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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Inv.Perp.Sel Hd | LSE:IVPH | London | Ordinary Share | GB00B1DQ6696 | HEDGE FD SHS 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 90.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Invesco Perpetual Select Trust plc
Preliminary Announcement of Unaudited Final Results
For Period Ended 31 May 2007
Chairman's Statement
I am pleased to present the Company's first Annual Report and Financial
Statements since its launch in November 2006.
The Board of Merrill Lynch Asset Allocator, after sounding out the major
shareholders and considering what would be the best outcome for shareholders as
a whole, came to the conclusion last year that a change of strategy was
necessary and that a structure which contained four discrete asset classes and
which also had the additional benefit of being able to switch between classes
twice a year without crystallising a gain for tax purposes should be offered to
shareholders. They also decided that Invesco Perpetual were the management
group best placed to implement this strategy as managers of the company and
three classes of shares, with the management of the Hedge Fund share class
undertaken by Fauchier Partners. We believe that this structure offers an
excellent range of options to shareholders to re-allocate their assets as
markets or personal circumstances dictate.
Shareholders of MLAA approved the voluntary winding-up and reconstruction of
MLAA in November 2006 and the establishment of a successor vehicle, your
Company, to offer the four asset classes. Details of the asset classes are
shown below and the Managers responsible for the four portfolios comment on
performance within the respective Managers' reports in the Annual Report and
Accounts.
The period to 31 May 2007 has been one of generally good performance from
markets against a background of sound fundamentals in the global economy, and
the net assets of the Company have grown from £131.9 million received in the
reconstruction of MLAA to £142.4 million at the period end.
The investment outlook is mixed. Broadly, sound global economic fundamentals
are offset by inflationary concerns in the US and the UK. However, economic
growth continues in other regions and corporate balance sheets and earnings
remain in good health. We believe market returns will be lower in the coming
year than investors have experienced since 2003 and that markets could prove
more volatile. Nevertheless we are optimistic that our Managers can deliver
attractive returns in the more uncertain market conditions we expect.
Performance
UK Equity Shares
The net asset value (`NAV') of UK Equity Shares delivered a total return of
8.8% from the issue price of 100p, which compares with 10.6% return on the FTSE
All-Share Index over the seven month period since launch. The share price has
slightly underperformed the NAV as the discount widened to 6.3% by the period
end, a trend that affected many investment trusts investing in UK equities. A
dividend of 1.5p per share was declared in respect of the period.
The portfolio was geared during the period and the gearing level was 112 at the
period end.
Global Equity Shares
At the period end the shares delivered NAV total return of 10.9% on the issue
price of 100p, compared with the total return of 9.5% from the MSCI World Index
expressed in sterling. As with all the Company's share classes, and investment
trust shares as a whole, the share price discount widened in the last few weeks
of the period to 7.3%. A dividend of 0.8p per share was declared in respect of
the period.
Hedge Fund Shares and A Shares
The Hedge Fund Shares delivered a very pleasing performance, especially
following the turn of the year, and the NAV ended the period 10.9% ahead of the
issue price of 100p. The share price total return was 4.5%, with the share
price ending the period 5.8% below NAV.
The A Shares were exposed to the same underlying assets as the Hedge Fund
Shares, but performance was diluted by a partial redemption for cash of the A
share portfolio completed in February. All the A shares converted on 31 May
based on a conversion NAV as at 25 May of 107.5p, reflecting a return of 7.5%
on the shares' issue price.
No dividends have been declared or paid on Hedge Fund or A Shares and, as
stated in the Company's prospectus, none are expected.
Managed Liquidity Shares
The Managed Liquidity Shares returned 1.6% in total at the NAV level, including
a dividend of 1.0p per share declared in respect of the period. Earnings per
share were higher than expected and higher than the dividend declared. This was
due to additional tax reliefs being available that were not anticipated at the
time the dividend was declared. As noted below it is intended that the Company
will distribute substantially all the net income and the Board intends to
distribute the revenue retained for the period with the next dividend. Assuming
the tax reliefs remain available, future dividends will be higher than declared
in the year for the same level of portfolio income. This is not intended to be,
and should not be interpreted as, a profit forecast.
Dividend Policy
The ability to convert shares of one class into another could lead to dilution
or enhancement of revenue reserves per share for each of the share classes,
depending on whether there are net conversions respectively into or out of that
class. In order to minimise this effect the Directors intend to distribute
substantially all net revenues earned for each class between conversion dates.
Accordingly dividends on the UK Equity, Global Equity and Managed Liquidity
Shares will vary from year to year depending on net portfolio income. Little or
no net income is expected from the assets underlying the Hedge Fund Shares and
no dividends are expected to be paid.
Share Class Switching
The Company enables shareholders to tailor their asset allocation to reflect
their view of prevailing market conditions. Shareholders have the opportunity
to switch between share classes tax free on 1 November 2007 and every six
months thereafter. Further information can be found in the Shareholder
Information section in the Annual Report and Accounts.
Share Buy Backs
Since the period end 186,000 UK Equity Shares and 1,275,000 Global Equity
Shares were purchased and placed in treasury as share price discounts continued
to drift. The Board intends to use the Company's buy back authorities when this
will benefit existing shareholders as a whole, and will ask shareholders to
renew the authorities each year.
Corporate Governance
The Board remains committed to maintaining the highest standards of Corporate
Governance and is accountable to you as shareholders for the governance of the
Company's affairs.
The Directors believe that, during the period under review, they have complied
with the provisions of the AIC Code of Corporate Governance as endorsed by the
Financial Reporting Council, save in respect of matters discussed in the
Corporate Governance statement contained in the Annual Report and Accounts
Annual General Meeting (`AGM')
At the AGM there are four items of Special Business to be proposed:-
Share Issuance
First, your Directors are asking for the authority to issue up to an aggregate
nominal amount of a third of the issued share capital of each Portfolio - £
162,125 in UK Equity Shares, £128,445 in Global Equity Shares, £68,810 in Hedge
Fund Shares and £72,901 in Managed Liquidity Shares. This will allow Directors
to issue shares within the prescribed limits should any favourable
opportunities arise to the advantage of shareholders. The powers authorised
will not be exercised at a price below NAV of the relevant share so that the
interests of existing shareholders are not diluted. This authority will expire
at the AGM in 2008.
Secondly, your Directors are also asking for the usual authority to issue new
shares in each class pursuant to a rights issue or otherwise than in accordance
with a rights issue of up to an aggregate nominal amount of £24,318 in UK
Equity Shares, £19,266 in Global Equity Shares, £10,321 in Hedge Fund Shares
and £10,935 in Managed Liquidity Shares (5% of the issued share capital of each
share class) dis-applying pre-emption rights. This will allow shares to be
issued to new shareholders without having to be offered to existing
shareholders first, thus broadening the shareholder base of the Company. This
authority will expire at the AGM in 2008.
Share Buy Backs
Thirdly, your Directors are seeking to renew the authority to buy back up to
7,290,794 UK Equity Shares, 5,776,214 Global Equity Shares, 3,094,423 Hedge
Fund Shares and 3,278,373 Managed Liquidity Shares (14.99% of the issued share
capital of each share class) subject to the restrictions referred to in the
notice of the AGM. This authority will expire at the AGM in 2008.
Your Directors are proposing that shares bought back by the Company either be
cancelled or alternatively, be held as treasury shares with a view to their
resale if appropriate, or later cancellation. The holding of treasury shares is
restricted to 10% of the issued share capital of each share class and any sale
of them will only take place on terms that are in the best interests of
shareholders as a whole.
Amendments to the Articles of Association
Fourthly, your Directors are seeking authority to adopt new Articles of
Association with the following changes incorporated:
Conversion of A Shares - Following the conversion of the entire issue of A
Shares, your Directors are seeking authority to remove all references to the A
Shares from the Articles of Association.
Electronic Communications - Your Directors are also seeking general authority
from shareholders to send or supply documents or information to shareholders in
electronic form (e.g. by e-mail) or by means of a website, so taking advantage
of new company legislation regarding electronic communications with
shareholders, which became effective on 20 January 2007.
The resolution also makes various changes to the Articles of Association to
reflect the new legislation on electronic communications, and to make a number
of minor consequential changes required by the Companies Act 2006.
Your Directors have carefully considered all the resolutions proposed in the
Notice to the AGM and in their opinion, consider them all to be in the best
interests of shareholders as a whole. Your Directors therefore recommend that
shareholders vote in favour of each resolution.
The AGM of the Company will be held at the offices of INVESCO Asset Management
Limited on 19 September 2007 at 2.30pm. I do hope that as many shareholders as
possible will attend. This will be an opportunity not only to meet the
Directors, but also to hear the views of the Portfolio Managers with the
day-to-day responsibility for managing the Company's portfolios.
Michael Mason
Chairman
20 August 2007
Income Statement (Unaudited)
For the period 25 August 2006 to 31 May 2007
The Company commenced trading on 23 November 2006
Note Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 10,835 10,835
Gains on currency hedges - 6 6
Foreign exchange gains - 223 223
Income 2 1,810 - 1,810
Investment management fees (151) (335) (486)
Other expenses (262) (482) (744)
Net return before finance costs and 1,397 10,247 11,644
taxation
Finance costs (47) (109) (156)
Return on ordinary activities before 1,350 10,138 11,488
tax
Tax on ordinary activities (90) 44 (46)
Return on ordinary activities after tax for the 1,260 10,182 11,442
financial year
Basic return per ordinary share 3
UK Equity Share Portfolio 1.5p 8.2p 9.7p
Global Equity Share Portfolio 0.9p 10.5p 11.4p
Hedge Fund Share Portfolio (0.2)p 11.5p 11.3p
Managed Liquidity Share Portfolio 1.6p 1.6p 3.2p
The total column of this statement represents the Company's profit and loss
account, prepared in accordance with UK Accounting Standards. The supplementary
revenue and capital columns are both prepared under guidance published by the
Association of Investment Companies. All items in the above statement derive
from continuing operations and the Company has no other gains or losses.
Therefore no statement of recognised gains or losses is presented. No
operations were discontinued in the period.
Reconciliation of Movements in Shareholders' Funds (Unaudited)
For the period 25 August 2006 to 31 May 2007
The Company commenced trading on 23 November 2006
Share Capital Capital Capital
Share Premium Special Redemption Reserve- Reserve- Revenue
Capital Account Reserve Reserve Realised Unrealised Reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Proceeds from issue
of:
ordinary shares 1,309 129,639 - - - - - 130,948
Redemption of
preference shares - - (50) 50 - - - -
Transfer to special - (129,639) 129,639 - - - - -
reserve
A Share conversion 3 - (3) - - - - -
Net gains on
disposals
of investments - - - - 2,298 - - 2,298
Increase in
unrealised
appreciation on
investments - - - - - 8,537 - 8,537
Movements on - - - - - 6 - 6
forwards
Foreign exchange
movements - - - - 46 177 - 223
Management fees
charged
to capital - - - - (335) - - (335)
Finance costs
charged
to capital - - - - (109) - - (109)
Other expenses
charged
to capital - - - - (482) - - (482)
Tax credited to - - - - 44 - - 44
capital
Net return on
ordinary
activities per
the
Income Statement - - - - - - 1,260 1,260
Balance at period 1,312 - 129,586 50 1,462 8,720 1,260 142,390
end
Balance Sheet (Unaudited)
As at 31 May 2007
UK Global Hedge Managed
Equity Equity Fund Liquidity Total
Note £'000 £'000 £'000 £'000 £'000
Fixed assets
Investments held as fair value 55,125 41,022 22,761 18,681 137,589
Current assets
Debtors 1,617 886 457 1,090 4,050
Cash and cash funds 3,394 3,634 703 2,499 10,230
5,011 4,520 1,160 3,589 14,280
Creditors: amounts falling due
within one year (7,001) (1,401) (1,036) (41) (9,479)
Net current assets (1,990) 3,119 124 3,548 4,801
Net assets 53,135 44,141 22,885 22,229 142,390
Capital and reserves
Share capital 488 398 207 219 1,312
Special reserve 48,289 39,430 20,456 21,411 129,586
Capital redemption reserve 19 15 8 8 50
Other reserves:
Capital reserves - realised 108 1,108 27 219 1,462
Capital reserves - unrealised 3,572 2,845 2,221 82 8,720
Revenue reserve 659 345 (34) 290 1,260
Shareholders' funds 53,135 44,141 22,885 22,229 142,390
Net asset value per ordinary
share - basic 4 108.8p 110.9p 110.9p 101.6p
Cash Flow Statement (Unaudited)
For the period 25 August 2006 to 31 May 2007
£'000
Net cash inflow from operating activities 253
Servicing of finance 2
Capital expenditure and financial investment (12,549)
Net cash outflow before management
of liquid resources and financing (12,294)
Management of liquid resources (9,654)
Financing 22,301
Increase in cash 353
Reconciliation of net cash flow to movement in net
funds
Decrease in cash 353
Cashflow from movement in liquid resources 9,654
Exchange movements 223
Cash inflow from increase in debt (6,500)
Net funds at end of period 3,730
Notes
1. The accounts have been prepared in accordance with applicable United Kongdom
law and Accounting Standards and with the Statement of Recommended Practice
(`SORP') for the Financial Statements of Investment Trusts issued in 2005.
2. Income
UK Global Hedge Managed Company
Equity Equity Fund Liquidity Total
£'000 £'000 £'000 £'000 £'000
Income from
investments
UK dividends 753 135 - - 888
Overseas dividends 96 342 3 12 453
Unfranked investment
income
- interest (33) 19 - 339 325
816 496 3 351 1,666
Other income
Deposit interest 68 55 3 18 144
Total income 884 551 6 369 1,810
3. Basic return per ordinary share
Basic revenue, capital and total return per ordinary share is based on each of
the returns on ordinary activities after taxation as shown by the Income
Statement for the applicable Share and on the following number of shares being
the weighted number of shares in issue throughout the period for each
applicable Share:
Average Number
Share of Shares
UK Equity 44,773,798
Global Equity 37,607,185
Hedge Fund 19,593,000
Managed Liquidity 18,404,734
4. Net asset values per share
The net asset value per share and the net assets attributable at the period end
were as follows:
Ordinary shares Net Asset Value Net Assets
per Share Attributable
2007 2007
Pence £'000
UK Equity 108.8 53,135
Global Equity 110.9 44,141
Hedge Fund 110.9 22,885
Managed Liquidity 101.6 22,229
Net asset value per Share is based on net assets at the period end and on the
number of relevant shares in issue at the period end.
This preliminary statement is not the Company's statutory accounts. The above
results for the period ended 31 May 2007 have been agreed with the auditors and
are an abridged version of the Company's full draft accounts, which have not
yet been approved, audited or filed with the Registrar of Companies. The
statutory accounts for 2007 will be finalised on the basis of the information
presented by the Directors in this preliminary announcement and will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting.
The Annual General Meeting of the Company will be held at 2.30pm on 19
September 2007 at 30 Finsbury Square, London EC2A 1AG.
The audited Report and Accounts will be posted to shareholders shortly. Copies
may be obtained during normal business hours for the Company Registered Office,
30 Finsbury Square, London EC2A 1AG.
By order of the Board
INVESCO Asset Management Limited
20 August 2007
END
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