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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Invesco Asia Trust Plc | LSE:IAT | London | Ordinary Share | GB0004535307 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 4.00 | 1.34% | 302.00 | 301.00 | 302.00 | 302.00 | 302.00 | 302.00 | 27,161 | 16:35:30 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | 6.97M | 2.72M | 0.0407 | 74.20 | 201.9M |
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Invesco Asia Trust plc
Half-Yearly Financial Report
For the Six Months to 31 October 2017
KEY FACTS
Invesco Asia Trust plc (the 'Company') is an investment trust listed on the
London Stock Exchange.
Investment Objective
The Company's objective is to provide long-term capital growth by investing in
a diversified portfolio of Asian and Australasian companies. The Company aims
to achieve growth in its net asset value (NAV) in excess of the Benchmark
Index, the MSCI AC Asia ex Japan Index (total return, in sterling terms).
Investment Policy
Invesco Asia Trust plc invests primarily in the equity securities of companies
listed on the stockmarkets of Asia (ex Japan) including Australasia. It may
also invest in unquoted securities up to 10% of the value of the Company's
gross assets, and in warrants and options when it is considered the most
economical means of achieving exposure to an asset.
The Company is actively managed and the Manager has broad discretion to invest
the Company's assets to achieve its investment objective. The Manager seeks to
ensure that the portfolio is appropriately diversified having regard to the
nature and type of securities (such as performance and liquidity) and the
geographic and sector composition of the portfolio.
Full details of the Company's investment limits are on page 6 of the 2017
annual financial report.
Performance Statistics
The Benchmark Index of the Company is the MSCI AC Asia ex Japan Index (total
return, in sterling terms).
Terms marked ? are defined in the Glossary of Terms on page 65 of the 2017
annual financial report.
SIX MONTHSED
31 OCT 2017
Total Return Statistics(1):
- Net asset value? (NAV) 14.8%
- Share price 13.4%
- Benchmark index? 15.5%
Capital Statistics AT 31 OCT AT 30 APR %
2017 2017 CHANGE
NAV? 330.0p 291.3p +13.3
Share price(1) 287.0p 257.0p +11.7
Benchmark index(1) - - +13.5
Discount? per ordinary share:
- cum income 13.0% 11.8%
- ex income 11.7% 10.3%
Average discount over the
six months/year (ex income)(1) 10.1% 10.9%
Gearing?:
- net cash 2.0% 2.6%
(1) Source: Thomson Reuters Datastream.
INTERIM MANAGEMENT REPORT INCORPORATING THE CHAIRMAN'S STATEMENT
Chairman's Statement
Performance
Asian equity markets have continued to make strong gains over the past six
months, underpinned by an upturn in corporate earnings revisions and solid
global economic expansion. Sentiment towards Asian equity markets benefited
from stable economic growth in China, helped by robust consumer spending, and
evidence that the authorities are succeeding in their attempts to rebalance the
economy away from investment-led growth. While the markets have risen, Asia
continues to be an attractive place to invest for the long-term given our
portfolio manager's perspective and focus on valuations.
I am pleased to report that the Company's strategy has delivered a solid
performance albeit marginally behind the benchmark's return. Over the six month
period to 31 October 2017, the net asset value per ordinary share on a total
return basis increased by 14.8% compared to the benchmark index, the MSCI All
Countries Asia ex-Japan Index, which returned 15.5% (in sterling terms). Over
the same period, the Company's share price return was less at 13.4%, a direct
consequence of the discount to net asset value widening from 10.3% to 11.7%.
Rising discounts generally were a feature in the sector, with the average
across our peers increasing from 7.6% to 8.0%. Over the six month period under
review, the Company's average discount (ex income) was 10.1%, marginally above
the Board's desired discount of 10%.
On a longer term basis, the NAV and share price total returns of the Company
continue to be excellent, with both comfortably ahead of the benchmark as shown
in the table below.
Total Return 3 years 5 years 10 years
NAV 63.8% 116.3% 174.1%
Share Price 61.3% 114.6% 180.5%
Benchmark 51.5% 78.0% 103.6%
Tender Offer and Discount
As detailed in my Chairman's Statement in the 2017 annual financial report, the
Company sought and was granted shareholder approval on 10 August 2017 to
implement a 15% tender offer. As a result 15% of the Company's ordinary issued
share capital (12,514,241 shares) was bought back at a 2% discount to NAV. The
price per share was 312.8857p. Following this share buy back the share capital
consisted of 74,999,881 ordinary shares including 4,085,406 shares held in
treasury.
As also explained in my Statement, the Board concluded that a continuation of
the tender arrangement was not in shareholders' long term interests and
therefore this arrangement has been discontinued. The Board remains committed
to seeking to control the discount, and believes that it is desirable that the
Company's shares should trade at a price that, in normal market conditions,
represents a discount of less than 10%. Accordingly the Board sought, and
obtained, shareholder approval to buy back up to 14.99% of its shares at the
AGM, and will use this facility if the Board determines this to be in the best
interests of shareholders and the Company.
Dividend
For the six months to 31 October 2017, the revenue per ordinary share was 4.65p
(2016: 3.64p). As has been the case in previous years the Board does not intend
to pay an interim dividend. At the last AGM held on 10 August 2017, a final
dividend of 4.30p per share was approved and this was paid to shareholders on
14 August 2017.
Borrowings
The Manager has the freedom to borrow within a range set by the Board according
to the overall limit of the Company's investment policy which permits gross
gearing of up to 25% of net assets. The Board has set a working range of up to
15% of net assets. In practice, borrowings in the period have been minimal so
that net gearing was generally less than 1%. At 31 October 2017, the Company,
on a net basis, was not geared and held cash of 2.0%. At the date of this
report the Company remains ungeared.
Board Composition
Through the Nominations Committee, the Board regularly reviews composition and
succession planning for the Company. Following the retirement of the Audit
Committee and Management Engagement Committee Chairman James Robinson at the
last AGM, Fleur Meijs has taken over the chairmanship of these committees. To
further strengthen the Board, an external facilitator, Trust Associates, was
engaged to conduct a search for an additional Director and consequently Neil
Rogan was appointed as a non-executive Director on 1 September 2017. Mr Rogan
has broad experience of investment companies both as an investment manager and
as a non-executive director. He was director of Global Equities at Henderson
Global Investors and has held senior positions as an investment manager at
Gartmore Investment Limited. The Board believes that Mr Rogan will bring a
wealth of investment management experience to complement the current skills and
experience on the existing Board.
Carol Ferguson
Chairman 14 December 2017
Portfolio Manager's Report
Market Review
Asian equity markets, as measured by the MSCI AC Asia ex Japan Index (total
return), rose 15.5% over the six months to 31 October 2017 in sterling terms.
Factors that have improved investor sentiment include: corporate earnings
growth forecasts being revised up to 20% for 2017 from 10% at the beginning of
the year, a weaker US dollar, and President Trump's failure to implement
disruptive trade policies.
China's equity markets led the rally, benefiting from increasing earnings
expectations. This stemmed not only from the higher growth sectors such as
e-commerce, internet and consumer discretionary but also from the more
structurally challenged industrial sectors that are experiencing improved
pricing power from capacity rationalisation. High debt levels remain a concern
in China but the market has reacted positively to the government's
determination to rein in some of the more risky areas of the non-bank financial
sector. This has been achieved without a significant negative impact on the
liquidity of the broader banking system or on real economic activity.
The South Korean market was among the best performing in the region despite
tensions caused by North Korea's aggressive behaviour and a related Chinese
boycott of South Korean products. A key market driver was Samsung Electronics'
share price performance which rose due to the strength of its semiconductor
business and the company's actions to enhance shareholder returns.
India's equity market also rose but underperformed the region as economic
activity remained weak. The economy continues to struggle to digest the excess
capacity and bad debt created during the last cycle. It is also one of the few
markets to experience downward revisions to earnings forecasts. Recently,
however, the government's plan to recapitalise state-owned banks drove the
market higher as it is expected to strengthen bank balance sheets, speed up the
resolution of bad debts and provide a boost to economic growth over the medium
term.
Finally, the Taiwanese equity market outperformed as technology stocks rose on
increased pricing power as a result of favourable supply/demand dynamics and
anticipation that new Apple products will drive the revenue growth of Apple's
suppliers.
Portfolio Review
In the six months to 31 October 2017, the Company's net asset value increased
by 14.8% (total return, GBP). This performance was marginally behind that of the
benchmark which rose by 15.5% (total return, GBP).
The Company's exposure to hardware technology companies contributed
significantly to performance. For example, MediaTek, a Taiwanese semiconductor
design company with substantial cash on its balance sheet, was the largest
contributor to relative performance. MediaTek's profits have been pressured by
the weakness of its mobile chip division. However, new products being
introduced in 2017 and beyond should improve MediaTek's competitive and cost
position leading to better profitability. The market has begun to take account
of this positive change. Given how low MediaTek's margins have become, small
increases in margin will have a significant positive impact on its bottom line.
Also in Taiwan, two small cap stocks added considerable value. Yageo's share
price rallied as the passive component manufacturer raised prices across its
product range, while Chroma ATE rose due to evidence of strong demand for its
test instruments and automated testing products. The attraction of Chroma is
its exposure to new growth areas within technology - electric vehicles, lithium
batteries, laser diodes (used in facial recognition) and graphics processing
units (used in advance computing) - while its consistently high margins
highlight its technology advantages that have been hard for competitors to
replicate.
Our stock selection in Indian equities also added value this year. For example,
the real estate company, Sobha, outperformed as a number of positive regulatory
changes are expected to stimulate the market and lead to higher market shares
for the leading property companies. Lower mortgage rates are an additional
positive for the sector. Also in India, a large private port operator, Adani
Ports, benefited from improving volume growth expectations due to increased
containerisation of cargo and a ramp-up in volume at new ports. The company has
also addressed some of the market concerns about its inter-group transactions.
We believe that Adani is one of best ways to play an eventual revival in Indian
economic growth.
Elsewhere, Minth, a Chinese auto-parts manufacturer, performed strongly thanks
to robust order growth and product upgrades which have driven sales and margin
growth. In our view, this company's large order backlog offers a high level of
revenue visibility in the medium term, while its valuation remains reasonable.
Conversely, Korea Electric Power (Kepco) performed poorly over the period. The
company saw its share price weaken due to lower utilisation of its nuclear
plants, consistently high coal prices and uncertainty about future tariff
policy. The shares are trading at close to trough valuations and we believe the
market is underappreciating the government's incentive to ensure that the
company generates an acceptable return on capital. Without this, Kepco will be
unable to deliver on the government's desire to transition the power generation
mix away from coal and nuclear towards renewables.
In South Korea, the financial holdings detracted from performance during the
review period. DGB Financial's share price suffered from uncertainty
surrounding a potential acquisition despite quarterly results showing that core
profitability remains stable. Also, Korean Reinsurance was impacted by the high
number of typhoons this year. However, we view this as a temporary impact on
earnings and believe that the market is underestimating the strength of the
underlying profitability of the business. Even after taking into account the
typhoon losses, the company trades on 6x earnings with a 4.6% dividend yield.
The Company's lack of exposure to Alibaba and underweight position in Tencent
had a negative impact on index relative performance as both of these companies'
share prices benefited from solid results and positive guidance from the
companies. Over the reporting period, some Chinese internet companies that the
Company does own in size such as Netease and JD.com experienced a lull in
performance. However we view this divergence in performance as temporary.
Outlook and Strategy
Asian markets have recovered strongly from the lows in February 2016, rising
by close to 70% in sterling terms. There are several reasons to expect returns
to be more modest in future. Firstly, valuations are now less attractive than
before. The MSCI AC Asia ex Japan Index is now trading at 13.2x 2018 expected
earnings and 1.8x trailing book value. While reasonable against other global
equity markets, these valuation multiples are above their long-term averages.
Secondly, as a result of higher valuations, further sustainable market
performance is likely to become more reliant on a continuation of positive
earnings momentum. However, two important drivers of the improved macro
environment for earnings, Asian export growth and Chinese economic growth, have
now peaked. In a number of Asian countries, export growth has accelerated to
over 20% year on year. This is unsustainable in the current global demand
environment. There is also clear evidence that Chinese economic momentum is now
slowing as a result of policy tightening and slower credit growth. While
consumption has been quite resilient so far, property sales, infrastructure
investment and exports are all now slowing. So, while there are always
exceptions to be found, it is unlikely that Asia can experience a broad-based
acceleration of earnings against this backdrop. Thirdly, Asian market
performance has been quite narrow in 2017 with returns coming
disproportionately from the technology sector, both internet and technology
hardware. This is similar to trends seen in other global equity markets. The
technology sector has also dominated Asia's earnings revisions so the good
performance has been based on sound fundamentals. However, we feel less
optimistic about future returns given the record valuations seen in some
internet stocks and the risk that we are nearing the cyclical earnings peak in
some areas of technology hardware.
Our response to this has been to gradually reduce the Company's longstanding
overweight exposure to the technology sector. Since the beginning of the
financial year, we have moved from being 4.8% overweight technology to 1%
underweight. By contrast we have reinvested in stocks that, in our view, remain
attractively valued and have the potential to grow further.
For example, we have added exposure in the energy sector. While we do not have
a strongly bullish view on oil prices, we observe that the industry is under
significant pressure below $50 per barrel. As a result, we have focused on
energy companies that are profitable at $50 or above. We introduced Inpex, a
Japanese oil and gas company, whose most important asset is about to start
producing liquefied natural gas (LNG) in Australia. We expect this will make a
dramatic change to its earnings capability over the next few years. We also
added to CNOOC - we believe its oil reserves, as well as management's focus on
profitability and asset returns, are being underappreciated by the market.
CNOOC has a free cash yield of 6% at $50 per barrel.
From a country perspective, India remains the largest overweight in the
portfolio. India is differentiated by the fact that it is at the bottom of its
business and credit cycles. Meanwhile, under Prime Minister Modi, India has
begun to deliver on its economic reform agenda. The implementation of the Goods
& Services Tax, the approval of the new Bankruptcy Code and the
recapitalisation of the state-owned banks are forming a solid foundation for
future economic growth. It is notable that after a long period of disappointing
economic and earning trends, there are recent signs that the economy has
started to accelerate. Our preferred way to gain exposure is through the
financial sector. In particular, we have added to ICICI Bank. ICICI Bank has
been impacted by asset quality problems in the large corporate sector but we
now believe that we have passed the peak of this problem and that the bank's
return on equity will gradually normalise. This should lead to an increase in
valuation.
Another source for attractive investment ideas is South Korea which is amongst
the cheapest markets in Asia. This discount partly results from the high
representation of cyclical stocks in the market and the uncertainty caused by
aggressive behaviour of the North Korean regime. However, South Korea's history
of poor corporate governance has also been a significant factor in the
discount. This is best demonstrated by the low average dividend pay-out ratio
which is about 20% lower than the average for Asia ex Japan. However, we
believe that this is beginning to change for the better with positive
implications for valuations. Firstly, Samsung Electronics has moved to a
capital return policy which outlines that at least 50% of free cash flow will
be returned to shareholders in the form of dividends and share buybacks. As
South Korea's most successful company, Samsung's more shareholder-friendly
actions are likely to be copied by other business groups. Secondly, the Korea
National Pension Service, a large shareholder in many South Korean companies,
has become more forceful in demanding better shareholder returns. We see value
in a number of sectors in South Korea such as banks, insurance, autos and
utilities.
Ian Hargreaves
Portfolio Manager
14 December 2017
RELATED PARTY TRANSACTIONS
Under United Kingdom Generally Accepted Accounting Practice (UK Accounting
Standards and applicable law), the Company has identified the Directors as
related parties. No other related parties have been identified. No transactions
with related parties have taken place which have materially affected the
financial position or the performance of the Company.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risk factors relating to the Company can be summarised as
follows:
Strategic Risk
Market Risk
A significant fall and/or a prolonged period of decline in the markets is which
this Company invests will negatively affect the performance of the portfolio,
as could other macro events including Brexit.
Investment Objectives
The Company's investment objectives and structure are no longer meeting
investors' demands.
Wide Discount
Lack of liquidity and lack of marketability of the Company's shares may lead to
a stagnant share price and wide discount, with a persistently high discount
leading to continual buy backs of the Company's shares and shrinkage of
Company.
Management Risk
Performance
The risk that as a result of the portfolio manager's decisions, the Company
could consistently underperform the benchmark and/or peer group over 3-5 years.
Key Person Dependency
The risk that the portfolio manager (Ian Hargreaves) ceased to be portfolio
manager or is incapacitated or otherwise unavailable.
Currency Fluctuation Risk
The movement of exchange rates may have an unfavourable impact on returns as
nearly all of the Company's assets are non-sterling denominated.
Third Party Service Providers Risk
Unsatisfactory Performance of Third Party Service Providers
Failure by any service provider to carry out its obligations to the Company
could have a materially detrimental impact on operations; could affect the
ability of the Company to successfully pursue its investment policy; and expose
the Company to reputational risk.
Information Technology Resilience and Security
The Company's operational structure means that all cyber risk (information and
physical security) emanates from its third party service providers (TPPs). This
cyber risk could include fraud, sabotage or crime perpetrated against the
Company or any of its TPPs.
Regulation and Corporate Governance Risk
Failure to Comply With Relevant Law and Regulations
The failure to ensure regulatory compliance, or adverse regulatory or fiscal
changes, could damage the Company and its ability to continue in business.
In the view of the Board, these principal risks and uncertainties are as much
applicable to the remaining six months of the financial year as they were to
the six months under review.
GOING CONCERN
The financial statements have been prepared on a going concern basis. The
Directors consider this is the appropriate basis as they have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future, being at least 12 months after the
approval of this half-yearly financial report. In considering this, the
Directors took into account the diversified portfolio of readily realisable
securities which can be used to meet short-term funding commitments, the
ability of the Company to meet all of its liabilities and ongoing expenses from
its assets, and revenue forecasts.
DIRECTORS' RESPONSIBILITY STATEMENT
in respect of the preparation of the half-yearly financial report
The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and UK Accounting
Standards.
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements contained within the half-yearly
financial report have been prepared in accordance with the FRC's FRS 104
Interim Financial Reporting;
- the interim management report includes a fair review of the information
required by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency
Rules; and
- the interim management report includes a fair review of the information
required on related party transactions.
The half-yearly financial report has not been audited or reviewed by the
Company's auditor.
Signed on behalf of the Board of Directors.
Owen Jonathan
Director
14 December 2017
TWENTY-FIVE LARGEST HOLDINGS AT 31 OCTOBER 2017
Ordinary shares unless otherwise stated
The industry group is based on MSCI and Standard & Poor's Global Industry
Classification Standard.
MARKET
VALUE % OF
COMPANY INDUSTRY GROUP COUNTRY GBP'000 PORTFOLIO
Samsung Electronics - Technology Hardware & South Korea 9,980 6.7
ordinary shares Equipment
Samsung Electronics - 5,310
preference shares
Baidu - ADR Software & Services China 8,968 3.9
Taiwan Semiconductor Semiconductors & Taiwan 8,434 3.7
Manufacturing Semiconductor Equipment
HDFC Bank Banks India 7,704 3.4
Hyundai Motor - Automobiles & Components South Korea 7,663 3.3
preference shares
AIA Insurance Hong Kong 7,169 3.1
MediaTek Semiconductors & Taiwan 6,945 3.0
Semiconductor Equipment
CNOOCR Energy China 6,337 2.8
NetEase - ADR Software & Services China 6,312 2.8
JD.com - ADR Retailing China 6,307 2.8
Chroma ATE Technology Hardware & Taiwan 5,947 2.6
Equipment
Industrial & Commercial Banks China 5,813 2.5
Bank Of ChinaH
Tencent Software & Services Hong Kong 5,791 2.5
China MobileR Telecommunication Services China 5,665 2.5
CK Hutchison Capital Goods Hong Kong 5,565 2.4
Qingdao Port Transportation China 5,159 2.3
International
United Overseas Bank Banks Singapore 4,649 2.0
HSBC Banks Hong Kong 4,604 2.0
Korea Electric Power Utilities South Korea 4,580 2.0
MINTH Automobiles & Components China 4,489 2.0
UPL Materials India 4,453 1.9
Samsonite International Consumer Durables & Apparel Hong Kong 4,029 1.8
Sobha Real Estate India 3,957 1.7
ICICI Banks India 3,955 1.7
Hon Hai Precision Technology Hardware & Taiwan 3,856 1.7
Industry Equipment
153,641 67.1
Other investments 75,379 32.9
Total investments 229,020 100.0
ADR: American Depositary Receipts - are certificates that represent shares
in the relevant stock and are issued by a US bank. They are denominated and pay
dividends in US dollars.
H: H-Shares - shares issued by companies incorporated in the People's Republic
of China (PRC) and listed on the Hong Kong Stock Exchange.
R: Red Chip Holdings - holdings in companies incorporated outside the
PRC, listed on the Hong Kong Stock Exchange, and controlled by PRC entities by
way of direct or indirect shareholding and/or representation on the board.
CONDENSED INCOME STATEMENT
SIX MONTHS TO SIX MONTHS TO
31 OCTOBER 2017 31 OCTOBER 2016
REVENUE CAPITAL TOTAL REVENUE CAPITAL TOTAL
RETURN RETURN RETURN RETURN RETURN RETURN
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on investments at fair - 31,477 31,477 - 55,416 55,416
value
Losses on foreign currency - (256) (256) - (274) (274)
revaluation
Income - note 2 4,505 - 4,505 3,807 - 3,807
Gross return 4,505 31,221 35,726 3,807 55,142 58,949
Investment management fee - (236) (709) (945) (205) (615) (820)
note 3
Other expenses (286) (4) (290) (270) (1) (271)
Net return before finance 3,983 30,508 34,491 3,332 54,526 57,858
costs and taxation
Finance costs - note 3 (5) (15) (20) (8) (24) (32)
Return on ordinary activities 3,978 30,493 34,471 3,324 54,502 57,826
before taxation
Tax on ordinary activities - (359) - (359) (249) - (249)
note 4
Return on ordinary activities
after taxation for the
financial period 3,619 30,493 34,112 3,075 54,502 57,577
Return per ordinary share
Basic 4.65p 39.17p 43.82p 3.64p 64.57p 68.21p
Weighted average number of 77,851,717 84,405,678
ordinary shares in issue
The total column of this statement represents the Company's profit and loss
account prepared in accordance with UK Accounting Standards. The return on
ordinary activities after taxation is the total comprehensive income and
therefore no statement of comprehensive income is presented. The supplementary
revenue and capital columns are presented for information purposes in
accordance with the Statement of Recommended Practice issued by the Association
of Investment Companies. All items in the above statement derive from
continuing operations of the Company. No operations were acquired or
discontinued in the period.
CONDENSED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
CAPITAL
SHARE REDEMPTION SPECIAL CAPITAL REVENUE
CAPITAL RESERVE RESERVE RESERVE RESERVE TOTAL
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For the six months ended 31
October 2017
At 30 April 2017 8,751 4,373 85,722 137,616 6,563 243,025
Final dividend for 2017 - - - - (3,587) (3,587)
Net return on ordinary - - - 30,493 3,619 34,112
activities
Tendered shares bought back (1,251) 1,251 (39,520) - - (39,520)
and cancelled - note 6
At 31 October 2017 7,500 5,624 46,202 168,109 6,595 234,030
For the six months ended 31
October 2016
At 30 April 2016 8,874 4,250 89,965 71,348 5,671 180,108
Final dividend for 2016 - - - - (3,086) (3,086)
Net return on ordinary - - - 54,502 3,075 57,577
activities
Shares bought back and (123) 123 (3,633) - - (3,633)
cancelled/held in Treasury
At 31 October 2016 8,751 4,373 86,332 125,850 5,660 230,966
CONDENSED BALANCE SHEET
Registered Number 03011768
AT AT
31 OCTOBER 30 APRIL
2017 2017
GBP'000 GBP'000
Fixed assets
Investments held at fair value through
profit or loss - note 5 229,020 236,238
Current assets
Amounts due from brokers 788 917
Tax recoverable 227 167
VAT recoverable 19 15
Prepayments and accrued income 129 308
Cash and cash equivalents 4,589 6,236
5,752 7,643
Creditors: amounts falling
due within one year
Amounts due to brokers (124) (240)
Accruals (618) (616)
(742) (856)
Net current assets 5,010 6,787
Net assets 234,030 243,025
Capital and reserves
Share capital 7,500 8,751
Capital redemption reserve 5,624 4,373
Special reserve 46,202 85,722
Capital reserve 168,109 137,616
Revenue reserve 6,595 6,563
234,030 243,025
Net asset value per share - basic 330.0p 291.3p
Number of 10p ordinary shares in
issue at the period end - note 6 70,914,475 83,428,716
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
1. Accounting Policies
The condensed financial statements have been prepared in accordance with
applicable United Kingdom Accounting Standards and applicable law (UK Generally
Accepted Accounting Practice), including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland, FRS 104 Interim
Financial Reporting and the Statement of Recommended Practice Financial
Statements of Investment Trust Companies and Venture Capital Trusts, issued by
the Association of Investment Companies in November 2014 as updated in January
2017. The financial statements are issued on a going concern basis.
The accounting policies applied to these condensed financial statements are
consistent with those applied in the financial statements for the year ended 30
April 2017.
2. Income
SIX MONTHS TO SIX MONTHS TO
31 OCTOBER 31 OCTOBER
2017 2016
GBP'000 GBP'000
Income from investments
Overseas dividends 3,857 3,325
Special dividends - overseas 384 194
Scrip dividends 107 107
UK dividends 152 181
Deposit interest 5 -
Total income 4,505 3,807
No special dividends have been recognised in capital (31 October 2016: GBPnil).
3. Management Fee and Finance Costs
Investment management fees and finance costs on any borrowings are charged 75%
to capital and 25% to revenue. A management fee is payable quarterly in arrears
and is equal to 0.75% per annum of the value of the Company's total assets less
current liabilities (including any short-term borrowings) under management at
the end of the relevant quarter.
4. Investment Trust Status and Tax
It is the intention of the Directors to conduct the affairs of the Company so
that it satisfies the conditions for approval as an investment trust company.
As such, no tax liability arises on capital gains. The tax charge represents
withholding tax suffered on overseas income.
5. Fair Value Hierarchy Disclosures
The fair value hierarchy analysis for investments at fair value at the period
end is as follows:
AT 31 OCTOBER AT 30 APRIL
2017 2017
GBP'000 GBP'000
Level 1 - The unadjusted quoted price in
an active market for identical assets that
the entity can access at the
measurement date. 229,020 236,238
6. Share Capital movements
(a) Ordinary Shares of 10p each
SIX MONTHS TO YEAR TO
31 OCTOBER 30 APRIL
2017 2017
Number of ordinary shares:
Brought forward 83,428,716 85,462,391
Tendered shares bought back and cancelled (12,514,241) -
Shares bought back and cancelled - (1,225,493)
Shares bought back and held in Treasury - (808,182)
Carried forward 70,914,475 83,428,716
(b) Treasury Shares
SIX MONTHS TO YEAR TO
31 OCTOBER 30 APRIL
2017 2017
Number of treasury shares:
Brought forward 4,085,406 3,277,224
Shares bought back into Treasury - 808,182
Carried forward 4,085,406 4,085,406
Ordinary shares in issue (including treasury) 74,999,881 87,514,122
(c) As announced on 10 August 2017 the Company undertook a tender offer of 15%
of its shares in issue at 312.8857p per share. Fixed costs and expenses of the
tender offer amounted to GBP365,000, giving a total cost of GBP39,520,000. No shares, except for the tender offer shares, were bought back in the period or subsequent to the period end. 7. Dividend per Ordinary Share The Company paid a final dividend of 4.3p per ordinary share for the year ended 30 April 2017 on 14 August 2017 to shareholders on the register on 14 July 2017. 8. Status of Half-Yearly Financial Report The financial information contained in this half-yearly report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the half years ended 31 October 2017 and 31 October 2016 has not been audited. The figures and financial information for the year ended 30 April 2017 are extracted and abridged from the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditor, which was unqualified and did not include a statement under section 498 of the Companies Act 2006. By order of the Board Invesco Asset Management Limited Company Secretary 14 December 2017 END
(END) Dow Jones Newswires
December 14, 2017 05:42 ET (10:42 GMT)
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