Interim Results
January 31 2002 - 6:31AM
UK Regulatory
RNS Number:7841Q
Premier High Income Trust PLC
31 January 2002
PREMIER HIGH INCOME TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
David Hankinson, Chairman of the Company, today commented:
In the six months to 31 December 2001, total assets fell in value by 12.2% to
£32,003,000. This compares with a fall of 7.25% in the FTSE 350 index during the
same period.
At the individual share class level and because of the effect of the Company's
geared structure, the net asset value per Ordinary share has fallen to 39.34p
from 65.41p while the net asset value per Zero Dividend Preference share has
risen to 121.85p from 117.22p.
The investment portfolio remains invested broadly in line with the strategy set
out in the original prospectus with some 74% being allocated to UK equities, 17%
to Global Bonds and 9% to other split capital trusts. Within the equity
portfolio, some 65% of the portfolio by value is invested in companies within
the FTSE 100 index, and 31% invested in companies within the FTSE 250 index. The
balance is held in smaller companies and cash.
The investment strategy for the UK equity portfolio of concentrating on "blue
chip" stocks has remained unchanged, with the managers following a disciplined
sector and stock selection process, with an emphasis on maintaining a quality
portfolio that meets the income yield requirement. Over the period, the equity
portfolio managers have under-performed the FTSE 350 index, although this is not
a cause for undue concern, as over the longer term, the managers have performed
slightly ahead of benchmark. Elsewhere the performance of the fixed interest
investments has been in line with expectations.
During the period under review the market for split capital investment trusts
has been extremely difficult with the effects of gearing amplifying the effects
of falling equity markets. As a result, the investment trust portion has fallen
heavily and now represents only 9% of the total assets of the Company. It does
however continue to generate valuable revenue for the Company and is well
diversified across 28 different holdings, none of which represents more than 1%
of total assets.
Looking forward, markets have recovered from their initial losses following the
terrible events of September 11 but it remains to be seen whether further
recovery will be sustained during 2002. It is hoped that the effects of lower
interest rates will feed through to an improvement in the UK economy and that
this in turn will improve the outlook for the UK equity portfolio of the trust.
There has been much comment in the press and elsewhere about a number of
investment trusts that have used bank debt within their structure and are in
breach of their banking covenants. Your trust has some £5.7m of bank debt, which
represents 22% of adjusted net assets. Under the terms of the agreement with JP
Morgan Chase, this ratio must remain below 40% and therefore your Board remains
comfortable with the level of debt within your Company.
In the first six months, your Board declared a dividend of 1.8p in November,
which, taken together with the second dividend of 1.8p brings the total for the
period to 3.6p. Your Board believes that, in the absence of unforeseen
circumstances, the dividend for the current year should be at least equal to
that for the previous year.
The Directors announce the unaudited statement of results for the period 1 July
2001 to 31 December 2001 as follows:
STATEMENT OF TOTAL RETURN
(*incorporating the revenue account) for the period 1 July 2001 to 31 December 2001
Six months to Six months to
31 December 2001 31 December 2000
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Losses)/ gains on investments - (4,184) (4,184) - 1,153 1,153
Exchange gains on capital items - 10 10 - 34 34
Dividends and interest 813 - 813 944 - 944
Other income 25 - 25 (19) - (19)
Investment management fee (40) (118) (158) (45) (132) (177)
Other expenses (75) - (75) (76) - (76)
Net return before
finance costs and taxation 723 (4,292) (3,569) 804 1,055 1,859
Interest payable and similar (41) (122) (163) (50) (151) (201)
charges
Return on ordinary activities
before taxation 682 (4,414) (3,732) 754 904 1,658
Taxation on ordinary activities (54) 54 - (38) 38 -
Return on ordinary activities
after taxation for the period 628 (4,360) (3,732) 716 942 1,658
Appropriations in respect of:
- Zero Dividend Preference shares - (747) (747) - (688) (688)
Return attributable to Ordinary 628 (5,107) (4,479) 716 254 970
shareholders
Dividend in respect of Ordinary (700) - (700) (700) - (700)
shares
Transfer (from)/ to reserves (72) (5,107) (5,179) 16 254 270
Return per: pence pence pence pence pence pence
Ordinary share 3.23 (26.25) (23.02) 3.68 1.31 4.99
Zero Dividend Preference share - 4.85 4.85 - 4.47 4.47
The revenue column of this statement is the revenue account of the Company.
SUMMARISED BALANCE SHEET
As at As at As at
31 December 30 June 31 December
2001 2001 2000
£'000 £'000 £'000
Investments 30,640 33,963 36,264
Net current assets 1,363 2,469 1,339
Total assets less current liabilities 32,003 36,432 37,603
Creditors - amounts falling due after
more than one year (5,654) (5,651) (5,648)
Net assets 26,439 30,781 31,995
Net asset value per:
Ordinary share 39.34p 65.41p 74.84p
Zero Dividend Preference share 121.85p 117.22p 112.83p
STATEMENT OF CASHFLOWS
for the six months ended 31 December 2001
Six months to Six months to
31 December 2001 31 December 2000
£'000 £'000
Net cash inflow from operating activities 739 744
Servicing of finance
Interest paid (161) (198)
Net cash outflow from servicing of finance (161) (198)
Capital expenditure and financial investments
Purchase of investments (7,029) (9,909)
Sale of investments 6,169 11,217
Exchange (losses)/ gains on settlement (9) 14
Exchange gains on forward currency contracts 35 99
Net cash (outflow)/ inflow from capital
expenditure and financial investments (834) 1,421
Equity dividends paid (710) (709)
Net cash (outflow)/ inflow before and after financing (966) 1,258
(Decrease)/ increase in cash (966) 1,258
NOTE
1. The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985.
2. The Directors have declared a second interim dividend of 1.80p(2000: 1.80p)
net per Ordinary share, payable on 28 February 2002 to the holders of Ordinary
shares on the Register at 8 February 2002.
3. The revenue return per Ordinary share is based on earnings of £628,000
(2000: £716,000) and on 19,455,570 (2000: 19,455,570) Ordinary shares in issue
throughout the period.
4. The capital return per Ordinary share is based on net capital losses of
£5,107,000 (2000: gains of £254,000) and on 19,455,570 (2000: 19,455,570)
Ordinary shares in issue throughout the period.
5. An amount of £240,000 (2000: £283,000) 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 £747,000 (2000:
£688,000) 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 121.85p (2000:
112.83p) at 31 December 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
This information is provided by RNS
The company news service from the London Stock Exchange
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