TIDMCPE
RNS Number : 0414H
Charter European Trust plc
11 February 2010
For immediate release11th February 2010
CHARTER EUROPEAN TRUST PLC
RESULTS FOR THE YEAR ENDED 30th NOVEMBER 2009
The following comprises extracts from the Company's Annual Financial Report for
the year ended 30th November 2009. The full Annual Financial Report is
available to be viewed on or downloaded from the company's website at
www.chartereuropean.co.uk. Copies will be mailed to shareholders shortly.
Chairman's Statement
Your Company has delivered excellent results, both in absolute and relative
terms, over the year to 30th November 2009.
The net asset value per share rose during the year from 177.4p to 245.2p, an
increase of 38.2%. This return was 7.0% better than our benchmark (the FTSE
World Europe (ex UK) Index (GBP)), which increased by 31.2%. The share price
rose by 43.2%.
This performance is all the more commendable because it has been achieved in one
of the most testing market environments we have witnessed. It is also the third
consecutive year in which the Manager has delivered strong outperformance
against our benchmark. Indeed, your Company has now enjoyed a cumulative total
return of 61.9% since the reconstruction of the Company in April 2002 compared
to a return on the benchmark of 25.9%. I would, on your behalf, like to
congratulate Mark Lovett and his colleagues at RCM, for achieving such strong
and consistent results over this period.
Earnings fell from 5.25p to 3.94p, reflecting the non-recurrence of a number of
exceptional items (including the VAT refund) and dividend cuts. However the
Board is recommending a final ordinary dividend of 2.65p per Ordinary Share
payable on 1st April 2010 to shareholders on the Register at 26th February 2010,
which makes a total dividend for the year to 30th November 2009 of 4.05p per
Ordinary Share. By virtue of its revenue reserve your Company has been able to
maintain the same basic annual dividend as in the preceding year.
The twelve months to 30th November 2009 encompass one of the more dramatic
episodes in post-war stock market history; the fact that western markets ended
the year in positive territory masks the real concerns evident earlier on in
this period. Indeed, the first three months of the period raised the prospect
that large parts of the western banking system might fail altogether and credit
markets anticipated that the number of corporate defaults might exceed those
experienced during the Great Depression.
In this context the Manager's decision selectively to deploy cash into some
heavily discounted opportunities in the first quarter of 2009 was well judged.
The Manager has remained true to his investment approach throughout the period,
maintaining a concentrated portfolio of investments and using the Company's
liquidity (and gearing at times) to take advantage of specific opportunities as
they present themselves.
During the course of the year the Company has bought back 375,700 shares for
cancellation and 270,500 shares for Treasury and since the year end has
purchased a further 60,000 shares for cancellation. The buyback policy has
continued to reduce the volatility of the discount to asset value and modestly
enhanced the net asset value per share during the period.
All the Directors are standing for annual re-election and their biographies are
set out page 13.
It now seems likely that 2010 will be the year in which economies will need to
establish self sustaining growth following the extraordinary interventions by
governments and central banks over the last two years. The outcome of this
process of withdrawing support remains very uncertain.
Notwithstanding the difficult backdrop we are reasonably confident that the
market and economic recovery can be sustained, particularly in European markets.
We continue to believe that the Manager's stock-picking approach is the right
one in this uncertain and at times volatile market environment.
Giles Weaver
11th February 2010
Manager's Review
While the Company delivered strong positive returns, the period under review
incorporates one of the most dramatic and traumatic times for the global economy
in recent memory. The collapse of Lehman Brothers resulted in extremely weak
markets at the close of 2008 and beginning of 2009. Interbank funding stopped
and credit spreads ballooned as confidence in the ability to measure
counterparty risk disappeared; with no Government backstop, and with the opacity
of financial institution accounts, the normal day-to-day activities of the
financial system ceased to function. Additional problems at other US financial
institutions and within the banking system quickly developed; AIG failed, but
was rescued by the US authorities, Merrill Lynch was forced into the hands of
Bank of America and a number of banks across Europe which were highly dependent
on the wholesale funding markets suffered extreme liquidity shortages. Taken
alone, each of these events would have been highly significant, but crammed into
a short period of time they forced investors close to a state of panic.
Companies responded aggressively by both cutting costs and conserving cash flow
through inventory management. This included an overall de-stocking of their
operations to reflect the anticipated lower growth environment. While initially
slow to respond, the extent of the issues surrounding both the financial system
and the real economy did galvanise governments and monetary authorities to
respond in a truly unprecedented manner. Loose monetary policy, injection of
liquidity, expansive fiscal policy and so-called 'quantitative easing' were all
weapons of choice through the early days of the crisis. These actions were the
catalyst for a sharp market recovery which began in March and continued through
the remainder of the year. At this early stage, it appears that the policy
initiatives have been successful in averting the worst possible scenario - a
global economic depression - although the outlook will remain challenging.
Volatility was also high at the market, sector and stock levels. In the early
months of the year, as the credit storm evolved, volatility in all asset classes
including equities reached levels only experienced in the 1930s, 1974-75 and a
brief period in 1987.
As the credit crisis hit markets, the Company's portfolio performed relatively
well, as our defensive stance and focus on high quality, cash generative
companies was rewarded. Investors fled to these types of companies as fear
drove investment decisions and portfolio strategy. Equity markets were one of
the few 'risk' asset markets that remained open and liquid throughout the crisis
and in many areas there was panic selling of any stock with sensitivity to the
global economy, with little reference to its underlying valuation. This
prompted us to review very closely a number of the more economically sensitive
areas of the market for potential new investment ideas. For the brave long-term
investor there were some excellent opportunities to buy high-quality businesses
at exceptional valuations despite some economic risk to short-term
profitability. Turnover within the Company's investment portfolio rose as we
responded to these opportunities with a number of new holdings which benefited
from the strong market recovery when it occurred.
One such example of a new holding was ASM International, the Dutch-registered
manufacturer of semiconductor equipment. ASMI has strong market positions and
owns a majority shareholding in the exceptionally fast growing Asian Pacific
business. This Asian business is favourably positioned to capture the growth in
semiconductor capacity in China and other key regions in the Pacific basin.
Semiconductor equipment spending has already started to pick up aggressively as
technology advances and new consumer product introductions drive investment
plans.
Positive contributors to investment performance included DSM, the Dutch
speciality chemical company, and Saipem, the Italian oil services company, which
both delivered excellent returns. They are just two examples of businesses with
strong underlying franchises and high financial returns which suffered during
the financial crisis and reached levels which offered substantial value for
long-term investors. Less successful last year were our holdings in Unicredito
Italiano, Nokia and Reed Elsevier, which did not participate in the market
rally.
We also bought Unilever NV where we are increasingly confident in the new CEO's
opportunity to create substantial value in this global consumer goods company.
Unilever has excellent emerging market positions and a number of powerful brands
but has struggled to consistently capitalise on these franchises. We have
followed the new CEO, Paul Polman, and his career at Procter & Gamble and Nestlé
and believe he is very well placed to drive this business and deliver the
sustainability of returns that can result in a re-rating relative to global
peers. Initial feedback has been positive and we will obviously carefully
review progress through the rest of the year.
During the year we gradually built up positions in the healthcare sector; an out
of favour area of the stock market, but one which also includes certain niche
providers who have excellent growth prospects. As an example, Fresenius Medical
Care, the global leading provider of dialysis services, delivered strong results
and performed well in the second half of the year. Other holdings in the
healthcare area are Sanofi-Aventis, the global pharmaceutical group, and Rhön
Klinikum, the German hospital services provider.
As regards the outlook for 2010, if the global economic recession is indeed
over, as seems likely, then this must be considered an excellent outcome given
the state of affairs at the beginning of this year. It should, however, also be
recognised that a sustainable recovery is still to be achieved. The biggest
obstacle to a sustained recovery is a lack of credit growth. Credit growth is
an essential feature for sustained growth in investment and consumption, the
primary components of a growing economy. Yet, despite the extent of monetary
stimulus thrown at the banking system over the past 18 months, actual credit
growth has continued to be weak. Whether or not the banking system will start
to grow the supply of credit remains to be seen, but it will be key in
determining the outcome for the economy over the next cycle.
The other major obstacle facing the global economy is the parlous state of
Government finances, particularly in the US and the UK. Europe as a region is
better positioned, with the major countries having lower levels of Government,
as well as consumer, indebtedness. However, within Europe, the situation varies
enormously with certain smaller economies, such as Greece, experiencing real
structural issues. For many countries, interest alone will account for a
sizeable chunk of Government revenues. There could also be negative
consequences for long-term interest rates should the markets start to doubt the
ability of Governments to pay back their debt, although admittedly the
experience of Japan in the 1990s would suggest otherwise.
Notwithstanding these obvious risks facing the global economy, equity markets
have made strong progress. Long-term valuation metrics suggest the European
markets remain undervalued, implying that now is still an attractive entry-point
for long-term investors. It is important to recognise that much of the recent
move in equity markets has been driven by a reassessment of the sustainable
valuation level for many economically sensitive shares that were previously
priced for a depression or, in some cases, bankruptcy. Many of the larger
capitalisation, defensive growth companies have not taken part in the rally,
despite the fact that they can also be expected to benefit from any economic
recovery. Indeed, we currently see the best value in these defensive growth
companies, most of which have high and sustainable free cash flow yields.
While some rotation in market leadership may occur, with the significant level
of cash in money market accounts and the attractive valuation of equities, we
are not anticipating a major reversal in the market overall. However,
visibility and confidence in the exact shape of this economic cycle is low so we
anticipate that volatility will remain an important feature of this market;
periods of extreme volatility do inevitably produce stock-specific opportunities
over a wide range of sectors which should provide plenty of opportunities for an
active stock-picking fund manager. We will continue to be vigilant in
identifying attractive investment opportunities across Europe.
Mark Lovett
11th February 2010
Principal Risks and Uncertainties
The principal risks and uncertainties fall broadly under the following
categories:
Investment and Strategy: An inappropriate investment strategy, for example
asset allocation or the level of gearing, may lead to underperformance against
the Company's benchmark index and peer companies, resulting in the Company's
shares trading on a wider discount. The Board manages these risks by
diversification of investments through its investment restrictions and
guidelines which are monitored and reported on. RCM (UK) Limited ("RCM")
provides the Directors with timely and accurate management information,
including performance data and attribution analyses, revenue estimates,
liquidity reports and shareholder analyses. The Board monitors the
implementation and results of the investment process with the Investment
Manager, who attends all Board Meetings, and reviews data which show statistical
measures of the Company's risk profile. The Investment Manager employs the
Company's gearing tactically, within a strategic range set by the Board.
Currently, gearing must not exceed 20% of net assets at time of drawdown.
Market: Market risk arises from volatility in the prices of the Company's
investments. It represents the potential loss the Company might suffer through
holding investments in the face of negative market movements. The Board
reviews stock selection and levels of gearing on a regular basis and has set
investment restrictions and guidelines which are monitored and reported on by
RCM (UK) Limited ("RCM"). The Board monitors the implementation and results of
the investment process with the Investment Manager. Further disclosure on market
and other financial risks faced by the Company are disclosed in Note 16 on pages
43 to 45.
Concentration Risk: The Company has a focused portfolio of around 30 holdings,
which may be more volatile than a more diversified portfolio.
Accounting, Legal and Regulatory: In order to qualify as an investment trust,
the Company must comply with Section 842 of the Income and Corporation Taxes Act
1988 ("Section 842"). Details of the Company's approval are given under
"Business of the Company" on page 15. Should the Company breach Section 842,
it may lose investment trust status and as a consequence realised capital gains
within the Company's portfolio would be subject to Corporation Tax. The Section
842 qualification criteria are monitored by RCM and results reported to the
Board at each Board Meeting. The Company must also comply with the provisions
of the Companies Acts 1985 and 2006 and, as its shares are listed on the London
Stock Exchange, the UKLA Listing Rules. A breach of the Companies Acts could
result in the Company and/or the Directors being fined or the subject of
criminal proceedings. Breach of the UKLA Listing Rules may result in the
Company's shares being suspended from listing which in turn would breach Section
842. The Board relies on its Company Secretary and its professional advisers to
ensure compliance with the Companies Acts 1985 and 2006 and the UKLA Listing
Rules.
Corporate Governance and Shareholder Relations: Details of the Company's
compliance with Corporate Governance best practice, including information on
relations with shareholders, are set out in the Corporate Governance Report on
pages 23 to 26.
Operational: Disruption to, or failure of, RCM's accounting, dealing or payments
systems or the custodian's records may prevent accurate reporting and monitoring
of the Company's financial position. RCM has transferred operational functions
principally relating to trade processing and investment administration to The
Bank of New York Mellon - London Branch. Details of how the Board monitors the
services provided by RCM and other suppliers and the key elements designed to
provide effective internal control are included within the Internal Control
section of the Corporate Governance Report on pages 23 to 26.
Related Parties' Transactions
During the financial year, no transactions with related parties have taken place
which have materially affected the financial position or the performance of the
Company during the period.
Directors' Responsibilities
The Directors each confirm to the best of their knowledge that:
a) the financial statements, prepared in accordance with applicable accounting
standards, give a true and fair view of the financial position and profit or
loss of the Company; and
b) the Annual Financial Report, to be published shortly, includes a fair
review of the development and performance of the business and the position of
the Company, together with a description of the principal risks and
uncertainties that it faces.
155 Bishopsgate For and
on behalf of the Board
London EC2M 3AD C G H Weaver
11th February 2010 Chairman
INCOME STATEMENT
for the year ended 30th November 2009
+--------------------------------+----------+----------+----------+
| | |
+--------------------------------+--------------------------------+
| | GBP'000s | GBP'000s | |
| | | |GBP'000s |
+--------------------------------+----------+----------+----------+
| | Revenue | Capital | Total |
| | | | Return |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| Net gains on investments at | - | 16,596 | 16,596 |
| fair value | | | |
+--------------------------------+----------+----------+----------+
| Losses on foreign currencies | - | (38) | (38) |
+--------------------------------+----------+----------+----------+
| Income | 1,575 | - | 1,575 |
+--------------------------------+----------+----------+----------+
| Investment management fees | (112) | (559) | (671) |
+--------------------------------+----------+----------+----------+
| Investment management fee VAT | 11 | 35 | 46 |
| refund | | | |
+--------------------------------+----------+----------+----------+
| Administration expenses | (269) | (8) | (277) |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| Net return before finance | 1,205 | | |
| costs and taxation | | 16,026 | 17,231 |
+--------------------------------+----------+----------+----------+
| Finance costs: interest | | | |
| payable and similar charges | (1) | (1) | (2) |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| Net return on ordinary | | | |
| activities before taxation | 1,204 | 16,025 | 17,229 |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| Taxation | (260) | 79 | (181) |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| Net return attributable to | | | |
| Ordinary Shareholders | 944 | 16,104 | 17,048 |
+--------------------------------+----------+----------+----------+
| | | | |
+--------------------------------+----------+----------+----------+
| Return per Ordinary Share | | | |
| (Note B) | 3.94p | 67.32p | 71.26p |
+--------------------------------+----------+----------+----------+
| (basic and diluted) | | | |
+--------------------------------+----------+----------+----------+
BALANCE SHEET
as at 30th November 2009
+---------------------------------------+----------------+
| | 2009 |
| | GBP'000s |
+---------------------------------------+----------------+
| Investments held at fair value | 59,809 |
| through profit or loss | |
+---------------------------------------+----------------+
| Net Current Liabilities | (1,716) |
+---------------------------------------+----------------+
| Total Net Assets | 58,093 |
+---------------------------------------+----------------+
| | |
+---------------------------------------+----------------+
| | |
+---------------------------------------+----------------+
| Called up Share Capital | 258 |
+---------------------------------------+----------------+
| Capital Redemption Reserve | 278 |
+---------------------------------------+----------------+
| Special Reserve | 34,821 |
+---------------------------------------+----------------+
| Capital Reserve | 20,853 |
+---------------------------------------+----------------+
| Revenue Reserve | 1,883 |
+---------------------------------------+----------------+
| | |
+---------------------------------------+----------------+
| Shareholders' Funds (all equity | 58,093 |
| interests) | |
+---------------------------------------+----------------+
| | |
+---------------------------------------+----------------+
| Net asset value per Ordinary Share | 245.2p |
+---------------------------------------+----------------+
The net asset value is based on 23,695,917 Ordinary Shares in issue at the year
end.
INCOME STATEMENT
for the year ended 30th November 2008
+--------------------------------+----------+----------+-------------------+
| | |
+--------------------------------+-----------------------------------------+
| | GBP'000s | GBP'000s | |
| | | | GBP'000s |
+--------------------------------+----------+----------+-------------------+
| | Revenue | Capital | Total |
| | | | Return |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| Net losses on investments at | - | (21,076) | (21,076) |
| fair value | | | |
+--------------------------------+----------+----------+-------------------+
| Losses on foreign currencies | - | (2) | (2) |
+--------------------------------+----------+----------+-------------------+
| Income | 2,080 | | 2,080 |
| | | - | |
+--------------------------------+----------+----------+-------------------+
| Investment management fees | (124) | (440) | (564) |
+--------------------------------+----------+----------+-------------------+
| Investment management fee VAT | 64 | 191 | 255 |
| refund | | | |
+--------------------------------+----------+----------+-------------------+
| Administration expenses | (298) | (4) | (302) |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| Net return before finance | 1,722 | (21,331) | (19,609) |
| costs and taxation | | | |
+--------------------------------+----------+----------+-------------------+
| Finance costs: interest | (14) | - | (14) |
| payable and similar charges | | | |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| Net return on ordinary | 1,708 | (21,331) | (19,623) |
| activities before taxation | | | |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| Taxation | (402) | 177 | (225) |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| Net return attributable to | | (21,154) | (19,848) |
| Ordinary Shareholders | 1,306 | | |
| | | | |
+--------------------------------+----------+----------+-------------------+
| | | | |
+--------------------------------+----------+----------+-------------------+
| Return per Ordinary Share | | | |
| (Note B) | 5.25p |(84.95)p | (79.70)p |
+--------------------------------+----------+----------+-------------------+
| (basic and diluted) | | | |
+--------------------------------+----------+----------+-------------------+
BALANCE SHEET
as at 30th November 2008
+---------------------------------------+--------------------+
| | 2008 |
| | GBP'000s |
+---------------------------------------+--------------------+
| | |
+---------------------------------------+--------------------+
| Investments held at fair value | 42,069 |
| through profit or loss | |
+---------------------------------------+--------------------+
| Net Current Assets | 1,125 |
+---------------------------------------+--------------------+
| Total Net Assets | 43,194 |
+---------------------------------------+--------------------+
| | |
+---------------------------------------+--------------------+
| | |
+---------------------------------------+--------------------+
| Called up Share Capital | 262 |
+---------------------------------------+--------------------+
| Capital Redemption Reserve | 274 |
+---------------------------------------+--------------------+
| Special Reserve | 35,939 |
+---------------------------------------+--------------------+
| Capital Reserve | 4,749 |
+---------------------------------------+--------------------+
| Revenue Reserve | 1,970 |
+---------------------------------------+--------------------+
| | |
+---------------------------------------+--------------------+
| Shareholders' Funds (all equity | 43,194 |
| interests) | |
+---------------------------------------+--------------------+
| | |
+---------------------------------------+--------------------+
| Net asset value per Ordinary Share | 177.4p |
+---------------------------------------+--------------------+
The net asset value is based on 24,342,117 Ordinary Shares in issue at the year
end.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the years ended 30th November 2009 and 30th November 2008
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| | | | | | | |
| | Called | Capital | | | | |
| | up | Redemption | Special | Capital | Revenue | |
| | Share | Reserve | Reserve | | Reserve | Total |
| | Capital | GBP'000s | GBP'000s | Reserve | GBP'000s | GBP'000s |
| | GBP'000s | | | | | |
| | | | | GBP'000s | | |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| Net Assets at 30th | | | | | | |
| November 2007 | 275 | 261 | 39,827 | 25,904 | 1,511 | 67,778 |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| Revenue Return | - | - | - | - | 1,306 | 1,306 |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| Shares repurchased | (13) | 13 | (3,888) | - | - | (3,888) |
| during the year | | | | | | |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| Dividends on | - | - | - | - | (847) | (847) |
| Ordinary Shares | | | | | | |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| Capital Return | - | - | - | (21,155) | - | (21,155) |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
| Net Assets at 30th | 262 | 274 | 35,939 | 4,749 | 1,970 | 43,194 |
| November 2008 | | | | | | |
+----------------------+----------+-----------------------+----------+----------+----------+----------+
+----------------------+-----+--------+---------+--------+---------+---------+
| Net Assets at 30th | 262 | 274 | 35,939 | 4,749 | 1,970 | 43,194 |
| November 2008 | | | | | | |
+----------------------+-----+--------+---------+--------+---------+---------+
| Revenue Return | - | - | - | - | 944 | 944 |
+----------------------+-----+--------+---------+--------+---------+---------+
| Shares repurchased | (4) | 4 | (1,118) | - | - | (1,118) |
| during the year | | | | | | |
+----------------------+-----+--------+---------+--------+---------+---------+
| Dividends on | - | - | - | - | (1,031) | (1,031) |
| Ordinary Shares | | | | | | |
+----------------------+-----+--------+---------+--------+---------+---------+
| Capital Return | - | - | - | 16,104 | - | 16,104 |
+----------------------+-----+--------+---------+--------+---------+---------+
| Net Assets at 30th | 258 | 278 | 34,821 | 20,853 | 1,883 | 58,093 |
| November 2009 | | | | | | |
+----------------------+-----+--------+---------+--------+---------+---------+
CASH FLOW STATEMENT
for the year ended 30th November 2008 and 30th November 2009
+-----------------------------------------------+--------------+---------------+-----------+
| | 2009 | 2009 | 2008 |
+-----------------------------------------------+--------------+---------------+-----------+
| | GBP'000s | GBP'000s | GBP'000s |
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Net cash inflow from operating activities | | 857 | 1,475 |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Return on investment and servicing of finance | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Interest paid | | (3) | (13) |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Capital expenditure and financial investment | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Purchase of fixed asset investments | (63,414) | | (39,903) |
+-----------------------------------------------+--------------+---------------+-----------+
| Sale of fixed asset investments | 61,334 | | 40,324 |
+-----------------------------------------------+--------------+---------------+-----------+
| Net cash (outflow) inflow from capital | | | |
| expenditure and financial investment | | (2,080) | 421 |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Equity dividends paid | | (1,031) | (848) |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Net cash (outflow) inflow before financing | | (2,257) | 1,035 |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Financing | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Purchase of Ordinary Shares for cancellation | (1,118) | | (3,887) |
| and held in treasury | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Drawdown of loan | 2,993 | | - |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Net cash inflow (outflow) from financing | | 1,875 | (3,887) |
+-----------------------------------------------+--------------+---------------+-----------+
| | | | |
+-----------------------------------------------+--------------+---------------+-----------+
| Decrease in cash | | (382) | (2,852) |
+-----------------------------------------------+--------------+---------------+-----------+
EQUITY HOLDINGS as at 30th November 2009
+-------------------------+------------------------+--------+----------+----------------------------+
| | Value | % of | | |
| | | Net | | |
| | GBP'000s | Assets | | Sector |
+-------------------------+------------------------+--------+----------+----------------------------+
| | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Société Générale | 2,962 | 5.0 | | Banks |
| (France) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Eutelsat Communications | 2,945 | 4.9 | | Media |
| (France) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| BNP Paribas (France) | 2,933 | 4.9 | | Banks |
+-------------------------+------------------------+--------+----------+----------------------------+
| ASM International | 2,682 | 4.5 | | Technology Hardware & |
| (Netherlands) | | | | Equipment |
+-------------------------+------------------------+--------+----------+----------------------------+
| Sanofi-Aventis (France) | 2,624 | 4.4 | | Pharmaceuticals & |
| | | | | Biotechnology |
+-------------------------+------------------------+--------+----------+----------------------------+
| Publicis Groupe | 2,605 | 4.3 | | Media |
| (France) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Zurich Financial | 2,559 | 4.3 | | Non Life Insurance |
| Services (Switzerland) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| SES (Luxembourg) | 2,461 | 4.1 | | Media |
+-------------------------+------------------------+--------+----------+----------------------------+
| Telefónica (Spain) | 2,384 | 4.0 | | Fixed Line |
| | | | | Telecommunications |
+-------------------------+------------------------+--------+----------+----------------------------+
| Unicredito Italiano | 2,252 | 3.8 | | Banks |
| (Italy) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Value of ten largest | 26,407 | 44.2 | | % of Total Invested Funds |
| holdings | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Fresenius Medical Care | 2,215 | 3.7 | | Healthcare Equipment & |
| (Germany) | | | | Services |
+-------------------------+------------------------+--------+----------+----------------------------+
| Portugal Telecom | 2,189 | 3.7 | | Fixed Line |
| (Portugal) | | | | Telecommunications |
+-------------------------+------------------------+--------+----------+----------------------------+
| Julius Baer Group | 2,186 | 3.7 | | Financial Services |
| (Switzerland) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| GFK (Germany) | 2,157 | 3.6 | | Support Services |
+-------------------------+------------------------+--------+----------+----------------------------+
| SAP (Germany) | 2,121 | 3.5 | | Software & Computer |
| | | | | Services |
+-------------------------+------------------------+--------+----------+----------------------------+
| Koninklijke DSM | 2,095 | 3.5 | | Chemicals |
| (Netherlands) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Total (France) | 2,039 | 3.4 | | Oil & Gas Producers |
+-------------------------+------------------------+--------+----------+----------------------------+
| Groupe Danone (France) | 2,007 | 3.4 | | Food Producers |
+-------------------------+------------------------+--------+----------+----------------------------+
| BG Group (UK) | 1,996 | 3.3 | | Oil & Gas Producers |
+-------------------------+------------------------+--------+----------+----------------------------+
| Deutsche Börse | 1,985 | 3.3 | | Financial Services |
| (Germany) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| International Personal | 1,906 | 3.2 | | Financial Services |
| Finance (UK) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Sodexo (France) | 1,824 | 3.0 | | Travel & Leisure |
+-------------------------+------------------------+--------+----------+----------------------------+
| Energias de Portugal | 1,727 | 2.9 | | Electricity |
| (Portugal) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Intermediate Capital | 1,521 | 2.5 | | Financial Services |
| Group (UK) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Rhön-Klinikum (Germany) | 1,461 | 2.4 | | Healthcare Equipment & |
| | | | | Services |
+-------------------------+------------------------+--------+----------+----------------------------+
| Saipem (Italy) | 1,191 | 2.0 | | Oil Equipment, Services & |
| | | | | Distribution |
+-------------------------+------------------------+--------+----------+----------------------------+
| Unilever (Netherlands) | 1,169 | 2.0 | | Food Producers |
+-------------------------+------------------------+--------+----------+----------------------------+
| ArcelorMittal | 1,049 | 1.8 | | Industrial Metals & Mining |
| (Luxembourg) | | | | |
+-------------------------+------------------------+--------+----------+----------------------------+
| Ashmore Group (UK) | 564 | 0.9 | | Financial Services |
+-------------------------+------------------------+--------+----------+----------------------------+
| | 59,809 | 100.0 | | % of Total Invested Funds |
+-------------------------+------------------------+--------+----------+----------------------------+
Note A
The financial statements have been prepared under the historical cost
convention, except for the measurement at fair value of investments, and in
accordance with United Kingdom law, United Kingdom Generally Accepted Accounting
Principles (UK GAAP) and the Statement of Recommended Practice - Financial
Statements of Investment Trust Companies and Venture Capital Trusts (SORP)
issued in January 2009 by the Association of Investment Companies.
Note B
The return per Ordinary Share has been calculated using a weighted average
number of Ordinary Shares in issue during the year of 23,922,184 shares (2008 -
24,903,316 shares).
Note C
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 30th November 2009 or 30th
November 2008. The financial information for the year ended 30th November 2008
has been extracted from the statutory accounts for that year, which were filed
with the Registrar of Companies on 17th March 2009. The auditors' report on
those accounts was unqualified, and did not contain a statement under either
section 498(2) or (3) of the Companies Act 2006. The statutory accounts for the
year ended 30th November 2009 will be finalised on the basis of the financial
information presented by the directors in this announcement and will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting.
For further information please contact:
Peter Ingram
Company Secretary
Telephone: 020 7065 1467
This information is provided by RNS
The company news service from the London Stock Exchange
END
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