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| Name | Symbol | Market | Type |
|---|---|---|---|
| Axs Astoria Inflation Sensitive ETF | AMEX:PPI | AMEX | Exchange Traded Fund |
| Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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| 0.00 | 0.00% | 15.7398 | 0 | 00:00:00 |
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RNS Number:2466R
Premier Pacific Income Fund PLC
23 October 2003
Premier Pacific Income Fund PLC
23 October 2003
Results For the year ended 31st July 2003
At the Board Meeting of Directors, held in Dublin on 22nd October, the Directors
approved the following:
- The Annual Report and Accounts for the year ending 31st July 2003
- The dividend for the quarter ending 30th September 2003
- Restriction on investment in other funds
Annual Report and Accounts
The audited annual report and accounts were approved by the directors on 22nd
October and will be distributed to shareholders in early November. The annual
general meeting has been set for 11:00 on 15th December 2003. More detail on
the report and accounts is appended to this release. A copy of the accounts in
.pdf format will shortly be available from Premier Asset Management's website.
Dividends
A dividend of 0.7 pence per share has been declared in respect of the quarter
ended 30th September 2003. The shares will go ex-dividend on 29th October 2003,
and the dividend will be paid on 24th November 2003 to those on the register at
31st October 2003.
Further, in the absence of unforeseen circumstances, the Board intend to declare
a dividend of 0.7 pence per share for the quarter ending 31st December 2003.
Investment Restriction
In light of changes to the Listing Rules, Conduct of Business Rules and Changes
to the Model Code in the United Kingdom, the Board of Directors confirm that it
is the investment policy of the Fund to restrict investment in other listed
investment companies (including listed investment trusts) to less than 15% of
its gross assets.
As outlined in the annual report, the investment policy of the Fund envisages
the holdings in other funds being reduced to nil save for investment in
specialist vehicles that give access to markets not otherwise available. The
Directors confirm that it is intended at all times that the Fund will meet the
requirements for a U.K. listing.
Chairman's Review
For the year ended 31st July 2003
Introduction
In the interim report for this year I highlighted the problems facing geared
investment funds and the impact that these were having on your Company. Market
falls and the subsequent requirement to repay debt so as not to breach our loan
covenants had a major effect on the net asset value. This was particularly true
in February and March when concerns about war in the Middle East and
uncertainties about North Korea's nuclear intentions were high. The paying off
of debt reduced the capital base and as a consequence, when markets recovered in
the last few months, the net asset value, despite being fully leveraged, could
not make up as much as had been lost in absolute terms.
Performance
Over the twelve months to 31st July 2003, the net asset value has remained
almost unchanged having fallen 0.2% from 45.30 pence per share to 45.22 pence.
Adding in the quarterly dividends, which total to 3.4 pence for the last twelve
months, gives a return of 6.2%. For the same period, the MSCI All Country Asia
Pacific (Free) ex Japan Index, the most appropriate index for our Asia Pacific
portfolio, has given a capital return of 7.6% and a total return of 10.8%. More
detail of performance is given in the Investment Manager's Review.
Income
Over the twelve months, income amounted to #1.823 million, down from #3.766
million in the previous year reflecting the smaller asset base on which interest
and dividends were being earned. Expenses amounted to #1.703 million resulting
in net income of #0.120 million. Allowing for the writing off of capital
expenses of 75% of both the interest income charges on the loan and fund
management fees added back #1.164 million. However, the dividends paid during
the year amounted to #1.436 million with the net result being that the revenue
reserves were reduced by #0.152 million to #0.899 million. The current reserves
are sufficient to cover three quarterly dividends at the current rate of 0.7
pence per quarter.
Loan Covenants
The Fund's loan agreement with the Bank of Scotland requires shareholders' funds
to be at least 66.7% of the amount of the loan outstanding. As mentioned in last
year's annual report and this year's interim report, falls in the value of
investments have meant that debt had to be repaid in order to satisfy this
covenant. Accordingly the loan outstanding has been reduced from #31.0 million
at 31st July last year to #21.0 million at this year-end. As mentioned in the
interim report, the last repayment of #1.0 million was made on 7th March 2003.
There have been no costs associated with the early repayment of the loan as it
has continued to be rolled on a short-term basis rather than being fixed for the
duration of the loan as was originally envisaged in the prospectus. The current
rate of interest on the loan is 4.461%, which compares favourably with the
original assumption of 7.25%.
The Board have considered whether or not it would be appropriate to fix the loan
for a longer term. Whilst short-term interest rates in the U.K. would appear to
have gone as low as they are likely to, nevertheless there seems little reason
to assume that they will rise in the short term. Consequently the Board has
decided to continue to monitor the situation and will continue to roll the loan
on a short-term basis for the time being.
Investment Strategy
The Board believe that it is appropriate to review the investment strategy on an
annual basis. Further they believe that it is important that shareholders should
be clear as to the strategy being pursued by the Fund. Accordingly the
Investment Manager was asked to produce a paper on this for consideration by the
Board at its last meeting. The original strategy was an asset allocation of
47.5% in Asia Pacific ex Japan Equities, 32.5% in Global Bonds and 20% to Income
Shares. As at 31st July 2003, Asia Pacific ex Japan Equities represented 58.2%,
Global Bonds 36.0%, Income Shares 1.0% and Net Current Assets (predominantly
cash) were 4.8%. This shift in allocation is mainly due to relative investment
performance although there was some re-allocation between Equities and Bonds
through the use of profits from foreign exchange hedges to pay down the last
#1.75 million from the debt.
In reviewing the strategy the Board believed that maintenance of a reasonable
dividend payment was important to all shareholders. Therefore any amendments to
the strategy had to be able to meet this. However the Board also believed that
it was important not to pursue income especially in the light of current bond
yields, government indebtedness and the narrowing of the risk premium given to
lower grade bonds. It was felt that growing the capital base to grow income was
a reasonable strategy especially as world economies appeared to be improving.
Further given the current state of the Income Share market this part of the
portfolio is viewed as being on care and maintenance with any opportunity to
dispose of holdings at appropriate prices being seriously considered.
Accordingly shareholders are advised that it is intended that the future asset
allocation strategy will be 67.5% to Asia Pacific ex Japan Equities and 32.5% to
Global Bonds. Although this may produce a shortfall in income in the short
term, the revenue reserves should be more than sufficient to cover this.
Outlook
The Investment Manager's Review to be contained in the Annual Report covers the
outlook for markets. Of particular relevance is the view that bond markets have
now made the majority of their capital returns. Indeed if there is a risk it is
that the supply of debt from governments and companies outstrips demand even
though pension funds and insurance companies need to buy bonds to shore up their
balance sheets. This could push interest rates on longer-dated securities
higher even when short-term rates remain at their current historical low levels.
This would cause prices of bonds to fall creating capital losses. On the
positive side the manager believes that equity markets have the potential to
grow on the back of the world economic recovery and it is against this
background that the investment strategy has been framed.
Balance Sheet
As at 31 July 2003
2003 2002
Assets Notes # #
Investments at Value 2 37,973,403 41,805,209
(cost: #51,872,185
2002: #57,743,852) 9 1,702,459 3,683,065
Security sales receivable - 2,491,680
Unrealised gain on open forward foreign currency 604,675 2,117,955
contracts
Interest & dividends receivable 277,667 568,556
------------ -----------
Total Assets 40,558,204 50,666,465
------------ -----------
Liabilities
Term Loan 17 21,000,000 31,000,000
Foreign exchange payable - 16,364
Distribution payable 295,690 422,414
Interest payable 56,463 17,637
Management fees payable 3 34,089 45,281
Custodian fees payable 14,623 7,992
Administration fees payable 4,378 9,835
Other accrued expenses payable 49,815 11,198
------------ -----------
Total Liabilities 21,455,058 31,530,721
------------ -----------
Net Assets 19,103,146 19,135,74
Net Assets Consist of:
Capital (par value and paid in surplus) 39,741,379 39,741,379
Capitalised expenses (6,912,615) (5,748,853)
Undistributed net investment income 899,254 1,051,713
Undistributed net realised loss from investment (996,061) (1,820,220)
and currency transactions
Unrealised loss from investments and foreign (13,628,811) (14,088,275)
currency transactions
------------ -----------
Total Net Assets 19,103,146 19,135,744
------------ -----------
Number of Shares in issue 42,241,379 42,241,379
------------ -----------
Net Asset Value per share 0.4522 0.4530
Profit and Loss Account
For the year ended 31 July 2003
2003 2002
Investment Income Notes # #
Dividend Income 494,226 1,352,594
Bond Income 1,335,960 2,167,254
Bank interest earned 45,373 360,631
Non reclaimable withholding tax (52,810) (114,050)
------------ ------------
1,822,749 3,766,429
------------ ------------
Expenses
Interest paid 1,158,067 1,747,096
Management fees 3 393,615 610,708
Custodian fees 5 35,340 15,908
Administration fees 6 22,771 32,700
Directors fees 22,543 26,941
Audit fees 9,000 10,207
Other expenses 61,426 34,128
------------ ------------
1,702,762 2,477,688
------------ ------------
Expenses Charged to Capital
Interest paid (868,550) (1,747,096)
Management fees (295,211) (610,708)
------------ -----------
539,001 119,884
------------ ------------
Net Investment Income 1,283,748 3,646,545
------------ ------------
Net realised and unrealised gain/(loss) in
investments:
Net realised loss from securities transactions (1,334,804) (863,311)
Net realised gain/(loss) from currency 2,158,963 (80,205)
transactions
Net change in unrealised depreciation of 1,972,744 (12,033,033)
investments
Net change in unrealised appreciation of foreign (1,513,280) 2,117,955
currency
1,283,623 (10,858,594)
------------ -----------
Net increase/(decrease) in net assets resulting 2,567,371 (7,212,049)
from operations
------------ -----------
Statement of Changes in Net Assets
For the year ended 31 July 2003
2003 2002
Operations: # #
Net investment income 1,283,748 3,646,545
Net realised gain/(loss) on investments and 824,159 (943,516)
currency transactions
Change in unrealised net (depreciation)/ 459,464 (9,915,078)
appreciation of investments and currency
transactions
Net increase/(decrease) in net assets resulting 2,567,371 (7,212,049)
from operations
Capital Share Transactions:
Capitalised expenses (1,163,761) (2,357,804)
Distributions (see note 12) (1,436,208) (3,349,741)
Net Decrease from Capital Share Transactions (2,599,969) (5,707,545)
Net Decrease in Net Assets (32,598) (12,919,594)
Net Assets at the beginning of the year 19,135,744 32,055,338
Net Assets at the end of the year 19,103,146 19,135,744
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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