RNS Number:7481Z
Charter European Trust plc
05 July 2007
For Immediate Release 5th July 2007
CHARTER EUROPEAN TRUST plc
ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
For the six months ended 31st May 2007
The unaudited interim results have been prepared in accordance with the revised
Statement of Recommended Practice: Financial Statements of Investment Trust
Companies.
NET ASSET VALUE
The net asset value per Ordinary Share at 31st May 2007 was 255.0p, representing
a return of 15.9% for the six months since 30th November 2006 compared with a
return of 15.2% on a composite of the Company's current benchmark, the FTSE
World Europe (ex UK) Index from 9th January 2007, and its previous benchmark
from 1st December 2006 until 8th January 2007, the FTSE World Europe Index (#).
Since the half year end performance has continued to exceed that of the
market with a return of 17.03% from 1st December 2006 until 4th July 2007
compared to the return on the Company's benchmark of 14.4%.
INTERIM DIVIDEND
The Board recommends for the first half of the year an interim dividend of 1.20p
per Ordinary Share (2006: 1.20p per Ordinary Share), payable on 23rd August 2007
to shareholders on the Register at 27th July 2007.
SHARE BUY BACKS
During the period under review the Company purchased 954,600 Ordinary Shares for
cancellation. In the period from 31st May to 5th July 2007, a further 335,500
Ordinary Shares have been purchased for cancellation.
BOARD CHANGES
We welcome to the Board Nigel Simon, who was appointed a Director on 21st March
2007 in place of Sir Christopher Mallaby who retired at the Annual General
Meeting on 20th March 2007. Nigel has more than 25 years of broad senior
management and strategic experience in leading and managing international
businesses, including 20 years with Gallaher Group PLC.
CHANGE OF AUDITORS
After conducting a beauty parade the Board has decided to appoint RSM Robson
Rhodes LLP as auditors of the Company.
INVESTMENT REVIEW
Despite nervousness about the sustainability of global economic growth,
particularly in the light of a deteriorating US housing market, European
equities delivered strong returns in the first half of the financial year.
Markets responded positively to good company earnings and strong cash flow
growth, which was achieved despite the strength of the Euro. Although interest
rates have risen around the world, this has been implemented in a controlled way
and has primarily been a response to growth in money supply and credit rather
than fears of a major inflationary threat.
In terms of the Trust's portfolio, we saw strong performances from a number of
our key holdings, in particular Swatch Group, Acciona and Schneider Electronics.
Swatch, the Swiss luxury goods company, achieved profit and sales growth above
expectations following strong consumer spending in emerging markets. The
developing world remains a key growth area for luxury goods. Acciona, the
Spanish construction company, has evolved into one of the world's leading wind
power companies and has experienced a re-rating on the back of its underlying
structural growth and increasing investor appetite for securities with
environmental benefits. Finally, Schneider Electronic, the French capital
goods company, performed strongly as its high emerging markets exposure has
resulted in upgrades to profit forecasts.
Merger and acquisition activity in Europe has been a key feature in stock
markets in recent years and we believe that both corporate and private equity
investment interest continues to provide an underpinning to markets. While the
Trust did not benefit directly in this period we expect industry consolidation
to remain a powerful influence through the remainder of the year.
OUTLOOK
We expect equity markets to remain volatile after their recent strong
performances. However, we continue to believe that many individual European
companies remain attractive medium term investments. With a much improved
backdrop in the larger continental European economies, and further benefits from
corporate restructuring, the outlook for company profits growth in Europe
remains positive. This trend should offset the negative influence of further
increases in interest rates. The Trust's holdings are well positioned to
benefit from some important trends in the market and our focus continues to be
on strong business franchises with high quality management teams who will be
able to deliver superior growth and financial returns.
155 Bishopsgate By Order of the Board
London EC2M 3AD P W I Ingram
5th July 2007 Secretary
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31st May 2007
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 9,730 9,730
Net gains on foreign currency loan - 49 49
Other capital charges - (2) (2)
Income 1,266 - 1,266
Investment management fee (81) (471) (552)
Administration expenses (146) - (146)
Net return before finance costs and taxation 1,039 9,306 10,345
Finance costs: interest payable and similar charges (39) (111) (150)
Net return on ordinary activities before taxation 1,000 9,195 10,195
Overseas taxation (165) - (165)
UK taxation (132) 132 -
Net return attributable to Ordinary Shareholders
703 9,327 10,030
Net return per Ordinary Share (Note 1) 2.55p 33.78p 36.33p
BALANCE SHEET
as at 31st May 2007
#'000s
Investments held at fair value through profit or loss 72,100
Net Current Assets 3,354
Total Assets less Current Liabilities 75,454
Creditors-Amounts falling due after one year (6,335)
Total Net Assets 69,119
Called up Share Capital 286
Capital Redemption Reserve 250
Special Reserve 42,249
Capital Reserves: Realised 8,344
Unrealised 16,477
Revenue Reserve 1,513
Shareholders' Funds 69,119
Net Asset Value per Ordinary Share 255.0p
The net asset value is based on 27,102,088 Ordinary Shares in issue
As at 31st May 2007 there were an additional 1,485,000 Ordinary Shares held in treasury
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31st May 2006
Revenue Capital Total Return
#'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)
Administration expenses (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)
Net return on ordinary activities before taxation 980 3,169 4,149
Overseas taxation (104) - (104)
UK taxation (83) 83 -
Net return attributable to Ordinary Shareholders 793 3,252 4,045
Net return per Ordinary Share (Note 1) 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 year ended 30th November 2006
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 8,021 8,021
Net gains on foreign currency loan - 68 68
Other capital charges - (3) (3)
Income 1,958 - 1,958
Investment management fee (160) (476) (636)
Administration expenses (240) - (240)
Net return before finance costs and taxation 1,558 7,610 9,168
Finance costs: interest payable and similar charges (49) (140) (189)
Net return on ordinary activities before taxation 1,509 7,470 8,979
Overseas taxation (161) - (161)
UK taxation (84) 84 -
Net return attributable to Ordinary Shareholders
1,264 7,554 8,818
Net return per Ordinary Share (Note 1) 4.23p 25.29p 29.52p
BALANCE SHEET
as at 30th November 2006
#'000s
Investments held at fair value through profit or loss 61,027
Net Current Assets 3,918
Total Assets less Current Liabilities 64,945
Creditors-Amounts falling due after one year (3,033)
Total Net Assets 61,912
Called up Share Capital 296
Capital Redemption Reserve 240
Special Reserve 44,439
Capital Reserves: Realised 1,925
Unrealised 13,569
Revenue Reserve 1,443
Shareholders' Funds 61,912
Net Asset Value per Ordinary Share 220.1p
The net asset value is based on 28,126,688 Ordinary Shares in issue
As at 30th November 2006 there were an additional 1,485,000 Ordinary Shares held in treasury
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the six months ended 31st May 2007
Called up Capital Special Capital Capital Revenue Total
Share Redemption Reserve Reserve Reserve Reserve
Capital Reserve Realised Unrealised
#'000s #'000s #'000s #'000s #'000s #'000s #'000s
Six months ended 31st May 2007
Net Assets at 30th November 13,569 1,443 61,912
2006 296 240 4,439 1,925
Revenue Return - - - - - 703 703
Shares repurchased during the
period (10) 10 (2,190) - - - (2,190)
Dividends on Ordinary Shares - - - - - (633) (633)
Capital Return - - - 6,419 2,908 - 9,327
Net Assets at 31st May 2007 286 250 42,249 8,344 16,477 1,513 69,119
Six months ended 31st May
2006
Net Assets at 30th November 336 200 54,697 (2,597) 10,538 1,044 64,218
2005
Revenue Return - - - - - 793 793
Shares repurchased during the
period (16) 16 (7,031) - - - (7,031)
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
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 30th November 2006
continued
Called up Capital Special Capital Capital Revenue Total
Share Redemption Reserve Reserve Reserve Reserve
Capital Reserve Realised Unrealised
#'000s #'000s #'000s #'000s #'000s #'000s #'000s
Year ended 30th November 2006
Net Assets at 30th November
2005
336 200 54,697 (2,597) 10,538 1,044 64,218
Revenue Return - - - - - 1,264 1,264
Shares repurchased during the
year (40) 40 (10,258) - - - (10,258)
Dividends on Ordinary Shares - - - - - (865) (865)
Capital Return - - - 4,522 3,031 - 7,553
Net Assets at 30th November
2006 296 240 44,439 1,925 13,569 1,443 61,912
SUMMARY OF UNAUDITED RESULTS
CASH FLOW STATEMENT
Six Months ended Six Months ended Year ended
31st May 2007 31st May 2006 30th November 2006
#'000s #'000s #'000s
Net cash inflow from operating activities 441 334 1,099
Servicing of finance
Interest paid (136) (83) (186)
Financial Investment
Purchases of fixed asset investments (29,581) (12,718) (15,427)
Sales of fixed asset investments 28,333 19,507 30,558
Net cash (outflow) inflow from financial investment (1,248) 6,789 15,131
Equity dividends paid (633) (515) (865)
Net cash (outflow) inflow before financing (1,576) 6,525 15,179
Financing
Purchase of Ordinary Shares for cancellation and
held in treasury (2,192) (7,031) (10,258)
Drawdown of Euro Loan 3,257 3,452 3,392
Repayment of Euro Loan - - (3,017)
Net cash inflow (outflow) from financing 1,065 (3,579) (9,883)
(Decrease) Increase in cash (511) 2,946 5,296
CHARTER EUROPEAN TRUST plc
TOP 20 HOLDINGS AS AT 31ST MAY 2007
Valuation % of
31st May 2007 Total
#'000s Assets* Principal Activities
E.ON 4,109 5.45 Gas, Water and Multi Utilities
Swatch Group 3,514 4.66 Personal Goods
Acciona 3,319 4.40 Construction and Materials
Total 3,127 4.14 Oil and Gas Producers
Statoil 3,038 4.03 Oil and Gas Producers
Novartis 2,942 3.90 Pharmaceuticals and Biotechnology
Informa 2,695 3.57 Media
Schneider Electric 2,448 3.24 Electronic and Electrical Equipment
Umicore 2,374 3.15 Chemicals
Dassault Systemes 2,354 3.12 Software and Computer Services
Bayerische Motoren Werke 2,295 3.04 Automobiles and Parts
Banca Popolare Di Verona 2,150 2.85 Banks
Societe Generale 2,137 2.83 Banks
CRH 2,055 2.72 Construction and Materials
Rio Tinto 2,015 2.67 Mining
Syngenta 1,997 2.65 Chemicals
EFG International 1,932 2.56 Banks
Numico 1,929 2.56 Food Producers
Fresenius Medical Care 1,860 2.47 Healthcare Equipment and Services
AXA 1,817 2.40 Non Life Insurance
50,107 66.41
* Total assets are stated net of current liabilities
PORTFOLIO ANALYSIS AS AT 31ST MAY 2007
Valuation % of
31st May 2007 Total Assets*
#'000s
Basic Materials 8,132 10.78
Consumer Goods 11,066 14.67
Consumer Services 4,275 5.66
Financials 14,519 19.24
Healthcare 4,803 6.36
Industrials 12,109 16.05
Oil and Gas 7,806 10.35
Technology 3,549 4.70
Utilities 5,841 7.74
Net Current Assets 3,354 4.45
75,454 100.00
* 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 27,610,206 (31st May 2006: 30,785,639; 30th November 2006: 29,862,958).
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 #36,948 (31st May 2006 - #91,660; 30th November 2006 - #67,293) and
transaction costs on sales which amounted to #21,236 (31st May 2006 - #74,035;
30th November 2006 - #57,200).
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.
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.
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 2007 31st May 2006 30th November 2006
#'000s #'000s #'000s
Interim dividend 1.20p paid 24th August 2006 - - 350
Final dividend 1.80p paid 5th April 2007 (2006 - 506 515 515
1.70p)
Special dividend 0.50p paid 5th April 2007 141 - -
(2006-Nil)
Prior period over accrual (14) - -
633 515 865
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 2006 30th November 2006
2007 #'000s #'000s
#'000s
Interim proposed dividend 1.20p payable 23rd August
2007 (2006: 1.20p) 325 358 -
Final dividend 1.80p - - 506
Special dividend 0.50p - - 141
325 358 647
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
The interim statement has neither been audited nor reviewed by the Company's
auditors. The financial information for the year ended 30 November 2006 has been
extracted from the statutory accounts for that year which have been delivered to
the Registrar of Companies. The auditors' 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 2007 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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