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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Iteris, Inc. | AMEX:ITI | AMEX | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.10 | 0.00 | 01:00:00 |
RNS Number:1228N Investment Trust of Inv Tst PLC 03 July 2003 THE INVESTMENT TRUST OF INVESTMENT TRUSTS PLC Preliminary announcement of audited results for the year ended 30th April 2003 CHAIRMAN'S STATEMENT This is the third full year since your Company adopted its geared split capital structure and investment policy. It has once again been a very difficult year for equity related investment generally and for highly geared split capital investment trusts in particular. Projections for world economic growth continued to fall whilst stock market turbulence increased in a period beset by increasing geo-political risk. The Financial Health of Your Company In this generally poor environment your Company's assets continued to experience severe pressure and I am sorry to have to report a further fall over this period under review. After adjusting for long term bank debt repayments, total assets less current liabilities have fallen by 70.2 % to #10.526 million over the year to 30th April 2003. Over the same period the FTSE Actuaries Investment Companies Index fell by 28.3% whilst the Datastream Investment Trust Split Capital Highly Geared Ordinary Index fell by 61.6%. Your board reported in July 2002 that the Company had breached the financial covenants of its loan agreement and following further market weakness in the second half of 2002 the situation deteriorated to the extent that the Company's liabilities exceeded its assets in August 2002, and this remains the case today. Dividends The Company has been prohibited under the Companies Act 1985 and the terms of its loan agreement from paying dividends to the holders of its Preferred Income, Warrant Income and Ordinary shares for the whole of the financial year under review. The resumption of dividends is dependent on a number of factors (including requirements that the Company's portfolio has a minimum net asset value and distributable reserves) and the board considers that the likelihood the Company will be in a position to resume dividend payments in the foreseeable future is remote. The Warrant Income shares (followed by the Preferred Income shares) will have prior entitlement to any future revenues generated by the Company after satisfying its commitments to the bank. However, we have not accrued for the Warrant Income or Preferred Income share dividends for the year ended 30th April 2003 in these accounts because we believe that the likelihood that such dividend payments will recommence prior to the Company's winding up date of 31st August 2007 is remote. Section 142 of the Companies Act 1985 When the assets of the Company fell to less than 50% of its called up share capital, in accordance with Section 142 of the Companies Act 1985, the directors convened an Extraordinary General Meeting. At this meeting shareholders did not dissent from the board's opinion that, so long as the Company had the support of its bankers, it would not be in the interest of shareholders to wind up the Company. Entitlement to Capital on Liquidation The Group had net liabilities of #8.174 million at 30th April 2003 and was therefore currently unable to meet its obligations to its lenders. Consequently, no class of share had any assets attributable to it as at that date. On a winding up of the Company, the Company's share classes rank in the following order of preference to participate in any surplus capital assets after repayment of the bank debt: 1st: Warrant Income shares, 2nd: Zero Dividend Preference shares ("ZDPs"), 3rd: Preferred Income shares and 4th: Ordinary shares. In monetary terms, on 31st August 2007 the Warrant Income shareholders will have a notional accrued entitlement under the Company's Articles of 0.01p per Warrant Income share. If the aggregate capital entitlement of #205 is covered (and any unpaid entitlement of Warrant Income shareholders to dividends is paid), the ZDP shares will have a notional accrued entitlement of 177.33765p per ZDP. This represents a shortfall of #36.08 million against the Company's net assets which would need to be recovered in order for the ZDP shares to receive their full entitlement. Any excess over that amount would be payable to the Preferred Income shareholders until their aggregate entitlement has been covered, which would again take priority over the Ordinary shares. Bank Debt Throughout the year we have worked closely with the Company's lending bank, Bank of Scotland, and the Company's investment manager, Jupiter Asset Management Limited, to try and resolve the Company's serious financial problems. Bank of Scotland continues to support the Company as a going concern and I would like to express the board's thanks to them for their continuing support through these extremely difficult times. The Company's cash flow projections are carefully monitored by your board and its advisers and these continue to indicate that there would be sufficient revenues to pay the interest on bank debt and limited operating expenses for the foreseeable future. In the event that this is no longer proven to be the case, assets in the Company's portfolio would need to be realised in order to satisfy such payments. In order to maximise the Company's free cash flow, both the directors and Jupiter Asset Management Limited have waived their fees due from the Company and the board has also agreed with Bank of Scotland to endeavour to keep the Company's other administrative expenses to an aggregate of no more than #150,000 per annum. During the year to 30th April 2003, the Company repaid a total of #7.9 million to Bank of Scotland together with #0.591 million of associated interest rate breakage costs. Going forward, the Company intends to repay a minimum of #1 million of bank debt per annum out of revenues (as supplemented by asset sales if required). Bank of Scotland has indicated to the board that, subject to certain conditions, it will not demand early repayment of the loan facility. Continuation as a Going Concern - Fundamental Uncertainty If the Company were to be wound up today no shareholder would receive any amount in respect of their investment in the Company and Bank of Scotland's loan would not be repaid in full. Taking into account Bank of Scotland's current position and the possibility of an improvement in the Company's financial situation during the remainder of its life to 31st August 2007, your board believes that it is in the best interests of all classes of its shareholders for the Company to continue to operate as a going concern. These accounts have therefore been prepared on a going concern basis but there remains a fundamental uncertainty regarding the ability of the Company to continue in operational existence for the foreseeable future. Market Outlook Considerable stock market turbulence has been witnessed over this past year. Accounting scandals emanating from the US, uncertainty leading up to war in Iraq and the SARS virus outbreak all exacerbated generally anaemic world economic growth and therefore corporate profitability. In this environment the net assets and prices for highly geared split capital investment trusts, in which the majority of your Company's portfolio is invested, came under increasing and well documented pressure. The media coverage of this sector has further increased pressure on both share prices and market liquidity which was also commensurably reduced. Your board has been fully supportive of the moves within the industry to improve transparency by increased disclosure by investment trusts of their holdings within the sector. A full list of all holdings representing more than 0.5% of the portfolio can be found on the AITC's website which is up-dated on a monthly basis. Your board and manager have continued to work to reduce the proportionate level of bank debt to assets within these poor market conditions. Equally important is the maintenance of an investment portfolio that has a high degree of equity exposure and revenue production in order to be able to participate in the equity market recovery which, hopefully, we may have begun to see in the last month of our financial year. Martin Boase Chairman 3rd July 2003 CONSOLIDATED STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT) for the year ended 30th April 2003 2003 2002 Revenue Capital Total Revenue Capital Total #'000 #'000 #'000 #'000 #'000 #'000 Net realised - (7,556) (7,556) - (4,528) (4,528) loss on investments Movement in unrealised depreciation of investments - (23,572) (23,572) - (52,505) (52,505) Income 3,112 - 3,112 8,779 - 8,779 Investment (28) (52) (80) (214) (440) (654) management fee Other expenses (171) - (171) (190) - (190) ______ ______ ______ ______ ______ ______ Net return before finance costs and taxation 2,913 (31,180) (28,267) 8,375 (57,473) (49,098) Loan redemption (207) (384) (591) (271) (504) (775) fees Interest (558) (1,036) (1,594) (951) (1,965) (2,916) payable ______ ________ ______ ______ ______ ______ Return on ordinary activities before tax 2,148 (32,600) (30,452) 7,153 (59,942) (52,789) Tax on ordinary (157) 155 (2) (480) 480 - activities ______ ______ ______ ______ ______ ______ Return on ordinary activities after tax 1,991 (32,445) (30,454) 6,673 (59,462) (52,789) Dividend in - - - (2,442) - (2,442) respect of non-equity shares Other appropriations in respect of non-equity - (1,533) (1,533) - (1,365) (1,365) shares ______ ______ ______ ______ ______ ______ Return 1,991 (33,978) (31,987) 4,231 (60,827) (56,596) attributable to equity shareholders Equity - - - (2,834) - (2,834) dividends ______ ______ ______ ______ ______ ______ Transfer to/ 1,991 (33,978) (31,987) 1,397 (60,827) (59,430) (from) reserves Return/(loss) 3.03p (51.68)p (48.65)p 7.31p (105.16)p (97.85)p per Ordinary share: The revenue column of this statement is the profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. CONSOLIDATED BALANCE SHEET at 30th April 2003 2003 2002 #'000 #'000 Fixed assets Investments 10,164 46,742 Current assets Investments 177 303 Debtors 220 458 Cash at bank 236 2,193 633 2,954 Creditors: amounts falling due within one year (271) (816) Net current assets 362 2,138 Total assets less current liabilities 10,526 48,880 Creditors: amounts falling due after more than one year (18,700) (26,600) Net (liabilities) / assets (8,174) 22,280 Capital and reserves Called up share capital 7,647 7,647 Share premium 67,911 67,911 Warrant reserve 2,885 2,885 Capital reserve - realised (749) 9,657 Capital reserve - unrealised (95,026) (71,454) Redemption reserve 4,232 2,699 Revenue reserve 4,926 2,935 Total shareholders' funds (8,174) 22,280 Total shareholders' funds under FRS4 are attributable to: Equity shareholders (65,894) (33,913) Non-equity shareholders 57,720 56,193 (8,174) 22,280 Total shareholders' funds in accordance with the Articles of Association are attributable to: Equity shareholders - - Non-equity shareholders - 22,280 - 22,280 Entitlement per share under FRS4 Ordinary 5p shares - undiluted (100.22)p (51.58)p Zero Dividend Preference shares 126.92p 117.51p Preferred Income shares 49.40p 49.27p Warrant Income shares 140.46p 140.46p Ordinary 5p shares - undiluted 0.0p 0.0p Zero Dividend Preference shares 0.0p 117.51p Preferred Income shares 0.0p 6.17p Warrant Income shares 0.0p 0.01p Approved by the board of directors on 3rd July 2003. CONSOLIDATED CASH FLOW STATEMENT for the year ended 30th April 2003 2003 2002 #'000 #'000 Operating activities Net cash inflow from operating activities 2,944 8,312 Servicing of finance Interest paid (1,646) (3,010) Loan redemption fees (591) (775) Dividends paid on Warrant Income shares - (229) Dividends paid on Preferred Income shares (458) (1,755) Net cash outflow from servicing of finance (2,695) (5,769) Taxation Tax repaid 128 5 Capital expenditure and financial investment Purchase of fixed asset investments - (53,452) Sale of fixed asset investments 5,566 27,336 Net cash inflow / (outflow) from capital expenditure and financial investment 5,566 (26,116) Equity dividends paid - (4,450) Net cash inflow / (outflow) before financing 5,943 (28,018) Financing Proceeds of shares issued - 42,443 Cost of shares issued - (705) Long term loan repaid (7,900) (13,875) Net cash (outflow)/inflow from financing (7,900) 27,863 Decrease in cash (1,957) (155) RECONCILIATION OF REVENUE TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2003 2002 #'000 #'000 Revenue return before interest payable and taxation 2,913 8,375 (Increase)/decrease in prepayments and accrued income (8) 359 Decrease in other creditors and accruals (35) (41) Current asset investment dealings 126 59 Expenses charged to capital reserve: Investment management fee (incl. VAT) (52) (440) _______ _______ Net cash inflow from operating activities 2,944 8,312 ====== ====== ANALYSIS OF CHANGES IN NET FUNDS At 1st May 2002 Cash flow At 30th April 2003 #'000 #'000 #'000 Cash: Cash at bank 2,193 (1,957) 236 Debt: Debts falling due after more than one year (26,600) 7,900 (18,700) _______ _______ _______ Total (24,407) 5,943 (18,464) ====== ====== ====== INCOME 2003 2002 #'000 #'000 Income from investments UK dividend income (net) 2,293 6,425 UK unfranked investment income 68 72 Dividends from overseas companies 755 2,124 3,116 8,621 Other income Deposit interest 32 217 Loss on dealings by subsidiary (36) (59) (4) 158 Total income 3,112 8,779 ====== ====== Income from investments Listed in the UK 3,116 8,621 ====== ====== The Company has been prohibited under the Companies Act 1985 and the terms of its loan agreement from paying dividends to the holders of its Preferred Income, Warrant Income and Ordinary shares during the year ended 30th April 2003. Accordingly, no dividends have been paid to the holders of any class of shares during the year. The resumption of dividends is dependent on a number of factors (including requirements that the Company's portfolio has a minimum net asset value and distributable reserves) and the likelihood that the Company will be in a position to resume dividend payments in the foreseeable future is remote. The figures for the year ended 30th April 2003 do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The statutory accounts for the year ended 30th April 2002, which included an unqualified audit report, have been delivered to the Registrar of Companies. Statutory accounts for the year ended 30th April 2003 including an unqualified audit report will be delivered to the Registrar of Companies in due course. The directors' report and accounts will be posted to shareholders shortly and copies will be available from the registered office of the company at 1 Grosvenor Place, London SW1X 7JJ. The Annual General Meeting has been convened for Thursday 14th August 2003 at 12.30 p.m. This information is provided by RNS The company news service from the London Stock Exchange END FR NKNKQDBKDOOK
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