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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Investment Company Plc | LSE:INV | London | Ordinary Share | GB0004658257 | ORD 50P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -0.31% | 319.00 | 310.00 | 328.00 | 320.00 | 319.00 | 320.00 | 0.00 | 14:58:42 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Investors, Nec | 1.18M | 739k | 0.4022 | 7.93 | 5.86M |
From May 2019 to May 2024
TIDMINV
RNS Number : 4046Q
Investment Company PLC
19 February 2019
THE INVESTMENT COMPANY PLC
SUMMARY OF RESULTS
Hot Features
Premium
At At
31 December
2018 30 June 2018 Change
(unaudited) (audited) %
=========================== ============ ============= =======
Equity shareholders' funds
(GBP) 15,622,682 17,334,093 (9.87)
Number of ordinary shares
in issue 4,772,049 4,772,049 -
Net asset value ("NAV")
per ordinary share 327.38p 363.24p (9.87)
Ordinary share price (mid) 295.00p 331.00p (10.88)
Discount to NAV 9.89% 8.88%
=========================== ============ ============= =======
6 months to 12 months to
============================
31 December 30 June 2018
2018
============================
(unaudited) (audited)
============================ =========== ============
Total return per ordinary
share (25.16)p 12.27p
Return after taxation per
ordinary share (25.16)p 25.69p
Dividends paid per ordinary
share 10.70p 20.70p
============================ =========== ============
INVESTMENT OBJECTIVE
The Company's investment objective is to provide shareholders with an attractive level of dividends coupled with capital growth over the long term through investment in a portfolio of equities, preference shares, loan stocks, debentures and convertibles.
CHAIRMAN'S STATEMENT
Half-Year to 31 December 2018
During the period under review the FTSE AllShare Index fell by 12.54%. The Company's NAV was down by 9.87% which can be analysed as follows:
Pence per
share %
---------- -------
Opening net assets 363.24 100.00
Investment income 7.95 2.19
Dividends paid (10.70) (2.95)
Expenses (3.76) (1.03)
Portfolio outturn (29.35) (8.08)
---------- -------
Closing net assets 327.38 (9.87)
---------- -------
The share price fell by 10.88% in the period.
There have been some significant changes during the six-month period under review. On 9 July 2018, changes to the Board were announced. Your new Board then reviewed the portfolio and the Company's dividend levels. Pursuant to this the Directors have reduced the level of dividends paid as a step towards ensuring that any dividend paid to shareholders is covered by the income produced by the assets, after allowing for the fixed costs in order to give the Company a chance to grow in size.
Likewise portfolio changes were instigated and the Investment Managers have been seeking investments likely to achieve a portfolio yield of approximately 5%.
Currently the Investment Manager's diligence in seeking value from the Company's historic portfolio holdings, and in actively managing the portfolio in equity stocks in support of the investment policy is bearing fruit. The Investment Manager's Review is set out in their report on page 5 and 6.
Shareholders will note that the financial statements have been restated in accordance with the required transition to International Financial Reporting Standard 9 ("IFRS 9") Financial Instruments. Your attention is drawn to note 10 where further information is provided.
Your Board is conscious that the Company is still too small relative to its relatively fixed cost base and continues to seek out and evaluate opportunities that are likely to attract further capital and enhance shareholder returns.
I. R. Dighé
Chairman
18 February 2019
INVESTMENT MANAGER'S REPORT
Performance
During the period under review Brexit uncertainty has continued to dominate the headlines and investor sentiment as negotiations between the UK and EU progress. The US Dollar was stronger against Sterling whilst Sterling traded in a tight range with the Euro ending the period modestly down. Growth in the UK was surprisingly strong in the third quarter despite overall economic data trending lower. Weak house prices, falling car sales and anaemic retail data were all part of the picture of slowing growth.
The political uncertainty around Brexit has been damaging and has resulted in a wide degree of polarisation within the UK equity market. Companies with substantial overseas earnings have benefitted from the devaluation of sterling. In contrast UK domestic stocks have generally performed poorly and remain undervalued relative to the broader market. A smooth Brexit resolution is widely expected to result in an uplift in the share prices of many UK domestic facing stocks.
During the six month period to 31 December 2018 the NAV was down by 9.87% whilst the share price fell by 10.88%, which was ahead of major UK indices.
Portfolio
The largest corporate exposure in the portfolio is to Aggregated Micro Power Holdings ordinary shares where we have seen an uplift in value following the conversion of our holding in the 8% 2021 Convertible Loan Note. The Newcastle Building Society 3.886% 2019 is now the largest fixed interest holding in the Company. We expect this holding to be redeemed in December of this year.
We have initiated holdings in two housebuilders, Bovis and Persimmon, due to the attractive valuations offered alongside good dividend yields in excess of 8%. Both companies have significant and growing cash flows, large parts of which will be returned to shareholders. The housebuilding sector had a difficult 2018 however not enough housing is being built in the UK to meet current demand. In addition, Bovis continues to improve its build quality and reputation following the arrival of CEO, Greg Fitzgerald.
We purchased a holding in Greene King towards the end of the period as we believe the shares had been sold off too heavily due to pessimism over the UK leisure market. The shares were trading at a significant discount to the NAV, offered an attractive yield of over 6% and are supported by a progressive dividend policy. The shares have risen sharply following a strong Christmas trading update which saw GBP7.7m spent in their pubs on Christmas Day alone. The recent appointment of Nick Mackenzie, bodes well for the company with his extensive experience and track record in the leisure industry. He inherits a business in reasonable shape and can add his own vision and energy to drive top line sales whilst keeping costs under control.
GlaxoSmithKline continues to make progress under the relatively new CEO Emma Walmsley. In December the company announced it was spinning off its Consumer Healthcare business into a joint venture with Pfizer. Ultimately she is reinventing the company with large investments in R&D which we believe have the potential to deliver substantial benefits to patients and shareholders over the long term.
We have also been selectively adding to existing positions within the portfolio such as; Strix - kettle switch manufacturer, Phoenix Group Holdings - life insurance and pension's consolidator, ITV - TV broadcasting and production and Assura - UK REIT that builds and manages General Practitioner (GP) centres.
In the fixed interest part of the portfolio we have added a number of new names including Premier Oil 6.5% 2021 and EI Group - formerly Enterprise Inns - 7.5% 2024. The Premier Oil bond is the result of a major restructuring of the company's debt following the severe fall in the crude oil price during 2015/6. The company is now benefitting from an improved production schedule and generally higher oil prices, so much so that the overall debt burden is now falling. EI Group is performing very well in restructuring its business, paying down outstanding debts and improving the shape of its balance sheet. It recently announced a large disposal of pubs for an attractive price which will allow for a further reduction in outstanding debt in the company.
Prospects & Outlook
It is always a concern when markets fall sharply and in a very short space of time. Putting the recent falls into perspective, it comes after a benign period of positive equity market returns. We are now experiencing much more volatility as investors wrestle with political, economic and financial uncertainties particularly the impact of quantitative tightening by central banks after a prolonged period of fiscal largesse. A correction after a long bull run is not an unusual occurrence and history shows that periods of weakness tend to represent long-term buying opportunities. There have also been some very encouraging dividend increases which can be hidden by share price movements.
The backdrop to equity markets has positive elements. World economic growth although slowing is not plunging into recessionary territory, interest rates are rising but at a very slow pace and inflation appears to be under control. Indeed, recent economic indicators showing a deceleration in growth rates, has resulted in the Federal Reserve Bank putting any further potential interest rates rises on hold. There has been overvaluation of certain technology stocks in the US which is now unwinding but generally valuations are not over-stretched. Brexit issues are probably already priced into UK domestic shares which look cheap and could stage a relief rally irrespective of whether a hard or soft exit eventually occurs. It is impossible to predict the direction of bond and equity markets but we are comfortable with the long-term prospects of the high quality, diversified and robust companies that make up the portfolio.
M. Foster, J. P. Q. Harrison and J. Dieppe
Fiske plc
18 February 2019
TWENTY LARGEST INVESTMENTS
At 31 December 2018
Market
Book Cost Valuation % of total
Stock Number GBP GBP portfolio
Aggregated Micro Power
1 Ordinary 0.5p 714,286 500,000 642,857 4.69
Newcastle Building
Society
2 3.849% sub notes 23/12/19 600,000 405,438 591,822 4.32
600 Group
8% conv loan notes
3 14/02/20 500,000 500,000 524,120 3.82
The Fishguard & Rosslare
Railways and Harbours
Company
3.50 % guaranteed preference
4 stock 790,999 441,810 498,329 3.64
Intercede Group
8% conv loan notes
5 29/12/21 450,000 450,000 450,000 3.28
Nationwide Building
Society
10.25% core capital
6 deferred shares (variable) 3,100 490,536 432,937 3.16
National Westminster
Bank
9% SER 'A' Non-Cum
7 Preference 300,000 217,752 408,000 2.98
EI Group Plc
8 7.5% 15/03/24 400,000 409,099 398,718 2.91
9 Amalgamated Metals
5.4% Cum Pref GBP1 256,065 144,049 204,852
6% Cum Pref GBP1 213,510 103,844 192,159
---------- ---------- ----------
247,893 397,011 2.90
Phoenix Group Holdings
Ordinary Ordinary 10p
10 * 69,445 452,745 390,975 2.85
National Grid
11 Ordinary 11.395p * 50,400 403,032 385,157 2.81
Vodafone Group
12 Ordinary $0.2095 * 242,002 501,387 370,018 2.70
Severn Trent
13 Ordinary 97.89p * 20,000 399,179 362,800 2.65
Renold
14 6% Cum Preference Stock 422,109 330,490 354,572 2.59
GlaxoSmithKline
15 Ordinary 25p * 23,050 324,891 343,722 2.51
Randall & Quilter Investment
Holdings
16 Ordinary 2p* 201,884 194,445 329,071 2.40
17 Croda International
Ordinary 10.35p 6,200 276,160 290,470
5.9% Cum Preference 30,498 23,629 29,888
---------- ---------- ----------
299,789 320,358 2.34
Premier Oil
18 6.5% Notes 31/05/21 310,000 300,097 291,443 2.13
Bristol Waterworks
19 4% Perpetual Debenture 360,118 209,705 288,094 2.10
Unilever PLC
20 Ordinary 3.11p * 7,000 272,063 287,595 2.10
7,350,351 8,067,599 58.88
========== ========== ==========
* Issues with unrestricted voting rights
The Group has a total of 72 portfolio investment holdings in 58 companies.
INTERIM MANAGEMENT REPORT AND DIRECTORS' RESPONSIBILITY STATEMENT
Interim Management Report
The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal risks and uncertainties for the remaining six months of the financial year are set out in the Chairman's Statement on page 4 and the Investment Manager's Report on pages 5 and 6.
The principal risks facing the Group are substantially unchanged since the date of the Report and Accounts for the year ended 30 June 2018 and continue to be as set out in that report. Risks faced by the Group include, but are not limited to, market risk (which comprises market price risk, interest rate risk, liquidity risk, and credit and counterparty risk). Details of the Company's management of these risks and exposure to them is set out in the Company's Report and Accounts for the year ended 30 June 2018.
There have been no significant changes in the related party disclosures set out in the Annual Report.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
-- the condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the European Union; and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and
-- this Half-Yearly Financial Report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period; and any changes in the related party transactions that could do so.
This Half-Yearly Financial Report was approved by the Board of Directors on 18 February 2019 and the above responsibility statement was signed on its behalf by I. R. Dighé, Chairman.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 December 2018
6 months to 31 6 months to 31 Year ended 30
December 2018 December 2017 June 2018
(unaudited) (unaudited) restated (unaudited) restated
Notes Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Realised
gains
on investments - 330,847 330,847 - 294,710 294,710 - 79,185 79,185
Unrealised
(losses)/gains
on investments
held at
fair value
through
profit
or loss - (1,730,156) (1,730,156) 17,652 17,652 - 88,161 88,161
Exchange
losses
on capital
items - (58) (58) (862) (862) - (3,050) (3,050)
Unrealised
losses
on derivative
financial
instruments - - - (59,770) (59,770) - (63,640) (63,640)
Investment
income 2 379,490 - 379,490 403,632 - 403,632 956,273 - 956,273
Investment
management
fee (45,000) - (45,000) (45,007) - (45,007) (88,259) - (88,259)
Other
expenses (134,030) (321) (134,351) (178,206) - (178,206) (378,089) (123) (378,212)
=============== ===== ========= =========== =========== ========= ======== ========= ========= ======== =========
Return
before
finance
costs
and taxation 200,460 (1,399,688) (1,199,228) 180,419 251,730 432,149 489,925 100,533 590,458
Bank debit
interest - - - - - - - - -
=============== ===== ========= =========== =========== ========= ======== ========= ========= ======== =========
Return
before
taxation 200,460 (1,399,688) (1,199,228) 180,419 251,730 432,149 489,925 100,533 590,458
Taxation (1,574) - (1,574) (3,693) - (3,693) (5,329) - (5,329)
=============== ===== ========= =========== =========== ========= ======== ========= ========= ======== =========
Total
comprehensive
income
after
taxation 198,886 (1,399,688) (1,200,802) 176,726 251,730 428,456 484,596 100,533 585,129
=============== ===== ========= =========== =========== ========= ======== ========= ========= ======== =========
Return
on total
comprehensive
income
per 50p
ordinary
share
Basic
and diluted 3 4.17 (29.33) (25.16) 3.70 5.28 8.98 10.15 2.11 12.27
--------------- ----- --------- ----------- ----------- --------- -------- --------- --------- -------- ---------
The total column of this statement is the Consolidated Statement of Total Comprehensive Income of the Group prepared in accordance with International Financial Reporting Standards ("IFRS").The supplementary revenue and capital columns are prepared in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies ("AIC SORP").
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2018
Ordinary Capital
share Share Redemption Revaluation Capital Revenue
capital premium reserve reserve reserve account Total
GBP GBP GBP GBP GBP GBP GBP
Balance
at 1 July
2018 2,386,025 4,453,903 2,408,820 2,557,941 6,669,594 (1,142,190) 17,334,093
Total comprehensive
income
Net return
for the
period - - - - (1,399,688) 198,886 (1,200,802)
Transactions
with shareholders
recorded
directly
to equity
Ordinary
dividends
paid - - - - - (510,609) (510,609)
==================== ========= ========= =========== =========== =========== =========== ===========
Balance
at 31 December
2018 2,386,025 4,453,903 2,408,820 2,557,941 5,269,906 (1,453,913) 15,622,682
==================== ========= ========= =========== =========== =========== =========== ===========
Balance
at 1 July
2017 (restated) 2,386,025 4,453,903 2,408,820 2,557,941 6,569,061 (638,973) 17,736,777
Total comprehensive
income
Net return
for the
period - - - - 251,730 176,726 428,456
Transactions
with shareholders
recorded
directly
to equity
Ordinary
dividends
paid - - - - - (510,609) (510,609)
==================== ========= ========= =========== =========== =========== =========== ===========
Balance
at 31 December
2017 2,386,025 4,453,903 2,408,820 2,557,941 6,820,791 (972,856) 17,654,624
==================== ========= ========= =========== =========== =========== =========== ===========
Balance
at 1 July
2017 (restated) 2,386,025 4,453,903 2,408,820 2,557,941 6,569,061 (638,973) 17,736,777
Total comprehensive
income
Net return
for the
year - - - - 100,533 484,596 585,129
Transactions
with shareholders
recorded
directly
to equity
Ordinary
dividends
paid - - - - - (987,813) (987,813)
==================== ========= ========= =========== =========== =========== =========== ===========
Balance
at 30 June
2018 2,386,025 4,453,903 2,408,820 2,557,941 6,669,594 (1,142,190) 17,334,093
==================== ========= ========= =========== =========== =========== =========== ===========
CONDENSED CONSOLIDATED BALANCE SHEET
As at 31 December 2018
31 December
2017
(unaudited) 30 June 2018
31 December (unaudited)
Notes 2018 (unaudited) (restated) (restated)
GBP GBP GBP
Non-current assets
Investments 13,709,874 16,066,412 16,342,406
============================ ===== ================= ============ ============
Current assets
Derivative financial
instruments - 3,870 -
Trade and other receivables 169,936 479,302 265,341
Cash and bank balances 1,826,565 1,184,295 843,433
============================ ===== ================= ============ ============
1,996,501 1,667,467 1,108,774
============================ ===== ================= ============ ============
Current liabilities
Trade and other payables (83,693) (79,255) (117,087)
============================ ===== ================= ============ ============
Net current assets 1,912,808 1,588,212 991,687
============================ ===== ================= ============ ============
Net assets 15,622,682 17,654,624 17,334,093
============================ ===== ================= ============ ============
Capital and reserves
Issued ordinary share
capital 5 2,386,025 2,386,025 2,386,025
Share premium 4,453,903 4,453,903 4,453,903
Capital redemption reserve 2,408,820 2,408,820 2,408,820
Revaluation reserve 2,557,941 2,557,941 2,557,941
Capital reserve 5,269,906 6,820,791 6,669,594
Revenue reserve (1,453,913) (972,856) (1,142,190)
============================ ===== ================= ============ ============
Shareholders' funds 15,622,682 17,654,624 17,334,093
============================ ===== ================= ============ ============
NAV per 50p ordinary
share 6 327.38 369.96 363.24
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2018
31 December 31 December 30 June
2018 (unaudited) 2017 (unaudited)
2018
(audited)
GBP GBP GBP
Cash flows from operating
activities
Cash received from investments 335,085 449,975 920,760
Interest received 119,846 84 86
Sundry income - - 1,300
Investment management fees
paid (45,000) (28,513) (88,043)
Cash paid to and on behalf
of employees (1,167) (7,280) (14,000)
Other cash payments (146,137) (205,757) (369,197)
Tax recoverable (1,919) - -
Net cash inflow from operating
activities 260,708 208,509 450,906
================================= ================= ================= ===========
Cash flows from financing
activities
Dividends paid on ordinary
shares (510,609) (510,609) (987,813)
================================= ================= ================= ===========
Net cash outflow from financing
activities (510,609) (510,609) (987,813)
================================= ================= ================= ===========
Cash flows from investing
activities
Purchase of investments (2,321,667) (353,178) (5,655,702)
Sale of investments 3,554,758 573,191 5,771,848
Purchase of derivative financial
instruments - - -
================================= ================= ================= ===========
Net cash inflow from investing
activities 1,233,091 220,013 116,146
================================= ================= ================= ===========
Net increase/(decrease) in
cash and cash equivalents 983,190 (82,087) (420,761)
================================= ================= ================= ===========
Reconciliation of net cash
flow to movement in net cash
Increase/(decrease) in cash 983,190 (82,087) (420,761)
Exchange rate movements (58) (862) (3,050)
================================= ================= ================= ===========
Increase/(decrease) in net
cash 983,132 (82,949) (423,811)
Net cash at start of period 843,433 1,267,244 1,267,244
================================= ================= ================= ===========
Net cash at end of period 1,826,565 1,184,295 843,433
================================= ================= ================= ===========
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Significant accounting policies
Basis of preparation
The condensed consolidated financial statements, which comprise the unaudited results of the Company and its wholly owned subsidiaries, Abport Limited and New Centurion Trust Limited, together referred to as the "Group", have been prepared in accordance with IFRS, as adopted by the European Union, and as applied in accordance with the provisions of the Companies Act 2006. The financial statements have been prepared in accordance with the AIC SORP, except to any extent where it is not consistent with the requirements of IFRS. The accounting policies are as set out in the Report and Accounts for the year ended 30 June 2018.
The half-year financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The financial information contained in this half year financial report does not constitute statutory accounts as defined by the Companies Act 2006.The financial information for the periods ended 31 December 2018 and 31 December 2017 have not been audited or reviewed by the Company's Auditor. The figures and financial information for the year ended 30 June 2018 are an extract from the latest published audited statements, as restated pursuant to the transition to IFRS 9, and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and include a report of the Auditor, which was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.
Going concern
The Directors have made an assessment of the Group's ability to continue as a going concern and are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future (being a period of 12 months from the date these financial statements were approved). Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern, having taken into account the liquidity of the Group's investment portfolio and the Group's financial position in respect of its cash flows, borrowing facilities and investment commitments (of which there are none of significance).Therefore, the financial statements have been prepared on the going concern basis and on the basis that approval as an investment trust will continue to be met.
2. Income
31 December 31 December 30 June 2018
2018 (unaudited) 2017
(unaudited) (audited)
GBP GBP GBP
Income from investments
UK dividends 236,944 154,586 505,852
Un-franked dividend
income 25,583 59,023 96,066
UK Fixed interest 117,094 185,931 346,877
======================== ================= ============ ============
379,621 399,540 948,795
Other income
Bank deposit interest - 84 85
Underwriting commission - - 1,300
Net dealing gains of
subsidiaries (131) 4,008 6,093
======================== ================= ============ ============
Total income 379,490 403,632 956,273
======================== ================= ============ ============
3. Return per ordinary share
Returns per share are based on the weighted average number of shares in issue during the period. Normal and diluted return per share are the same as there are no dilutive elements on share capital.
6 months to 6 months to Year ended
31 December 2018 31 December 30 June 2018
2017
(unaudited) (unaudited) (audited)
(restated)
Net return Per share Net return Per share Net return Per share
GBP pence GBP pence GBP pence
Return on
total comprehensive
income
Revenue 198,886 4.17 176,726 3.70 484,596 10.16
Capital (1,399,688) (29.33) 251,730 5.28 100,533 2.11
===================== =========== ========= ========== ========= ========== =========
Total comprehensive
income (1,200,802) (25.16) 428,456 8.98 585,129 12.27
===================== =========== ========= ========== ========= ========== =========
Weighted average
number of
ordinary shares 4,772,049 4,772,049 4,772,049
4. Dividends per ordinary share
Amounts recognised as distributions to equity holders in the period.
6 months 6 months
to 31 December to 31 December
2018 2017
Year ended
30 June 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Ordinary shares
Prior year fourth interim
dividend of 5.70p paid
on 18 August 2017 - 272,007 272,007
Prior year first interim
dividend of 5.70p paid
on 17 November 2017 - 238,602 238,602
Prior year second interim
dividend of 5.00p paid
on 16 February 2018 - - 238,602
Prior year third interim
dividend of 5.00p paid
on 25 May 2018 - - 238,602
Prior year fourth interim
dividend of 5.70p paid
on 31 August 2018 272,007 - -
Current year first interim
dividend of 5.00p paid
on 23 November 2018 238,602 - -
Total income 510,609 510,609 987,813
=========================== =============== =============== =============
The Board declared a second interim dividend of 3.75p per ordinary share, which was paid on 13 February 2019 to shareholders registered at the close of business on 11 January 2019. This dividend has not been included as a liability in these financial statements.
5. Ordinary share capital
6 months to 6 months to Year ended
31 December 31 December 30 June 2018
2018 2017
(unaudited) (unaudited) (audited)
Number GBP Number GBP Number GBP
Ordinary shares
of 50p each 4,772,049 2,386,025 4,772,049 2,386,025 4,772,049 2,386,025
================== ========= ========= ========= ========= ========= =========
The Company does not hold any shares in treasury as at 31 December 2018 (31 December 2017: Nil and 30 June 2018: Nil).
6. Net asset value per ordinary share
Net asset value per ordinary share is based on net assets at the period end and 4,772,049 (31 December 2017: 4,772,049 and 30 June 2018: 4,772,049) ordinary shares in issue at the period end excluding shares held in treasury if any.
7. Investment Management fee
The management fee payable monthly in arrears by the Company to the Investment Manager, Fiske plc is calculated at the rate of one-twelfth of 0.75% per calendar month of the NAV of the Company, capped at GBP90,000 for the first twelve months. For these purposes, the NAV is calculated as at the last business day of each month.
At 31 December 2018 an amount of GBP7,500 (31 December 2017: GBP11,889 and 30 June 2018:
GBP7,500) was outstanding and due to the Investment Manager.
8. Fair value hierarchy
The fair value is the amount at which an asset could be sold in an ordinary transaction between market participants at the measurement date, other than a forced or liquidation sale. The Group measures fair values using the following hierarchy that reflects the significance of the inputs used in making the measurements.
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:
Level 1 - valued using quoted prices, unadjusted in active markets for identical assets and liabilities.
Level 2 - valued by reference to valuation techniques using observable inputs for the asset or liability other than quoted prices included in Level 1.
Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data for the asset or liability.
The table below sets out fair value measurement of financial instruments as at 31 December 2018, by the level in the fair value hierarchy into which the fair value measurement is categorised.
Level 1 Level Level Total
2 3
GBP GBP GBP GBP
At 31 December 2018
Financial assets at fair
value through profit and
loss 9,327,357 310,136 4,072,381 13,709,874
Total 9,327,357 310,136 4,072,381 13,709,874
================================= ========== ======= ========= ==========
At 31 December 2017 (restated)
Fixed asset investments
held by the Company 10,487,041 429,000 5,150,371 16,066,412
Derivative financial instruments 3,870 - - 3,870
================================= ========== ======= ========= ==========
Total 10,490,911 429,000 5,150,371 16,070,282
================================= ========== ======= ========= ==========
At 30 June 2018
Fixed asset investments
held by the Company 11,105,067 413,559 4,823,780 16,342,406
Total 11,105,067 413,559 4,823,780 16,342,406
================================= ========== ======= ========= ==========
The Company's subsidiary, Abport Limited, completes trading transactions. The value of the current asset investments held for trading is the expected price of realisation. The difference between the sale and purchase of assets is recognised as trading income in the Condensed Consolidated Statement of Comprehensive Income.
Reconciliation of Level 3 investments
The following table summarises Level 3 investments that were accounted for at fair value.
6 months
6 months ended 31 Year ended
ended 31 December 30 June 2018
December 2017 (unaudited) (unaudited)
2018 (unaudited) (restated (restated)
GBP GBP GBP
Opening balance 4,823,780 5,481,268 5,481,268
Movement in unrealised gains/(losses)
on investments at fair value
through profit or loss 228,596 (32,643) (274,408)
Realised (losses)/gains (306,957) 1,746 16,930
Sale proceeds (673,038) (300,000) (400,010)
====================================== ================= ================= =============
Closing balance 4,072,381 5,150,371 4,823,780
====================================== ================= ================= =============
9. Transactions with the Investment Manager and related parties
As disclosed in note 7 a fee is paid to the Investment Manager in respect of its service provided to the Company.
10. Transition to IFRS 9 Financial Instruments
IFRS 9 'Financial Instruments' is effective for periods beginning on or after 1 January 2018 and has been adopted by the Group in the year. IFRS 9 sets out requirements for recognising and measuring financial assets and financial liabilities and replaces IAS 39 'Financial Instruments: Recognition and Measurement'. The impact on the consolidated financial statements of the Group is detailed below.
Classification of financial assets
IFRS 9 contains a new classification and measurement approach for financial assets that reflects the business model in which assets are managed and the cash flow characteristics of the assets.
IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, fair value through other comprehensive income and fair value through profit or loss. The standard eliminates the existing IAS 39 categories of held to maturity, loans and receivables and available for sale. The new classification requirements do impact the accounting for the Group's financial assets.
Impairment of financial assets
IFRS 9 replaces the incurred loss model in IAS 39 with a forward-looking 'expected credit loss' model. The new impairment model will apply to financial assets measured at amortised cost. There is no impact on the values reported in the financial statements from adopting IFRS 9 in respect of expected credit losses.
Cash and cash equivalents
Cash and cash equivalents are held at banks with a strong credit rating and are not subject to any period of notice. The Group typically maintains a low value of cash and cash equivalents. There is no impact on the values reported in the financial statements from adopting IFRS 9 in respect of expected credit losses.
Classification of financial liabilities
IFRS 9 largely retains the existing requirements in IAS 39 for the classification of financial liabilities. The classification requirements of IFRS 9 do not impact the financial statements.
Transition
The impact on the financial statements from the adoption of IFRS 9 is detailed below.
6 months to
31 December Year ended
2017 30 June 2018
GBP GBP
Consolidated statement of
comprehensive income
Unrealised (losses)/gains
on investments held at fair
value through profit or loss 7,898 (644,268)
Movement in impairment provision
on investments held as available
for sale (14,295) 3,745
------------- --------------
(6,397) (640,523)
------------- --------------
Other comprehensive income
Movement in unrealised appreciation
on investments held as available
for sale
Recognised as equity (342,148) (30,134)
Recognised in return after
taxation 348,545 670,657
------------- --------------
6,397 640,523
------------- --------------
- -
Opening Reserves Adjustment
6 months to Year ended
31 December 30 June
2017 2018
GBP GBP
Consolidated Balance Sheet
and Consolidated Statement
of Changes in Equity
Capital and reserves
Revaluation Reserve 6,397 640,523
Capital Reserve (6,397) (640,523)
------------- --------------
- -
------------- --------------
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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