,597)
Unrealised 10,598 (60) 3 10,538
Capital Redemption Reserve 200 - 200
Revenue Reserve 473 511 2 1,044
Shareholders' Funds 63,707 571 64,218
Net asset value per Ordinary Share 189.8p 1.5p 191.3p
1 Represents the effect of not recognising the interim dividend (FRS 21).
2 Represents the effect of not recognising the final dividend (FRS 21).
3 Represents the effect of adopting bid prices for listed investments (FRS
26).
Note 6
The interim statement has neither been audited nor reviewed by the Company's
auditors. The financial information for the year ended 30 November 2005 has been
extracted from the statutory accounts for that year which have been delivered to
the Registrar of Companies and restated by reference to the changes in
accounting policies detailed above. The auditor's report on those accounts was
unqualified and did not contain a statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985.
The interim report will be sent to shareholders in mid July 2006 and will be
available to members of the public from the Company's registered office at 155
Bishopsgate, London EC2M 3AD.
For further information, please contact:-
Peter Ingram
Company Secretary
Tel: 020 7065 1467
or
Simon White
Head of Investment Trusts, RCM (UK) Limited
Tel: 020 7065 1539
This information is provided by RNS
The company news service from the London Stock Exchange
END
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