Final Results
August 09 2001 - 8:40AM
UK Regulatory
RNS Number:2804I
Premier High Income Trust PLC
9 August 2001
PREMIER HIGH INCOME TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
David Hankinson, Chairman of the Company, today commented:
The last twelve months have undoubtedly been difficult ones for equity
investors and it is against this backdrop that I am able to report a small
fall in the Gross Assets less current liabilities of the Company. Given the
difficult environment, your Board is encouraged in the performance at the
Gross Asset level. Due to the gearing afforded by both the Zero Dividend
Preference shares and the bank debt, this does translate into a fall in the
Net Asset Value of the Ordinary shares of 10.9%.
During the period under review investors in UK equities have seen the major
indices fall by approximately 10%. However, this average number masks the fact
that shares in the technology, media and telecommunications sectors have
fallen far more heavily. Fortunately, your company has avoided the worst of
these falls having maintained a heavily underweight stance to these areas
throughout the year.
I am pleased to report that the equity portfolio of your company was able to
out-perform the major UK equity indices during the course of the year having
risen by just over 3%. This recoups the under-performance against the index
from last year and I am hopeful that this trend can continue.
Unfortunately, this small rise in the equity portfolio was offset by falls in
the split capital portfolio. This sector experienced a large sell off during
the course of the year as the gearing effect magnified the falls in the
underlying equity markets in which these shares invest. As a result, the main
index of geared ordinary shares fell by some 26.6% during the year. This fall
was largely reflected in the portfolio of split capital shares held within
your company. The minority exposure (13%) in split capital investment trusts
has ensured that your Company has not suffered as much as others in this
sector.
Elsewhere in the portfolio, performance for the Global Bond investments has
been satisfactory with a rise of 9.9% on a total return basis. During the same
period the JP Morgan British Government Bond Index rose by 3.17% and the
Merrill Lynch Sterling Corporates Index rose by 9.40%.
Notwithstanding the difficult environment on the capital side of the account,
I am once again pleased to report that the income account has fared well. This
has meant that your company has been able to declare a final dividend of 1.85p
making a total of 7.25p for the period under review. In addition, positive
flows on the income side have meant that your board has been able to transfer
a further #235,000 to reserves for the current year, bringing the total in
revenue reserves to #462,000 thereby providing a sound base for future
dividend prospects.
Looking forward, it is to be hoped that the recent round of interest rate cuts
in both the US and the UK will have the desired effect of stimulating the
economies of both these countries. Eventually this should lead to an improving
outlook for the corporate sector. Your Board believes, therefore, that the
portfolio managers have every prospect of making progress over the coming
months and years.
The Directors announce the unaudited statement of results for the year
1 July 2000 to 30 June 2001 as follows:
STATEMENT OF TOTAL RETURN
(*incorporating the revenue account)
1 July 2000 to 12 March 1999 to
30 June 2001 30 June 2000
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Losses on investments - (111) (111) - (2,319) (2,319)
Foreign exchange gains/ (losses) - 103 103 - (94) (94)
on capital items
Dividends and interest 2,032 - 2,032 2,041 - 2,041
Other income 40 - 40 77 - 77
Investment management fee (88) (263) (351) (92) (275) (367)
Other expenses (136) - (136) (174) - (174)
Net return before
finance costs and taxation 1,848 (271) 1,577 1,852 (2,688) (836)
Interest payable and similar (96) (287) (383) (99) (298) (397)
charges
Return on ordinary activities
before taxation 1,752 (558) 1,194 1,753 (2,986) (1,233)
Taxation on ordinary activities (107) 107 - (116) 116 -
Return on ordinary activities
after taxation for the period 1,645 (451) 1,194 1,637 (2,870) (1,233)
Appropriations in respect of:
- Zero Dividend Preference shares - (1,393)(1,393) - (1,365) (1,365)
Return attributable to Ordinary 1,645 (1,844) (199) 1,637 (4,235) (2,598)
shareholders
First interim dividend paid of (350) - (350) (350) - (350)
1.80p (2000: 1.80p)
Second interim dividend paid of (350) - (350) (350) - (350)
1.80p (2000: 1.80p)
Third interim dividend paid of (350) - (350) (350) - (350)
1.80p (2000: 1.80p)
Fourth interim dividend proposed (360) - (360) (360) - (360)
of 1.85p (2000: 1.85p)
Transfer to/ (from) reserves 235 (1,844)(1,609) 227 (4,235) (4,008)
Return per: pence pence pence pence pence Pence
Ordinary share 8.46 (9.48) (1.02) 8.42 (21.77)(13.35)
Zero Dividend Preference share - 9.04 9.04 - 8.86 8.86
BALANCE SHEET
As at As at
30 June 30 June
2001 2000
#'000 #'000
Investments 33,963 36,196
Net current assets 2,469 446
Total assets less current liabilities 36,432 36,642
Creditors - amounts falling due after
more than one year (5,651) (5,645)
Net assets 30,781 30,997
Net asset value per:
Ordinary share 65.41p 73.39p
Zero Dividend Preference share 117.22p 108.54p
CONSOLIDATED STATEMENT OF CASHFLOWS
1 July 2000 to 12 March 1999 to
30 June 2001 30 June 2000
#'000 #'000
Net cash inflow from operating activities 1,564 1,215
Servicing of finance
Interest paid (377) (390)
Issue costs of long-term loan - (36)
Net cash outflow from servicing of finance (377) (426)
Capital expenditure and financial investments
Purchase of investments (20,151) (61,435)
Sale of investments 22,375 22,818
Exchange gains on settlement 5 28
Exchange losses on forward currency contracts (12) (101)
Net cash inflow/ (outflow) from capital
expenditure and financial investments 2,217 (38,690)
Equity dividends paid (1,411) (1,050)
Net cash inflow/ (outflow) before financing 1,993 (38,951)
Financing
Gross proceeds of share issue - 34,858
Expenses of share issue - (1,218)
Long-term loan - 5,674
Net cash inflow from financing - 39,314
Increase in cash 1,993 363
NOTE
1. The unaudited financial information does not constitute statutory accounts
as defined in section 240 of the Companies Act 1985. Statutory accounts for
the period ended 30 June 2000 have been delivered to the Registrar of
Companies. The Auditors have reported on those accounts; their report was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985. The statement of total return, summarised balance sheet
and statement of cashflows have been prepared using the accounting standards
and policies adopted at 30 June 2000. Statutory accounts for the year ended
30 June 2001 have not yet been approved, audited or filed with the Registrar
of Companies.
2. The Directors have declared a fourth interim dividend of 1.85p(2000:
1.85p) net per Ordinary share, payable on 31 August 2001 to the holders of
Ordinary shares on the Register at 17 August 2001. The Directors do not
recommend the payment of a final dividend.
3. The revenue return per Ordinary share is based on earnings of #1,645,000
(2000: #1,637,000) and on 19,455,570 (2000: 19,455,570) Ordinary shares in
issue throughout the year.
4. The capital return per Ordinary share is based on net capital losses of
#1,844,000 (2000: #4,235,000) and on 19,455,570 (2000: 19,455,570) Ordinary
shares in issue throughout the year.
5. An amount of #550,000 (2000: #573,000) has been charged to capital in
respect of management fees, other expenses and interest in accordance with
accounting policy.
6. It is the intention of the Directors to conduct the affairs of the Company
so that it satisfies the conditions for approval as an investment trust
company set out on Section 842 of the Income and Corporation Taxes Act 1988.
7. There are 15,402,326 (2000: 15,402,326) Zero Dividend Preference shares in
issue. The Zero Dividend Preference shareholders are entitled to receive
159.44p per share on 30 June 2005. In accordance with Financial Reporting
Standard No: 4, the accrued compound growth entitlement of #1,393,000 (2000:
#1,365,000) which takes into account the allocation of share issue expenses to
the Zero Dividend Preference shareholders, has been charged against the
capital reserve.
The net asset value per Zero Dividend Preference share of 117.22p (2000:
108.54p) at 30 June 2001 has been calculated in accordance with the Articles
of Association.
For further information, please contact:
Mike O'Shea,
Premier Fund Managers Limited - 01483 306090
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