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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Life Offices | LSE:LOT | London | Ordinary Share | GB0005299143 | ORD 75P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 158.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
LIFE OFFICES OPPORTUNITIES TRUST PLC Results for the year ended 31 December 2007 Key Points * Net Asset Value per share increased 13.4% to 162.27 pence. * Maturity proceeds were approximately 4.4% higher than forecasted last year. * Company now almost 50% in cash and equivalents * The median projected maturity asset value at the end of the Fund's life is approximately 169 pence per share. Using a share price of 152 pence, this equates to a yield to maturity in excess of 11% per annum. * Liquidation vote to take place in the fourth quarter of 2008 * Accounts now presented on a break-up basis. For further information please contact: Colin McLean SVM Asset Management 0131 226 6699 Roland Cross Broadgate 020 7726 6111 *.. LIFE OFFICES OPPORTUNITIES TRUST PLC Chairman's Statement for the year ended 31 December 2007 Commenting on the results for the year ended 31 December 2007, Chairman, John Brumwell, said: "I am pleased to report that the net asset value per share increased by 13.4 per cent to 162.27 pence for the year to 31 December 2007. The investment objective of your Company has been to achieve long-term capital growth and no dividend is payable. This performance is superior to life office with-profit fund returns for the year for the same reasons as intimated last year. Four years of favourable markets have allowed life offices to pass on the positive investment performance of the underlying life funds to policyholders by way of increased annual and terminal bonuses. In addition, the Company maintained an appropriately prudent valuation policy and there have been uplifts as policies mature. Going concern As set out in the Articles of Association, an Extraordinary General Meeting will be convened in the fourth quarter of 2008 in order to approve the voluntary winding-up of the Company. The Directors believe that this approval will be given and accordingly the financial statements for the year to 31 December 2007 accounts have been prepared on a break-up basis . Further details are disclosed in the accounting policies. Over recent years, the Company has published projected terminal maturity values on a quarterly basis. The median projected terminal asset value based on 31 December 2007 numbers is slightly in excess of 169 pence per share. Assuming the Company is wound up at the end of December this year and using the share price of 152 pence, this would equate to a yield to maturity in excess of 11%. Review of 2007 There are 818 policies still to mature in 2008, spread evenly through the first seven months of the year. There were 777 maturities in 2007 yielding approximately £27.9 million, including all eight of the large Century Life policies. The average proceeds for all maturities in the year were approximately 4.4% higher than forecasted this time last year. Initially, maturity proceeds were used to repay the Company's overdraft. Thereafter, following full repayment in August 2007, surplus liquidity was split between short dated UK Government Securities ("gilts") and Sterling deposits. As at the end of December 2007, the Company has approximately 45% of assets in cash and cash equivalents. In order to retain investment trust status, the Company retains more gilts than deposits and the average yield on liquidity is slightly in excess of 5.3%. This rate is higher than the 4% used in the recent quarterly projected terminal maturity value announcements. Life office bonus announcements made in the first quarter of 2007 proved favourable with bonus rates mostly being raised. Generally, terminal bonus rises were favoured ahead of rises in reversionary terminal bonuses. The major with-profit life office funds produced returns of around 9% in calendar year 2006, after taxation and some reserving held back for smoothing. Over the summer, a couple of life offices, principally Standard Life, increased their payouts for policies maturing after August 2007. Undoubtedly, 2007 was a more challenging year for life offices with returns forecast to be in low single digits. The average cautious managed fund has yielded around 2½% net of charges and the median balanced managed fund around 4 ½%. With property unlikely to have contributed much in the way of return, with-profit funds have probably only returned 3½ - 4% gross and around 2¾% or so net. Therefore, it is not surprising to see that recent maturities are not only very close to the Managers' estimations but also at levels only slightly higher than end December 2007 valuations. As previously intimated, the valuation methodology has tended to under-promise and over-deliver. Standard Life The Company was allocated Standard Life ordinary shares in July 2006, these being retained in order to take advantage of the bonus allocation on the first anniversary of flotation. The opportunity was taken subsequently to realise the entire holding at an average price of 320 pence. This contributed approximately 0.75 pence per share to the asset value during the year. At the time of sale, it had been one of the best performing stocks in the FTSE 100 Share Index. Winding up The remaining policies should have matured by the end of the third quarter of 2008. It is the Board's intention to convene a formal shareholder meeting in the fourth quarter, as stipulated in the Company's Articles of Association, to approve the winding up of the Company. A further update will be circulated to shareholders in the interim report in August. Conclusion With approximately half the assets now matured and in cash and cash equivalents and the remaining policies scheduled for maturity this year, we believe the risks to the Company have been markedly reduced. Barring unforeseen circumstances, the Managers believe that the Company should deliver its projected terminal asset value." John C H Brumwell Chairman 8 March 2008 Summarised Income Statement unaudited) Year to 31 December 2007 Year to 31 December 2006 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 5,463 5,463 - 5,964 5,964 Income 153 - 153 2 - 2 Investment management - (324) (324) - (371) (371) fees Other expenses (257) (155) (412) (111) (189) (300) ------ ------ ------ ------ ------ ------ Return before interest (104) 4,984 4,880 (109) 5,404 5,295 and taxation Finance costs - (376) (376) - (723) (723) ------ ------ ------ ------ ------ ------ Return on ordinary (104) 4,608 4,504 (109) 4,681 4,572 activities before tax Taxation - - - - - - ------ ------ ------ ------ ------ ------ Transfer from reserves (104) 4,608 4,504 (109) 4,681 4,572 ------ ------ ------ ------ ------ ------ Return per ordinary share (0.44p) 19.57p 19.13p (0.47p) 19.88p 19.41p . Summarised Balance Sheet As at As at (unaudited) 31 December 31 December 2007 2006 £'000 £'000 Fixed assets Investments at fair value through - 44,695 profit or loss --------- --------- Current assets Investments at fair value through 29,229 - profit or loss Bank 4,912 16 Debtors 4,356 165 --------- --------- 38,497 181 Creditors: amounts falling due (282) (11,165) within one year --------- --------- Net current assets / (liabilities) 38,215 (10,984) --------- --------- Ordinary shareholders' funds 38,215 33,711 --------- --------- Net asset value per ordinary share 162.27p 143.15p Summarised Cash Flow Statement (unaudited) Year to Year to 31 31 December December 2007 2006 £'000 £'000 Net cash outflow from operating (737) (704) activities Returns on investments and (376) (723) servicing of finance Capital expenditure and financial 16,866 3,976 investment Taxation (2) 1 ------- ------- Increase in cash 15,751 2,550 ------- ------- Reconciliation of Movements in Shareholders Funds (unaudited) For the year to 31 December 2007 Share Share Special Capital Capital Revenue capital premium reserve reserve reserve reserve realised unrealised £'000 £'000 £'000 £'000 £'000 £'000 As at 1 January 2007 17,662 5,859 638 (5,572) 16,051 (927) Net gain on sale of - - - 14,226 - - investments Expenses charged to - - - (855) - - capital Movement in unrealised - - - - (8,763) - appreciation on investments Return on ordinary - - - - - (104) activities after taxation -------- -------- -------- -------- -------- -------- As at 31 December 2007 17,662 5,859 638 7,799 7,288 (1,031) -------- -------- -------- -------- -------- -------- For the year to 31 December 2006 Share Share Special Capital Capital Revenue capital premium reserve reserve reserve reserve realised unrealised £'000 £'000 £'000 £'000 £'000 £'000 As at 1 January 2006 17,662 5,859 638 (5,905) 11,703 (818) Net gain on sale of - - - 1,616 - - investments Expenses charged to - - - (1,283) - - capital Movement in unrealised - - - - 4,348 - appreciation on investments Return on ordinary - - - - - (109) activities after taxation -------- -------- -------- -------- -------- -------- As at 31 December 2006 17,662 5,859 638 (5,572) 16,051 (927) -------- -------- -------- -------- -------- -------- Notes (unaudited) 1. The accounts have been prepared in accordance with applicable accounting standards and the 2005 Statement of Recommended Practice (SORP) issued by the Association of Investment Companies. 2. The accounts have been prepared on a break-up basis and all assets and liabilities are stated at their recoverable value. As a consequence, all assets and liabilities have been re-classified as current. In addition, a provision of £120,000 has been made for liquidation expenses. 3. Returns per share are based on a weighted average of 23,550,000 (2006 - 23,550,000) ordinary shares in issue during the year. Total return per share is based on the post tax total return for the year of £ 4,504,000 (2006 - £4,572,000). Capital return per share is based on net capital gains during the year of £ 4,608,000 (2006 - £4,681,000). Revenue return per share is based on the revenue loss after taxation for the year of £104,000 (2006 - £109,000). The number of shares in issue at 31 December 2007 was 23,550,000 (2006 - 23,550,000). 4. Investment management fees, policy advisory fees and finance interest have been allocated 100% to capital (2006: same). 5. The above figures do not constitute full accounts in terms of Section 240 of the Companies Act 1985 and are based on the accounts for the year to 31 December 2007, which are at present unaudited. The accounts for the year to 31 December 2006, on which the auditors issued an unqualified report under Section 235 of the Companies Act 2005, have been lodged with the Registrar of Companies and did not contain a statement required under Section 237(2) or (3) of the Companies Act 1985. The annual report and accounts will be mailed to shareholders and will be lodged with the Registrar of Companies during March 2008. Copies will be available for inspection at 7 Castle Street, Edinburgh EH2 3AH, the registered office of the Company. END
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