Interim Results
March 04 2004 - 7:36AM
UK Regulatory
RECOVERY TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
CHAIRMAN'S STATEMENT
The Directors present the unaudited results for the period from 1 August 2003
to 31 January 2004.
The Directors have declared a first interim dividend of 1.00p per Ordinary
Income share, payable on 31 March 2004 to the holders of Ordinary Income shares
on the Register at 12 March 2004.
Over the period under review, the net asset value of the Zero Dividend
Preference s hares increased by almost 10%. This compares favourably with the
near 7% increase in the Company's benchmark, the FTSE All-Share Index. However,
despite this, the Zero Dividend Preference s hare entitlement remain s
uncovered. As a consequence, the Net Asset Value (NAV) of the Ordinary Income
shares at the period end was nil other than some small revenue reserves.
The market rally, which began in March 2003, has continued and it is pleasing
to note that prospects for the remaining split capital investment trust
holdings have stabilised.
As previously stated, the Board continue to implement measures aimed at
restoring value for all shareholders. In October 2003, the Company purchased
for cancellation approximately 9% of the outstanding Zero Dividend Preference
shares at a price of 80p per share providing a meaningful uplift in the NAV of
the remaining shares in issue. In addition, in order to take advantage of
rising markets and an improving economic outlook, the Board have agreed terms
for a new �3m overdraft facility with theCompany's Bankers at a rate of
interest payable of 1.25% over LIBOR. The funds were drawn down early in
February.
In keeping with the Company's original Investment Objective the portfolio will
, following the drawdown, be managed to maintain 60% in the Recovery Portfolio
and 40% in the Income Portfolio .
In the absence of unforeseen circumstances , the Board anticipates dividend
payments of at least 2p per Ordinary Income share in respect of the year to 31
July 2004. It is intended that a first interim dividend of 1p will be paid in
March 2004 with a second interim being pa id in September 2004 .
Since the appointment of Montanaro Investment Managers Limited as Manager in
January 2003, the overall performance of the Company has exceeded the benchmark
FTSE All-Share Index by 5%.
SUMMARISED STATEMENT OF TOTAL RETURN
(*incorporating the revenue account) of the Company
1 August 2003 to 1 August 2002 to
31 January 2004 31 January 2003
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains/ (losses) on investments - 1,022 1,022 - (4,192) (4,192)
Dividends and interest 399 - 399 446 - 446
Investment management fees (22) (22) (44) (32) (32) (64)
Other expenses (78) - (78) (110) - (110)
Return on ordinary activities 299 1,000 1,299 304 (4,224) (3,920)
before and after taxation for
the period
Appropriations in respect of
non-equity shares
- Zero Dividend Preference - (716) (716) - (691) (691)
Return attributable to 299 284 583 304 (4,915) (4,611)
Ordinary Income shareholders
1st interim dividend proposed (300) - (300) (225) - (225)
of 1.00p (2003: 0.75p) per
Ordinary Income share
2nd interim dividend of nil p - - - (225) - (225)
(2003: 0.75p) perOrdinary
Income share**
Transfer (from)/ to reserves (1) 284 283 (146) (4,915) (5,061)
Return per share pence pence pence pence pence pence
Ordinary Income 1.00 0.95 1.95 1.01 (16.38) (15.37)
Zero Dividend Preference - 5.45 5.45 - 4.99 4.99
* The revenue column of this statement is the revenue account of the Company.
All revenue and capital items in the above statement derive from continuing
operations.
** As stated in the Annual Report for the year ended 31 July2003, the Company
anticipates paying dividends twice yearly, one in respect of the period ended
31 January 2004 and a second in respect of the period ending 31 July 2004.
Previously it was the Company's policy to pay four quarterly dividends.
SUMMARISED BALANCE SHEET
As at As at As at
31 January 31 July 31 January
2004 2003 2003
�'000 �'000 �'000
(unaudited) (audited) (unaudited)
Investments at valuation 15,349 13,180 11,397
Net current (liabilities)/assets (44) 2,093 1,969
Total assets less current liabilities 15,305 15,273 13,366
Bank loan - - -
Total shareholder funds 15,305 15,273 13,366
Less current period revenue 1 - 146
Total net assets for the purpose of 15,306 15,273 13,512
calculating the net asset value per
share
Net asset value per:* pence pence pence
Ordinary Income share** 0.00 0.00 0.00
Zero Dividend Preference share*** 121.05 110.32 95.43
* The net asset values per share reflect the entitlements of shareholders as
set out in the Articles of Association.
** The net asset value announced for the Ordinary Income shares is 0.00p with
accrued income attributable of 0.04p (31 July 2003: 0.04p, 31 January 2003:
1.03p). This has been calculated in accordance with entitlements as at 31
January 2004, and the Company's Articles of Association.
*** On 14 October 2003 the Company repurchased for cancellation 1,200,000 Zero
Dividend Preference shares at a price of 80p per share.
SUMMARISED STATEMENT OF CASHFLOWS
1 August 2003 1 August 2002 to
to
31 January 31 January 2003
2004
�'000 �'000
Net cash inflow from operating activities 211 327
Capital expenditure and financial investment
Purchase of investments (4,489) (4,071)
Sale of investments 3,127 5,480
Net cash (outflow)/inflow from capital (1,362) 1,409
expenditure and financial investments
Equity dividends paid (180) (450)
Net cash (outflow)/inflow before financing (1,331) 1,286
Financing
Zero Dividend Preference share repurchase (967) -
(Decrease)/ increase in cash (2,298) 1,286
The above financial information has been prepared using the accounting policies
set out in the statutory accounts for the year to 31 July 2003, save that the
Company has adopted the 2003 Statement of Recommended Practice regarding the
Financial Statements of Investment Trust Companies.
NOTES
1. The above financial information does not constitute statutory financial
statements as defined in section 240 of the Companies Act 1985. The statutory
accounts for the year to 31 July 2003, which contained an unqualified auditors'
report, have been lodged with the Registrar of Companies and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
2. The Directors have declared a first interim dividend of 1.00p per Ordinary
Incomeshare, payable on 31 March 2004 to the holders of Ordinary Income shares
on the Register at 12 March 2004.
3. The revenue return per Ordinary Income share is based on earnings of �
299,000 (2003: �304,000) and on 30,000,000 Ordinary Income shares in issue
throughout the period.
4. The capital return per Ordinary Income share is based on net capital gains
of �284,000 (2003: losses of �4,915,000) and on 30,000,000 Ordinary Income
shares in issue throughout the period.
5. There are currently 12,635,000 Zero Dividend Preference shares in issue. The
Zero Dividend Preference shareholders are entitled to receive 167.74p per share
on 15 August 2007. In accordance with Financial Reporting Standard No: 4, the
accrued compound growth entitlement of �716,000 (2003: �691,000) which takes
into account the allocation of share issue expenses to the Zero Dividend
Preference shareholders, has been charged against the capital reserve. The
appropriation is used to calculate the capital return per Zero Dividend
Preference share.
6. An amount of �22,000 (2003: �32,000) has been charged to capital in respect
of management fees, other expenses and interest in accordance with accounting
policy.
7. The Company operates as an investment trust and has been approved by the
Inland Revenue as an authorised investment trust under Section 842 of the
Income and Corporation Taxes Act 1988 for the period ended 31 July 2002. In the
opinion of the Directors the Company has subsequently conducted its affairs so
as to enable it to continue such approval. The Company will continue to seek
approval under Section 842 of the Income & Corporation Taxes Act 1988 each
year.
END
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