We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register to chat with like-minded investors on our interactive forums.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Establishment Investment Trust Plc | LSE:ET. | London | Ordinary Share | GB0031336919 | ORD 25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 217.00 | 212.00 | 222.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMET.
RNS Number : 2850P
Establishment Inv. Trust PLC (The)
04 June 2015
THE ESTABLISHMENT INVESTMENT TRUST PLC
Announcement of Financial Results for the year ended 31 March 2015
Objective of the Company
The investment objective of the Company is to achieve long-term capital growth from a managed international portfolio of securities. The preservation of capital is of primary importance to the investment objective.
The Company aims to achieve absolute returns and is not managed by reference to any equity or bond index or benchmark.
Investment Policy
-- To invest primarily in equities issued by companies listed on regulated markets. With the prior approval of the Board, the Company may invest in unlisted securities.
-- Up to 30% of net assets may be invested in investment products managed by the Company's Investment Manager. The Company may also hold positions in investment products managed by third parties.
-- Up to a maximum of 15% of net assets (at cost at the date of investment) may be invested in any one security.
-- The Company may borrow up to a maximum of 50% of net assets.
Financial Highlights for the Year
Performance comparisons 31 March 2014 - 31 March 2015
Hot Features
Premium
31 March 31 March
2014 2015 Change
Share price 171.0p 178.0p 4.1%
Net asset value per share 206.4p 229.6p 11.2%
Dividends per share 4.7p 4.9p 4.3%
FTSE WMA Stock Market Balanced
Index * 12.0%
MSCI UK Equity * 6.1%
MSCI AC World Equity * 18.5%
MSCI Japan Equity* 25.9%
MSCI AC Asia ex Japan Equity
* 24.4%
* Total return in Sterling
Chairman's Statement
I am pleased to present the Annual Report and Accounts for the year ended 31 March 2015.
The share price and net asset value ("NAV") total returns for the financial year were 6.9% and 13.6% respectively after payment of 4.7p per share in dividends.
The environment for your company's investments has been impacted by uncertainties surrounding growth in China and Japan alongside the adoption of quantitative easing in the Eurozone and the exit from quantitative easing in the US. Fluctuating exchange rates that have surrounded these uncertainties have also had their impact. In view of this, your Board agreed with your Manager that it was inappropriate to hold gold bullion and cash reserves which earned very little income, at approaching 25% of net asset value. We have achieved a substantial increase in dividend income as a result, which will help to underpin our progressive dividend policy.
As reported at the half year, Blackfriars Asset Management Limited ("Blackfriars") was appointed as investment manager to the Company on 15 July 2014 and the appointment of BDT Invest LLP was terminated at that time. Henry Thornton has transferred to Blackfriars and continues to have primary responsibility as the Company's portfolio manager. No fees were payable to BDT Invest LLP beyond those due up to the effective date of the appointment of Blackfriars. The fees payable to Blackfriars are calculated on the same basis as under the agreement with BDT Invest LLP save that the performance fee provisions have been removed. The Company has realised its investment in BDT Invest LLP which has entered into voluntary liquidation.
After 13 years on the Board, I have decided that I will retire as Chairman and a Director at the conclusion of the forthcoming Annual General Meeting and Harry Wells has been selected by the Board to be my successor. I am sure Harry's extensive experience of investment markets, particularly in Asia, will serve the Company well. There have been a number of other changes to the Board of Directors. During the year, Henry Thornton retired as a Director of the Company. Susan Thornton was appointed to the Board following the last Annual General Meeting. The Board has appointed Jim Ryall as a Director with effect from 2 June 2015. Both will offer themselves for election at the forthcoming AGM. Jim is a seasoned City professional with 29 years' experience of financial markets.
Your Board proposes an increased final dividend of 3.0p making the total dividend for the financial year 4.9p, a 4.3% increase over the previous year. The dividend will be partially funded out of revenue reserves brought forward from previous years.
Markets across the world are having to adjust to an uncertain recovery and substantial geo-political risks. More subdued but continuing growth still predominates in the ASEAN region which is where your Manager will concentrate its efforts to seek improved performance.
The Board is very aware of the wide discount prevailing in the Company's share price relative to its NAV. I hope that improved performance in future will result in a narrowing of the discount.
Sir David Cooksey GBE
Chairman
4 June 2015
Investment Manager's Report
During the second half of the financial year the share price declined by 2.5% while the net asset value rose 4.0%. An interim dividend of 1.9p was paid to shareholders during the period thus improving the net asset value total return by 4.8% although the share price total return still declined by 1.4%. This compares to the 8.0% increase in the FTSE WMA Stock Market Balanced Portfolio Index in sterling terms.
For the financial year as a whole the share price rose by 4.1% and the net asset value advanced by 11.2%. Including dividends of 4.7p paid during the year the total returns of the share price and net asset value were 6.9% and 13.6% respectively. For comparative purposes the FTSE WMA Stock Market Balanced Index rose 12.0%, the FTSE 100 gained 6.7%, the MSCI AC World Index gained 18.5%, the MSCI Japan Index climbed 25.9% while the MSCI AC Asia ex Japan Index advanced 24.4%. The discount stood at 22.4% at year end.
Longer term performance is shown graphically in the chart on page 3 of the Annual Report. This tracks the net asset value and share price against the FTSE WMA Stock Market Balanced Portfolio Index since the formation of the Company.
Dividends & UK Equities
As described in the interim report to Shareholders the Company disposed of the position in Gold Bullion Securities last November. This left the Company with a liquidity position approaching 25% earning virtually zero income.
Your Manager agreed with your Board that a sensible course of action would be to deploy much of this liquidity into half a dozen large, solid, UK listed blue chips. While this has increased the risk profile of the portfolio somewhat, due to the increased exposure to equities, the equities selected have a running yield of nearly 4.0%. This has had a significant impact on the income account of the Company and has enabled the Board to increase the dividend for the financial year for the twelfth successive year. In an environment where circa one third of Eurozone sovereign bonds are currently sporting a negative yield to maturity your Manager believes that the delivery of consistent dividends to Shareholders remains an important objective.
Deflationary Pressures
Powerful deflationary pressures continue to sweep around the global economy. Likewise while Japan's aggressive QE programme has pushed the Yen lower and boosted the equity market there are few signs of recovery in this demographically challenged economy. While the Federal Reserve has signalled its desire to "normalise" monetary policy, data releases in the United States over the past few months suggest that the economic recovery is flagging. This is unsurprising given the recent strength in the US Dollar and weakness in the shale oil industry following the collapse of crude oil prices.
The regional economies in Asia continue to grow but at a slower pace. With global trade subdued the Asian economies that have been historically highly dependent upon trade, such as Korea, are barely growing while more domestically driven economies, such as the Philippines, continue to generate steady growth.
Significantly China's growth continues to slow rapidly. While first quarter 2015 real GDP growth was reported at 7.0% year on year, nominal GDP rose only 5.8% year on year. Factory gate prices continue to fall precipitously (the producer price index is declining at a near 5% annual rate). The property market is of concern with inventory levels in most Tier 3 and Tier 4 cities standing at around three years demand. Nationwide property transactions and completions declined 10% y-o-y in the first quarter while new starts fell by 21% y-o-y.
The People's Bank of China has reacted by easing monetary policy repeatedly over the past six months (both by cutting interest rates and by reducing the Reserve Ratio Requirement) and is likely to continue to ease over the course of 2015. Easier monetary policy, plus the prospect of State Owned Enterprise reform, has sparked life into the domestic equity markets (which are dominated by retail investors) and more recently this excitement has spilled over into the H shares listed in Hong Kong. The good news is that employment levels remain stable as the rapid growth in the service sector continues. This offsets the slowdown in the industrial sector and leaves your Manager with a positive outlook for consumption. Your Company's investments in China remain focused on the consumer sector.
Elsewhere we continue to favour consumer stocks in India and property and infrastructure companies across ASEAN. Your Manager believes these investments will generate competitive returns over time.
Sir David Cooksey stands down as Chairman at this year's AGM. Your investment managers would like to place on record their appreciation and gratitude for Sir David's support and encouragement over the past thirteen years and to wish him well in his other activities.
Financial Results
The portfolio generated gross income of GBP1,080,000 during the year, an increase of 31% from the GBP827,000 generated in the preceding year. The total charge for investment management fees was GBP295,000 (of which 80% was charged to capital) and other expenses amounted to GBP272,000. The Company's revenue return on ordinary activities after tax was GBP670,000 for the year, an increase from GBP461,000 in the previous year.
Blackfriars Asset Management Limited
Investment Manager
4 June 2015
Other Information
Results and dividend
The revenue return for the financial year ended 31 March 2015 after taxation amounted to GBP670,000 (2014: GBP461,000). A final dividend of 3.0p (2014: 2.80p) is proposed in respect of the year ended 31 March 2015. The dividend, subject to approval by Shareholders, will be paid on 3 August 2015 to Shareholders whose names appear on the register at the close of business on 10 July 2015 (ex-dividend 9 July 2015).
An interim dividend of 1.9p per Ordinary Share was paid on 22 December 2014 to Shareholders on the register at the close of business on 5 December 2014 (ex-dividend 4 December 2014).
The Company made a capital gain after tax for the financial year ended 31 March 2015 of GBP4,908,000 (2014: capital loss of GBP10,112,000). Therefore the total return after tax for the Company for the financial year ended 31 March 2015 was GBP5,578,000 (2014: loss of GBP9,651,000).
Risks and uncertainties
The review of the year and commentary on the future outlook are presented in the Chairman's Statement on page 4, the Investment Manager's Report on page 8 and the financial instruments disclosures set out in note 17 to the Financial Statements on pages 48 to 52 of the Annual Report, which, together with the information below, provide details of the principal risks and uncertainties facing the Company.
Investment risk
The Company is predominantly a vehicle for overseas equity investment with the attendant risks applicable to any international or regional equity portfolio relating to strategy, country, industrial sector and stock selection.
The prime risk of investing in the Company is a fall in equity prices and adverse movements in foreign currency exchange rates as currency movements can have a significant impact on capital values. Whilst foreign currency exposures against Sterling are reviewed on a regular basis, these are inherent in investing in overseas securities and at present the Company has no currency hedging contracts in place nor plans to arrange them. The Investment Manager will take into account the possibility of currency gain or loss when evaluating investments for the Company.
Counterparty risk
Counterparty credit risk is not considered to be significant since the Investment Manager undertakes transactions only with brokers pre-approved by the Manager and on the basis of delivery against payment. However, the Company bears the risk of settlement default by clearing houses and exchanges and the risk of delayed repossession or disputed title of the Company's assets in the event of failure of the Custodian, together with operational and regulatory risks, and the risk of errors and omissions.
Role of the Board
The Board monitors the critical risks and uncertainties faced by the Company through regular review of a matrix of risks, key controls and mitigating factors.
As part of the review of operational risks, the Board satisfies itself that the Investment Manager has processes in place to ensure that limits are not breached. Performance and risk controls are the focus of Boardroom discussion with the Investment Manager. The Board reviews the management of the portfolio and monitors the Manager's adherence to the investment mandate. This is achieved by comparing the absolute return generated by the portfolio, the breakdown of the portfolio into equities, investment funds, bonds, commodities and cash and the level of concentration within the equity portfolio by sector and geography.
The Board seeks to assess and contain risk by understanding and monitoring the Investment Manager's investment style, investment process and long-term performance record. Stock specific risk is reduced through adequate diversification and the Investment Manager is required to ask the Board for approval prior to the purchase of any other products managed by the Investment Manager which are anyway limited to 30% of the portfolio.
The Board reviews the performance of certain equity indices to evaluate further whether the Investment Manager is generating competitive returns in differing market conditions. In assessing performance, the Board in its regular meetings looks for a clear, consistent expression of strategy.
As the Company's objective is to achieve long-term capital growth whilst preserving capital, performance is not measured against any specific equity or bond index but on the absolute return achieved. The Company shows its performance against the FTSE WMA Stock Market Balanced Index in the chart on page 3 of the Annual Report.
The Board also discusses the extent to which the Company should gear its balance sheet or indeed raise liquidity in difficult markets. Strategic decisions, such as the level of borrowing, can have a significant impact on performance. The Company's policy is to limit gearing to a maximum of 50% of net assets, but currently no gearing of the Company's portfolio has been implemented. Ultimately, the positioning of the portfolio is decided by the Investment Manager, which operates within the investment guidelines established by the Board.
Income Statement
for the year ended 31 March
2015 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on investments - 4,599 4,599 - (9,265) (9,265)
Exchange gains/(losses)
on
currency balances - 545 545 - (578) (578)
Income 1,080 - 1,080 827 - 827
Investment management
fees (59) (236) (295) (67) (269) (336)
Other expenses (272) - (272) (241) - (241)
Return on ordinary
activities
before tax 749 4,908 5,657 519 (10,112) (9,593)
Tax on ordinary activities (79) - (79) (58) - (58)
Return on ordinary
activities
after tax for the financial
year 670 4,908 5,578 461 (10,112) (9,651)
Return per Ordinary
Share 3.35p 24.54p 27.89p 2.31p (50.56)p (48.25)p
------------------------------- ------- ------- ------- ------- -------- --------
All revenue and capital items in the above statement derive from continuing operations.
The total columns in this statement represent the profit and loss accounts of the Company. The revenue and capital columns are supplementary to this and are prepared under the guidance published by the Association of Investment Companies.
A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 March 2015
Share Share Capital Revenue
capital premium reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- -------- -------- --------
At 31 March 2014 5,000 14,701 20,555 1,030 41,286
Return on ordinary activities
after
tax for the financial
year - - 4,908 670 5,578
Dividends paid - - - (940) (940)
------------------------------- -------- -------- -------- -------- --------
At 31 March 2015 5,000 14,701 25,463 760 45,924
------------------------------- -------- -------- -------- -------- --------
For the year ended 31 March 2014
Share Share Capital Revenue
capital premium reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- -------- -------- --------- -------- --------
At 31 March 2013 5,000 14,701 30,667 1,509 51,877
Return on ordinary activities
after
tax for the financial
year - - (10,112) 461 (9,651)
Dividends paid - - - (940) (940)
------------------------------- -------- -------- --------- -------- --------
At 31 March 2014 5,000 14,701 20,555 1,030 41,286
------------------------------- -------- -------- --------- -------- --------
Balance Sheet
at 31 March
2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- -------- -------- --------
Fixed assets
Investments held at fair value
through profit or loss 42,311 35,337
Current assets
Debtors 1,080 182
Cash at bank 3,086 5,871
------------------------------------- -------- -------- -------- --------
4,166 6,053
Creditors: amounts falling due
within one year (553) (104)
------------------------------------- -------- -------- -------- --------
Net current assets 3,613 5,949
Net assets 45,924 41,286
------------------------------------- -------- -------- -------- --------
Capital and reserves
Called up share capital 5,000 5,000
Share premium 14,701 14,701
------------------------------------- -------- -------- -------- --------
19,701 19,701
Capital reserve 25,463 20,555
Revenue reserve 760 1,030
------------------------------------- -------- -------- -------- --------
Equity shareholders' funds 45,924 41,286
------------------------------------- -------- -------- -------- --------
Net asset value per Ordinary Share 229.62p 206.43p
Cash Flow Statement
for the year ended 31 March
2015 2014
GBP'000 GBP'000
--------------------------------------------- -------- --------
Net cash flow from operating activities 370 332
Taxation 71 (37)
Financial investment (2,816) 1,984
---------------------------------------------- -------- --------
Net cash (outflow)/inflow before financing (2,375) 2,279
Equity dividends paid (940) (940)
---------------------------------------------- -------- --------
(Decrease)/increase in cash in the year (3,315) 1,339
---------------------------------------------- -------- --------
Reconciliation of net cash flow to movement
in net funds
(Decrease)/increase in cash in year (3,315) 1,339
Foreign exchange movements 530 (561)
Opening net funds 5,871 5,093
---------------------------------------------- -------- --------
Closing net funds 3,086 5,871
---------------------------------------------- -------- --------
Notes
1. Accounting policies
A summary of the principal accounting policies, all of which have been applied consistently throughout the year is set out below:
(a) Basis of accounting
The accounts are prepared on the historical cost basis of accounting, except for the measurement at fair value of investments. The accounts have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) and with the AIC Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' dated January 2009. All of the Company's operations are of a continuing nature.
(b) Valuation of investments
When a purchase or sale is made under a contract, the terms of which require delivery within the time frame of the relevant market, the investments concerned are recognised or derecognised on the trade date.
The Company's investments have been designated at fair value through profit or loss, and are recognised on the trade date and are initially measured at fair value. Investments are measured at subsequent reporting dates at fair value, and changes in fair value are included in the Income Statement as a capital item. Investments are designated at fair value through profit or loss as they are managed in accordance with a documented investment strategy and their performance is evaluated on a fair value basis by the Board of Directors. For listed investments, fair value is deemed to be either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted.
Unquoted investments are valued by the Directors at fair value. The Company held no unquoted investments at the year end.
(c) Reporting currency
The accounts are presented in Sterling which is the functional currency of the Company. Sterling is the reference currency for this UK registered and listed company.
(d) Income
Dividends are credited to the revenue account on an ex-dividend basis or, if later, as soon as entitlement has been established. The Company owns no fixed interest investments. The fixed return on a debt security would be recognised and accrued on a time apportionment basis so as to reflect the effective interest rate on the debt security.
Bank and deposit interest is accounted for on an accruals basis.
(e) Dividends
Dividends paid by the Company are recognised in the Financial Statements in respect of the period in which they are paid.
(f) Expenses
All expenses are accounted for on an accruals basis. Expenses are recognised through the Income Statement as revenue items except as follows:
- the investment management fee has been allocated 80% to capital reserve and 20% to the revenue account within the Income Statement reflecting the Board's expected long-term split of returns in the form of capital gains and income respectively from the investment portfolio;
- any investment management performance fees are allocated to the capital reserve within the
Income Statement;
- expenses which are incidental to the sale of an investment are deducted from the proceeds of the sale of that investment;
- any other expenses incurred in connection with the acquisition or disposal of an investment are allocated to capital reserve - within the Income Statement;
- finance costs are accounted for on an accruals basis using the effective interest method; and
- finance costs of debt in so far as they relate to the financing of the Company's investments have been allocated 80% to the capital reserve and 20% to the revenue account within the Income Statement. This allocation is in line with the Board's expected long-term split of returns in the form of capital gains and income respectively from the investment portfolio.
(g) Taxation
Deferred taxation is provided on all differences which have originated but not reversed by the balance sheet date, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in the future against which the deferred tax asset can be offset. Deferred tax assets and liabilities are not discounted to reflect the time value of money.
(h) Foreign currency
Transactions and investment income denominated in foreign currencies are recorded in Sterling at actual exchange rates at the date of the transaction or receipt. Monetary assets and liabilities denominated in foreign currencies at the year end are recorded in Sterling at the rates of exchange prevailing at the year end. Any gain or loss arising from a change in exchange rates, subsequent to the date of the transaction, is included as an exchange gain or loss in the capital or revenue column of the Income Statement, depending on whether the gain or loss is of a capital or revenue nature respectively.
The value of investments in foreign currencies is expressed in Sterling at the rates of exchange prevailing at the year end. Surpluses and deficits arising from conversion at this rate of exchange are included as an exchange gain or loss in the capital column of the Income Statement and taken to the capital reserve.
(i) Capital reserve
The following are taken to this reserve:
Investment holding gains:
- Increase and decrease in the valuation of investments held at the year end
Other:
- Gains and losses on the disposal of investments;
- Exchange differences of a capital nature;
- Expenses, together with the related taxation effect, allocated to this reserve in accordance with the above policies.
(j) Distributable reserves
Distributable reserves comprise revenue reserves and the capital reserve.
(k) Going concern
The Financial Statements have been prepared on a going concern basis. The following is a summary of the Board's assessment of the going concern status of the Company:
The majority of the net assets of the Company are securities which are traded on recognised stock exchanges. After considering the Company's current financial resources, the Directors are satisfied that its resources are adequate for continuing in business for the foreseeable future.
2. Income
2015 2014
GBP'000 GBP'000
------------------------- -------- --------
Income from investments
Overseas dividends 925 814
UK dividends 155 13
------------------------- -------- --------
1,080 827
------------------------- -------- --------
3. Investment management fees
2015 2014
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- -------- -------- -------- --------
Investment management
fees 71 283 354 78 313 391
Rebate of investment
management fees (12) (47) (59) (11) (44) (55)
----------------------- -------- -------- -------- -------- -------- --------
59 236 295 67 269 336
----------------------- -------- -------- -------- -------- -------- --------
For the avoidance of double charging investment management fees, the Investment Manager has agreed to rebate any periodic management fee that it receives from the Company by the amount of fees receivable by it from Blackfriars Asset Management Limited products ("Blackfriars products") in respect of the Company's investments in those funds. The Investment Manager has agreed that any performance fees that it earns from Blackfriars products in respect of the Company's investment in those funds will be rebated to the Company. Similar arrangements were in place when the Company's Investment Manager was BDT Invest LLP.
As at 31 March 2015 the Company had investments in the following Blackfriars products:
400,000 shares in Blackfriars Oriental Focus Fund 'B' (formerly BDT Invest Oriental Focus Fund 'B') at a total cost of GBP4,786,000 and a valuation at 31 March 2015 of GBP6,521,000.
The rebate on the investment management fees shown in the above table all relates to the Company's investment in Blackfriars Oriental Focus Fund 'B'.
Details of the investment management agreement are disclosed in the Annual Report.
4. Other expenses
2015 2014
GBP'000 GBP'000
------------------------------------ -------- --------
Administration fees 60 62
Directors' emoluments (see note 5) 68 68
Auditor's remuneration for:
- audit of the Company's accounts 23 19
- taxation compliance services 6 6
Overseas tax compliance services* 14 9
Custodian fees 23 23
Legal fees 9 4
Other expenses 69 50
------------------------------------ -------- --------
272 241
------------------------------------ -------- --------
* These services are not provided by the Company's Auditor.
5. Dividends
(i) Paid during the financial year
2015 2014
GBP'000 GBP'000
-------------------------------------------- -------- --------
Final dividend for the year ended 31 March
2014
of 2.80p per Ordinary Share (2014: 2.80p) 560 560
Interim dividend for the year ended 31
March 2015
of 1.90p per Ordinary Share 380 380
-------------------------------------------- -------- --------
940 940
-------------------------------------------- -------- --------
(ii) Payable during the financial year
The total dividends payable in respect of the year, which forms the basis of section 1159 of the Corporation Tax Act 2010 are set out below:
2015 2014
GBP'000 GBP'000
-------------------------------------------- -------- --------
Interim dividend for the year ended 31
March 2015
of 1.90p per Ordinary Share (2014: 1.90p) 380 380
Proposed final dividend for the year ended
31 March 2015
of 3.00p per Ordinary Share (2014: 2.80p) 600 560
-------------------------------------------- -------- --------
980 940
-------------------------------------------- -------- --------
6. Return per Ordinary Share
2015 2014
--------------------- ----------- ------------- ------------- ----------- ---------------- ---------------
Revenue Capital Total Revenue Capital Total
Return on ordinary
activities
after tax GBP670,000 GBP4,908,000 GBP5,578,000 GBP461,000 GBP(10,112,000) GBP(9,651,000)
Weighted average
number
of shares in issue 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000
--------------------- ----------- ------------- ------------- ----------- ---------------- ---------------
Return per Ordinary
Share 3.35p 24.54p 27.89p 2.31p (50.56)p (48.25)p
--------------------- ----------- ------------- ------------- ----------- ---------------- ---------------
7. Net asset value per share
The net asset value per Ordinary Share and the net asset value at the year end were as follows:
Net asset value per share Net asset value
2015 2014 2015 2014
pence pence GBP'000 GBP'000
229.62 206.43 45,924 41,286
------------- ------------ -------- -------
8. Financial instruments and capital disclosures
Risk management policies and procedures
The investment objective of the Company is to achieve long-term capital growth from a managed international portfolio of securities. The preservation of capital is of primary importance to the investment objective. In pursuit of this objective, the Company may be exposed to various forms of risk, as described below.
The Board has policies on diversification of investment, gearing (bank borrowing), dividends and risk management, which it reviews in accordance with prevailing market conditions. Current policies are set out as part of the Strategic Report in the Annual Report. The Company's assets are managed so as to diversify both the market risk (including price risk) and liquidity risk that occurs in any equity portfolio and the Board monitors this process (see Strategic Report).
Neither interest rate risk nor currency risk are considered as separate risks for the reasons explained in that Review. The Board and its Investment Manager consider and review the number of risks inherent with managing the Company's assets which are detailed overleaf.
Currency exposure at 31 March 2015
US HK Thai Indian Malay Taiwan Japanese
Sterling Dollar Dollar Baht Rupee Ringgit Dollar Yen Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Debtors 229 - - - - - - 851 - 1,080
Cash at bank 41 2,046 - - - - 985 - 14 3,086
Creditors (85) - - - - - - (468) - (553)
Foreign currency
exposure
on net monetary
items 185 2,046 - - - - 985 383 14 3,613
Equities held
at fair value
through profit
or loss 8,134 6,521 4,393 4,200 3,896 3,416 2,411 2,887 6,453 42,311
------------------ -------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Total net foreign
currency
exposure 8,319 8,567 4,393 4,200 3,896 3,416 3,396 3,270 6,467 45,924
------------------ -------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Currency exposure at 31 March 2014
US HK Thai Malay Indian Philippine Taiwan
Sterling Dollar Dollar Baht Ringgit Rupee Peso Dollar Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Debtors 4 - - - 25 - - - 153 182
Cash at bank 48 4,831 - - - - - 992 - 5,871
Creditors (104) - - - - - - - - (104)
Foreign currency
exposure
on net monetary
items (52) 4,831 - - 25 - - 992 153 5,949
Equities held at
fair value
through profit
or loss 985 13,311 5,155 3,380 3,267 2,946 2,864 1,836 1,593 35,337
------------------ -------- ------- ------- ------- ------- ------- ---------- ------- ------- -------
Total net foreign
currency
exposure 933 18,142 5,155 3,380 3,292 2,946 2,864 2,828 1,746 41,286
------------------ -------- ------- ------- ------- ------- ------- ---------- ------- ------- -------
Over the year Sterling weakened against the US Dollar by 11.01% (2014: strengthened 9.76%), weakened against the Hong Kong Dollar by 11.06% (2014: strengthened 9.66%), weakened against the Thai Baht by 10.01% (2014: strengthened 21.50%) and weakened against the Indian Rupee by 7.2% (2014: strengthened 20.8%).
A 5% rise or decline of Sterling against foreign currency denominated (i.e. non-Sterling) assets held at the year end would have decreased/increased the net asset value by GBP1,880,000 or 4.09% of net asset value (2014: GBP2,018,000 or 4.89% of net asset value). It is not practical to estimate the impact on the profit and loss account since the profit and loss is the net result of all the transactions in the portfolio throughout the year.
Interest rate risk
The Company is exposed to a very low level of interest rate risk through its cash deposits with The Northern Trust Company. The Company had no borrowings at the year end (2014: nil) and therefore sensitivity analysis to changes in LIBOR are not applicable.
Equity price risk
If the fair value of the Company's investments at the year end increased/decreased by 10% then it would have the effect of GBP4,231,000 or 21.16 pence per Ordinary Share (2014: GBP3,534,000 or 17.67 pence per Ordinary Share) on the capital return.
Liquidity risk
Liquidity risk is generally not significant in normal market conditions as the majority of the Company's investments are listed on recognised stock exchanges and for the most part readily realisable securities which can be sold easily to meet funding commitments if necessary. Short-term flexibility may be achieved by the use of bank overdrafts.
Credit risk
Credit risk is mitigated by diversifying the counterparties through whom the Investment Manager conducts investment transactions. The credit-standing of all counterparties is reviewed periodically with limits set on amounts due from any one broker.
Cash is only held at banks and in money market funds that have been identified by the Board as reputable and of high credit quality. Northern Trust has a credit rating of A1 (2014: A1) with Moody's and AA- (2013: A+) with S&P. No cash was held in money market funds during the years ended 31 March 2015 and 31 March 2014.
The total credit exposure (representing current assets) of the Company at the year end as shown on the Balance Sheet was GBP4,166,000 (2014: GBP6,053,000).
Valuation of financial instruments
The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:
- Level 1 - valued using quoted prices unadjusted in active markets for identical assets or liabilities.
- Level 2 - valued by reference to valuation techniques using observable inputs for the asset or liability other than quoted prices included within Level 1.
- Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data for the asset or liability.
The table below sets out fair value measurements of financial instruments as at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised.
Financial assets at fair value through profit or loss at 31 March 2015
level 1 level 2 level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments 42,311 - - 42,311
------------ ------- ------- ------- -------
There were no transfers between Levels 1 and 2 during the year. A reconciliation of fair value measurements in Level 3 is set out below.
Level 3 Financial assets at fair value through profit or loss at 31 March 2015
Equities
GBP'000
Opening fair value 191
Purchases at cost -
Sales proceeds (291)
Total gains included in gains/(losses) on investments
in the Income Statement
- on assets sold 100
- on assets held at the
period end -
Closing fair value -
--------------------------------------------------------- --------
At the start of the financial year, the Company held an investment in BDT Invest LLP (representing 17.8% of that entity) which was held through BDT Investment Management Limited (BDT). The Company also held a 4% interest in Bedlam Asset Management Limited (BAM). Both of these investments have been placed in members' voluntary liquidation and, during the year ended 31 March 2015, proceeds of GBP140,000 were received in respect of BDT and GBP151,000 in respect of BAM. A small residual distribution may be receivable from BDT. No further distributions are expected to be received from BAM.
Financial assets at fair value through profit or loss at 31 March 2014
level 1 level 2 level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000
Investments 35,146 - 191 35,337
------------ ------- ------- ------- -------
There were no transfers between Levels 1 and 2 during the year. A reconciliation of fair value measurements in Level 3 is set out below.
Level 3 Financial assets at fair value through profit or loss at 31 March 2014
Equities
GBP'000
Opening fair value 514
Purchases at cost -
Sales proceeds -
Total losses included in gains/(losses) on investments
in the Income Statement
- on assets sold -
- on assets held at the
period end (323)
Closing fair value 191
---------------------------------------------------------- --------
The valuation techniques used by the Company are explained in the accounting policies note 1(b).
Capital management policies and procedures
The capital managed by the Company is only its equity shareholders' funds of GBP45,924,000 (2014: GBP41,286,000).
The Company currently has no borrowings.
The Company's objectives, policies and procedures for managing capital are set out in the share capital section of the Directors' Report in the Annual Report.
Statement of Directors' Responsibilities in respect of the Annual Report, the Directors' Remuneration Report and Financial Statements
The Directors are responsible for preparing the Annual Report, the Directors' Remuneration Policy and Implementation Reports and the Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Financial Statements for each financial year. Under the law, the Directors have elected to prepare Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the net return of the Company for that period. In preparing these Financial Statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; and
-- prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable the Directors to ensure that the Financial Statements and Directors' Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Financial Statements are published on www.blackfriarsam.com, which is a website maintained by the Company's Investment Manager. The Directors are responsible for the maintenance and integrity of the Company's information that is available on the website. The work carried out by the Auditor does not involve consideration of the maintenance and integrity of the website and accordingly the Auditor accepts no responsibility for any changes that have occurred to the Annual Report and Financial Statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of the Financial Statements may differ from legislation in other jurisdictions.
Directors' confirmation statement
Each of the Directors, (Sir David Cooksey (Chairman), Jim Ryall, Gregory Shenkman, Susan Thornton, Tom Waring and Harry Wells), confirm that, to the best of their knowledge:
-- the Financial Statements, which have been prepared in accordance with the United Kingdom Generally Accepted Accounting Practice, (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company; and
-- the Annual Report, including the Strategic Report, 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.
Having taken advice from the Audit Committee, the Directors consider that the Annual Report and Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's performance, business model and strategy.
Financial Information
This announcement does not constitute the Company's statutory accounts. The financial information for 2015 is derived from the statutory accounts for 2015, which will be delivered to the registrar of companies following the Company's Annual General Meeting. The statutory accounts for 2014 have been delivered to the registrar of companies. The auditors have reported on the 2015 and 2014 accounts; their reports were unqualified and did not include a statement under Section 498(2) or (3) of the Companies Act 2006.
Printed copies of the Annual Report and Financial Statements for the year ended 31 March 2015 will be posted to shareholders in due course and can be requested from the Registered Office of the Company. A pdf copy can be viewed or downloaded from the Investment Manager's website www.blackfriarsam.com. Neither the contents of the Investment Manager's website nor the contents of any website accessible from hyperlinks on the Investment Manager's website (or any other website) is incorporated into or forms part of this announcement.
The Annual Report will be submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.morningstar.co.uk/uk/NSM
Annual General Meeting
The Annual General Meeting of the Company will be held at the offices of Blackfriars Asset Management Limited, 9 Cloak Lane, London, EC4R 2RU on 7 July 2015 at 12 noon. The notice of AGM is contained in the Annual Report for the year ended 31 March 2015.
4 June 2015
Secretary and registered office:
Cavendish Administration Limited
145-157 St John Street
London
EC1V 4RU
For further information contact:
Anthony Lee
Cavendish Administration Limited
Tel: 020 7490 4355
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSDFILFISESM
1 Year Establishment Investment Chart |
1 Month Establishment Investment Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
