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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| New Star Investment Trust Plc | LSE:NSI | London | Ordinary Share | GB0002631041 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -0.87% | 114.00 | 111.00 | 117.00 | 114.00 | 114.00 | 114.00 | 0.00 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 4.74M | 3.25M | 0.0457 | 24.95 | 80.97M |
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TIDMNSI
NEW STAR INVESTMENT TRUST PLC
This announcement constitutes regulated information.
UNAUDITED RESULTS
FOR THE YEARED 30TH JUNE 2018
New Star Investment Trust plc (the 'Company'), whose objective is to achieve
long-term capital growth, announces its consolidated results for the year ended
30th June 2018.
FINANCIAL HIGHLIGHTS
30th June 30th June %
2018 2017 Change
PERFORMANCE
Net assets (GBP '000) 111,366 105,056 6.0
Net asset value per Ordinary share 156.80p 147.92p 6.0
Mid-market price per Ordinary share 113.00p 105.00p 7.6
Discount of price to net asset value 27.9% 29.0% n/a
Total Return* 6.5% 17.9% n/a
IA Mixed Investment 40% - 85% Shares (total 4.9% 16.5% n/a
return)
MSCI AC World Index (total return, sterling 9.5% 22.9% n/a
adjusted)
MSCI UK Index (total return) 8.3% 16.7% n/a
1st July 2017 to 1st July 2016 to
30th June 2018 30th June 2017
Revenue return per Ordinary share 1.17p 1.14p
Capital return per share 8.51p 21.38p
Return per Ordinary share 9.68p 22.52p
Dividend per Ordinary share 0.80p 0.30p
TOTAL RETURN* 10.48p 22.82p
(6.5%) (17.9%)
PROPOSED DIVID PER ORDINARY SHARE 1.00p 0.80p
* The total return figure for the Group represents the revenue and capital
return shown in the consolidated statement of Comprehensive income plus
dividends paid (the Alternative performance measure).
CHAIRMAN'S STATEMENT
PERFORMANCE
Your Company's net asset value (NAV) total return was 6.5% over the year to
30th June 2018. This took the year-end NAV per ordinary share to 156.80p. By
comparison, the Investment Association's Mixed Investment 40-85% Shares index
gained 4.9%. Your Directors believe this benchmark is appropriate because your
Company has, since inception, been invested in a broad range of asset classes.
Equity markets generated positive returns, with UK performance weaker than
overseas performance principally as a result of concerns about the outcome of
the UK's Brexit negotiations with the European Union. The MSCI AC World Total
Return and MSCI UK Total Return Indices gained 9.5% and 8.3% respectively while
UK government bonds returned 2.0%. Further information is provided in the
investment manager's report.
EARNINGS AND DIVID
The revenue return for the year was 1.17p per share (2017: 1.14p).
Your Company has a revenue surplus in its retained revenue reserve, enabling it
to pay a dividend. Your directors recommend the payment of a final dividend in
respect of the year of 1.0p per share (2017: 0.8p).
OUTLOOK
Uncertainty over the outcome of trade skirmishes between the US and China may
play a significant role in determining investor sentiment over the coming
months, with markets remaining volatile and capital flight from emerging
markets into the dollar continuing. A swift resolution of the dispute, however,
most likely by Beijing agreeing to reduce its trade surplus and ease
restrictions on US companies operating in China, could be a buying opportunity
for some riskier asset classes.
Strong consumer and business confidence, relatively low interest rates, Trump's
fiscal stimulus and technology leadership may continue to underpin US equities.
The longevity of the rise in share prices since the nadir of 2008 has, however,
led some investors to suggest a correction is likely. Your Company has
responded to high US equity valuations and low bond yields by focussing on
cheaper markets in Europe, where monetary policy is likely to remain relatively
loose for longer than in the US. If, however, inflation and interest rates rise
more rapidly than anticipated, generating falls for equities and bonds, your
Company's investments in dollars, gold equities and lower-risk multi-asset
funds should prove defensive.
CASH AND BORROWINGS
Your Company has no borrowings and ended its financial year with cash
representing 13.5% of its net asset value. Your Company is likely to maintain a
significant cash position.
The Company is a small registered Alternative Investment Fund Manager under the
European Union directive. The Company's assets now exceed the threshold of 100
million euros. As a result, should it wish to borrow it would require a change
in regulatory permissions.
DISCOUNT
During the year under review, your Company's shares continued to trade at a
significant, albeit narrowing, discount to their NAV. Your directors have
discussed various options with a view to reducing this discount but no
satisfactory solution has yet been found. The Board, however, keeps this issue
under continual review.
BOARD CHANGES
Following a vote by shareholders at the last annual meeting, we have been
pleased to welcome David Gamble as a Director of your Company. David was chief
executive of British Airways Pension Investment Management from 1993 to 2004.
He has also served as a director of numerous financial services companies
including a number of investment companies.
ANNUAL MEETING
The Annual General Meeting will be held on Thursday, 15th November 2018 at
11am.
NET ASSET VALUE
Your Company's unaudited net asset value per share at 31st August 2018 was
158.98p.
INVESTMENT MANAGER'S REPORT
MARKET REVIEW
In 2015, when Donald Trump said he would run for the US presidency, he
reiterated traditional Republican pledges to reduce taxes and regulation. In a
departure, however, from previous Republican campaigns, he also said he would
tackle America's trade imbalances with countries such as China and Mexico
through renegotiating trade deals and, if necessary, imposing tariffs. He said
he was "a free trader" but added that America needed "really talented" people
to negotiate for it to "take the brand of the United States and make it great
again".
In 2018, Trump has set out to recast Sino-US trade relations, targeting the
trade imbalance, which reached $375 billion in 2017, and the uneven playing
field US companies face when operating in China, including threats to their
intellectual property and state subsidies. In March, Trump's opening salvo
included steel and aluminium tariffs affecting $60 billion of US imports from
China. US steel shares rose in response and rust-belt voters assessing Trump's
performance relative to his "made in America" pledges may show their approval
in November's mid-term elections.
In June, Trump introduced tariffs on a further $50 billion of China's exports,
equivalent to a tenth of its $500 billion of exports to the US in 2017. Beijing
retaliated, imposing tariffs on US exports of equal value. In July, Trump
announced tariffs on a further $200 billion of Chinese exports although these
measures will not be enforced until later after a period of consultation. If,
however, a settlement is not reached, approximately 50% of China's exports to
the US will face higher tariffs.
It may be easier for the Chinese to import more goods than yield on
intellectual property and subsidies because Beijing wants to shift China's
economy from low-margin goods to products with greater added value. In 2015,
Beijing launched its "made in China 2025" initiative, aiming for greater
self-sufficiency in sectors such as robotics, semi-conductors and electric
vehicles. China has, however, shown willingness to negotiate, saying it would
end the requirement for US motor companies to operate through joint ventures
with local partners.
Trump's tariffs may bring Beijing to the negotiating table but any gain for
American manufacturers may be more than offset by higher consumer prices and
lower consumer spending. Beijing, meanwhile, may seek to protect its economy by
easing monetary policy. In April, it cut its reserve requirement ratio to
encourage lending and soften the impact of public and private sector
deleveraging. Chinese export competitiveness increased as the yuan weakened
against the dollar in the second quarter of 2018.
The dollar also rose against other currencies because of rising US inflation
and interest rates and near-full employment. In July 2018, headline inflation
was 2.4%, its highest level in almost a decade and significantly above the
Federal Reserve's 2% target. The Federal Open Market Committee raised interest
rates three times during the Company's financial year, taking them to a
1.75-2.0% range, and may soon raise rates further. In July, unemployment was
3.9%, a level the Fed believes will generate wage-push inflation. In the early
autumn, there were, however, few signs that US monetary policy had become
restrictive and the comparatively low pick-up in bond yields suggested
investors did not think interest rates would rise sharply over the longer term.
US businesses and consumers are benefiting from Trump's Tax Cuts and Jobs Act.
The cut in the top rate of corporate tax from 35% to a 21% flat rate lowered
the hurdle rate of return for corporate capital spending. Changes facilitating
the repatriation of cash from abroad increased capital available for
investment. Consumers benefit from rationalised tax brackets, lower business
income taxes and changes to benefits and allowances. US equities were buoyed
during the year under review by economic growth and improved profits, with a
majority of US companies in the quarter to June reporting sales and profits
ahead of analysts' expectations.
Sterling ended the year under review slightly higher against the dollar despite
retreating in the final quarter. UK equities also made gains but underperformed
global equities because of fears of an unfavourable Brexit deal and the
leftwards shift in UK politics. The Bank of England raised interest rates in
November 2017 and August 2018 but the rises may be reversed if there is
post-Brexit dislocation. If, however, Britain secures unexpectedly good Brexit
terms, interest rates may rise faster than expected as the Bank responds to
near-full employment and steady economic growth. This is because UK monetary
conditions looked accommodative over the summer, with inflation at 2.4% in
July, having been above the Bank's 2% target since February 2017.
A trade war would damage European countries such as Germany, whose exports
represented 37% of its economy in 2017 against 8% for the US. Equities in
Europe excluding the UK underperformed global equities during the financial
year as investors weighed Europe's vulnerability to tariffs and Italy's
election of a Eurosceptic government. Higher inflation confirmed the European
Central Bank in its plan to end asset purchases in late 2018 although interest
rates may not rise until late 2019. Eurozone unemployment at 8.2% and incipient
wage growth may result in gradual monetary tightening.
Some emerging markets suffered from capital flight as investors responded to
trade tensions and dollar strength. Emerging market bonds fell in sterling
while equities in Asia excluding Japan and emerging markets lagged global
equities. Investor sentiment was also affected by the Turkish and Argentinian
currency crises.
PORTFOLIO REVIEW
Your Company's total return for the year was 6.50%. This compares with a 4.94%
rise in the Investment Association's Mixed Investment 40-85% Shares Index,
whose constituent funds have a multi-asset approach, with typically 40-85% of
their assets in equities. The MSCI AC World Total Return Index gained 9.51% in
sterling while the MSCI UK Total Return Index rose 8.31%. Global bonds fell
0.28% in sterling while UK government bonds and sterling corporate bonds
returned 2.0% and 0.37% respectively.
US equities outperformed, rising 12.53% in sterling. Your Company had a
relatively low direct US allocation because American stocks appeared highly
valued and this was further reduced through the sale of the iShares S&P 500
exchange-traded fund (ETF) in November 2017. The iShares S&P Financials ETF
holding underperformed, rising 9.29%, but Polar Capital Technology, which has
significant US holdings, was the portfolio's best performer, rising 30.05%. At
the year end, Polar Capital Technology had a fifth of its portfolio in sector
leaders such as Alphabet, which owns Google, and Microsoft, while also
focussing on small and medium-sized companies with new, potentially disruptive
technologies. This approach produced strong returns relative to its benchmark.
The US stockmarket did well in sterling despite the dollar's 1.61% fall against
the pound. The dollar did, however, recover during the final quarter as Brexit
fears weighed on sterling. The lack of clarity regarding Brexit and rising
political risk following two cabinet resignations are strong arguments in
favour of maintaining significant foreign currency assets in the portfolio. At
the year end, the majority of the Company's cash was in dollars.
Among the global equity holdings, Polar Capital Technology was not alone in
benefitting from its US holdings. Fundsmith Equity, where partial profits were
taken in November 2017, gained 15.18%. Profits were also taken from the sale of
Newton Global Income in May 2018. The higher-yielding Artemis Global Income
holding lagged, however, rising 8.66%.
The Company's largest investment, FP Crux European, rose 2.92%, marginally
outperforming the 2.70% gain from Europe excluding UK equities in sterling.
Standard Life European Income underperformed, however, returning 1.38%.
Investment in higher-yielding funds increased in November through the addition
of Blackrock European Income.
In the UK, Man GLG UK Income outperformed, rising 13.47%, but the
conservatively-managed Trojan Income holding fell 1.02%. UK equities ended the
year relatively lowly valued and the market dividend yield looked attractive to
income-seeking investors. UK larger companies may perform well if Brexit drives
down sterling, with currency weakness enhancing their export competitiveness
and the profits of their overseas operations on translation. Schroder Income,
which holds stocks with "value" characteristics including high dividend yields,
was added to the portfolio in May.
Smaller UK companies rose 7.64%, underperforming larger peers because of their
domestic focus, which leaves them vulnerable to a poor outcome to the Brexit
talks. Aberforth Split Level Income, which holds smaller stocks, rose just
0.71% but MI Brompton UK Recovery outperformed, rising 10.02%.
Equities in Asia excluding Japan and emerging markets rose 8.43% and 6.84%
respectively in sterling but Liontrust Asia Income underperformed, rising
4.29%. Wells Fargo China was sold in favour of JP Morgan Emerging Market Income
while Neptune Russia was replaced by the HSBC MSCI Russia Capped ETF. Russian
equities outperformed, rising 24.29% as oil prices increased 57.46% in sterling
terms, and Russia's market remained relatively resilient after the financial
year end despite US sanctions.
Indian equities rose 4.76% in sterling despite the rupee's 7.18% fall. Stewart
Indian Subcontinent outperformed, rising 11.09%. In response to high
valuations, its manager bought more lowly-valued Indian information technology
stocks as well as less well-researched stocks in Sri Lanka and Bangladesh.
Gold fell 1.41% in sterling as interest rate rises decreased the attraction of
this nil-yielding asset and Blackrock Gold & General fell 9.88%. The
potentially defensive characteristics of gold and gold shares, however, provide
an important source of diversification to the portfolio given its minimal bond
holdings.
Within the portfolio's private equity holdings, which accounted for 4.83% of
assets at 30th June 2018, one company made a GBP2.8 million capital distribution
to your Company following a disposal. The investment in the ongoing business
was retained. Increased investments in Embark and another private equity
investment were made and one new holding was added.
The focus on income-focused equity funds and interest income from the Company's
dollar deposits has required the Company to pay an increased dividend.
OUTLOOK
Since Adam Smith wrote "An Inquiry into the Nature and Causes of the Wealth of
Nations", most economists have supported free trade. Milton Friedman said
import tariffs and export subsidies were "an indirect and concealed form of
devaluation", a form of protectionism that served to "protect" consumers from
low prices. It is, therefore, unsurprising that the Chinese responded to US
tariffs with retaliatory tariffs and devaluation. Trump's protectionist
rhetoric may in reality be an attempt to push China into buying more US goods
and easing restrictions on US companies seeking to expand there, not a
rejection of free trade principles. In the meantime, markets may remain
volatile and capital flight from emerging markets into the dollar may continue.
A swift resolution to the US-China trade dispute may in time confirm the recent
sell-off in some markets as a buying opportunity. Over the longer term, a
Chinese economic slowdown may be more concerning than the trade spat as Chinese
policy makers seek to reduce public and private indebtedness.
Despite high valuations, US equities may be supported by strong consumer and
business confidence, supportive monetary policy and Trump's fiscal stimulus. US
superiority in sectors such as technology has also driven some stocks higher.
The rise in US equities after the 2008 credit crisis has been one of the
longest bull markets in history, causing investors to question how long the
gains can continue. The Company has significant holdings in more lowly-valued
markets where monetary policy is likely to remain accommodative for longer such
as in Europe excluding the UK and, potentially, the UK, where sentiment may
have become overly negative because of Brexit.
In July 2018, inflation was above central bank targets in the US, UK and the
Eurozone, and central banks were reversing, or on course to reverse, the
exceptionally loose conditions of recent years. This may generate falls for
global bonds. Monetary policy has not, however, been restrictive and this may
support global equities. If inflation and interest rates rise more rapidly than
anticipated, generating falls for equities and bonds, the Company's investments
in dollars, gold equities and lower-risk multi-asset funds should prove
defensive.
SCHEDULE OF TWENTY LARGEST INVESTMENTS AT 30TH JUNE 2018
Holding Activity Bid-market Percentage of
value net assets
GBP '000
FP Crux European Special Situations Investment Fund 10.09
Fund 11,237
Polar Capital - Global Technology Investment Fund 4.91
Fund 5,473
Schroder Income Fund Investment Fund 4.71
5,242
Fundsmith Equity Fund Investment Fund 4.66
5,191
Aberforth Split Level Income Trust Investment Company 4.36
4,859
Artemis Global Income Fund Investment Fund 3.70
4,120
EF Brompton Global Conservative Fund Investment Fund 3.69
4,105
BlackRock Continental European Income Investment Fund 3.32
Fund 3,699
Aquilus Inflection Fund Investment Fund 3.20
3,562
Lindsell Train Japanese Equity Fund Investment Fund 2.97
3,312
Embark Group Unquoted Investment 2.93
3,268
Man GLG UK Income Fund Investment Fund 2.63
2,929
BlackRock Gold & General Fund Investment Fund 2.61
2,904
EF Brompton Global Opportunities Fund Investment Fund 2.50
2,785
Liontrust Asia Income Fund Investment Fund 2.49
2,768
MI Brompton UK Recovery Unit Trust Investment Fund 2.47
2,746
Stewart Investors Indian Subcontinent Investment Fund 2.43
Fund 2,706
EF Brompton Global Equity Fund Investment Fund 2.41
2,687
EF Brompton Global Growth Fund Investment Fund 2.36
2,630
Trojan Income Fund Investment Fund 2,384 2.14
78,607 70.58
Balance not held in 20 investments 17,694 15.89
above
Total investments (excluding cash) 96,301 86.47
Cash 15,027 13.49
Other net current assets 38 0.04
Net assets 111,366 100.00
The investment portfolio, excluding cash, can be further
analysed as follows:
GBP '000
Investment funds 80,548
Investment companies and exchange traded 9,357
funds
Unquoted investments, including interest 5,375
bearing loans of GBP250,000
Other quoted investments 1,021
96,301
SCHEDULE OF TWENTY LARGEST INVESTMENTS AT 30TH JUNE 2017
Holding Activity Bid-market Percentage of
value net assets
GBP '000
FP Crux European Special Situations Investment Fund 10,918 10.39
Fund
Fundsmith Equity Fund Investment Fund 9,014 8.58
Newton Global Income Fund Investment Fund 5,524 5.26
Aberforth Split Level Income Trust Investment Company 4,898 4.66
Polar Capital - Global Technology Investment Fund 4,208 4.01
Fund
EF Brompton Global Conservative Fund Investment Fund 4,014 3.82
Artemis Global Income Fund Investment Fund 3,930 3.74
Aquilus Inflection Fund Investment Fund 3,364 3.20
BlackRock Gold & General Fund Investment Fund 3,223 3.07
Embark Group Unquoted Investment 3,130 2.98
Liontrust Asia Income Fund Investment Fund 2,777 2.64
Man GLG UK Income Fund Investment Fund 2,732 2.60
Lindsell Train Japanese Equity Fund Investment Fund 2,694 2.56
EF Brompton Global Opportunities Fund Investment Fund 2,652 2.53
EF Brompton Global Growth Fund Investment Fund 2,515 2.39
EF Brompton Global Equity Fund Investment Fund 2,508 2.39
MI Brompton UK Recovery Trust Investment Fund 2,496 2.38
Trojan Income Fund Investment Fund 2,449 2.33
Stewart Investors Indian Subcontinent Investment Fund 2,436 2.32
Fund
EF Brompton Global Income Fund Investment Fund 2,215 2.11
77,697 73.96
Balance not held in 20 investments 14,033 13.36
above
Total investments (excluding cash) 91,730 87.32
Cash 13,451 12.80
Other net current assets (125) (0.12)
Net assets 105,056 100.00
The investment portfolio, excluding cash, can be further
analysed as follows:
GBP '000
Investment funds 78,326
Investment companies and exchange traded 7,920
funds
Unquoted investments, including interest 4,810
bearing loans of GBP250,000
Other quoted investments 674
91,730
STRATEGIC REVIEW
The Strategic Review is designed to provide information primarily about the
Company's business and results for the year ended 30th June 2018. The Strategic
Review should be read in conjunction with the Chairman's Statement and the
Investment Manager's Report, which provide a review of the year's investment
activities of the Company and the outlook for the future.
STATUS
The Company is an investment company under section 833 of the Companies Act
2006. It is an Approved Company under the Investment Trust (Approved Company)
(Tax) Regulations 2011 (the 'Regulations') and conducts its affairs in
accordance with those Regulations so as to retain its status as an investment
trust and maintain exemption from liability to United Kingdom capital gains
tax.
The Company is a small registered Alternative Investment Fund Manager under the
European Union Markets in Financial Instruments Directive.
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company's investment objective is to achieve long-term capital growth.
Investment Policy
The Company's investment policy is to allocate assets to global investment
opportunities through investment in equity, bond, commodity, real estate,
currency and other markets. The Company's assets may have significant
weightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds,
futures, options, limited partnerships and direct investments in relevant
markets. The Company may invest up to 15% of its net assets in direct
investments in relevant markets.
The Company will not follow any index with reference to asset classes,
countries, sectors or stocks. Aggregate asset class exposure to any one of the
United States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan or
Emerging Markets and to any individual industry sector will be limited to 50%
of the Company's net assets, such values being assessed at the time of
investment and for funds by reference to their published investment policy or,
where appropriate, the underlying investment exposure.
The Company may invest up to 20% of its net assets in unlisted securities
(excluding unquoted pooled investment vehicles) such values being assessed at
the time of investment.
The Company will not invest more than 15% of its net assets in any single
investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used for
the purposes of efficient portfolio management and currency hedging.
Derivatives may also be used outside of efficient portfolio management to meet
the Company's investment objective. The Company may take outright short
positions in relation to up to 30% of its net assets, with a limit on short
sales of individual stocks of up to 5% of its net assets, such values being
assessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or
long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company's total assets may
be invested in other closed-ended investment funds except where such funds have
themselves published investment policies to invest no more than 15% of their
total assets in other listed closed-ended investment funds.
Information on the Company's portfolio of assets with a view to spreading
investment risk in accordance with its investment policy is set out above.
FINANCIAL REVIEW
Net assets at 30th June 2018 amounted to GBP111,366,000 compared with GBP
105,056,000 at 30th June 2017. In the year under review, the NAV per Ordinary
share increased by 6.0% from 147.92p to 156.80p, after paying a dividend of
0.8p per share.
The Group's gross revenue rose to GBP1,776,000 (2017: GBP1,715,000). Last year the
Company decided to increase its investment in income focused funds resulting in
an increase in gross income during the year under review. After deducting
expenses and taxation the revenue profit for the year was GBP831,000 (2017: GBP
810,000).
Total expenses for the year amounted to GBP940,000 (2017: GBP898,000). In the year
under review the investment management fee amounted to GBP668,000 (2017: GBP
622,000). No performance fee was payable in respect of the year under review as
the Company has not outperformed the cumulative hurdle rate. At 30 June 2018
the hurdle rate NAV was slightly above the Company's NAV. Further details on
the Company's expenses may be found in notes 3 and 4.
Dividends have not formed a central part of the Company's investment
objective. The increased investment in income focused funds has enabled the
Directors to declare an increased dividend. The Directors propose a final
dividend of 1.0p per Ordinary share in respect of the year ended 30th June 2018
(2017: 0.8p). If approved at the Annual General Meeting, the dividend will be
paid on 30th November 2018 to shareholders on the register at the close of
business on 16th November 2018 (ex-dividend 15th November 2018).
The primary source of the Company's funding is shareholder funds.
While the future performance of the Company is dependent, to a large degree, on
the performance of international financial markets, which in turn are subject
to many external factors, the Board's intention is that the Company will
continue to pursue its stated investment objective in accordance with the
strategy outlined above. Further comments on the short-term outlook for the
Company are set out in the Chairman's Statement and the Investment Manager's
report.
Throughout the year the Group's investments included seven funds managed by the
Investment Manager (2017: seven). No investment management fees were payable
directly by the Company in respect of these investments.
PERFORMANCE MEASUREMENT AND KEY PERFORMANCE INDICATORS
In order to measure the success of the Company in meeting its objectives, and
to evaluate the performance of the Investment Manager, the Directors review at
each meeting: net asset value, income and expenditure, asset allocation and
attribution, share price of the Company and the discount. The Directors take
into account a number of different indicators as the Company does not have a
formal benchmark.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks identified by the Board, and the steps the Board takes to
mitigate them, are as follows:
Investment strategy
Inappropriate long-term strategy, asset allocation and fund selection could
lead to underperformance. The Board discusses investment performance at each
of its meetings and the Directors receive reports detailing asset allocation,
investment selection and performance.
Business conditions and general economy
The Company's future performance is heavily dependent on the performance of
different equity and currency markets. The Board cannot mitigate the risks
arising from adverse market movements. However, diversification within the
portfolio will reduce the impact. Further information is given in portfolio
risks below.
Portfolio risks - market price, foreign currency and interest rate risks
Investment returns will be influenced by interest rates, inflation, investor
sentiment, availability/cost of credit and general economic conditions in the
UK and globally. A proportion of the portfolio is in investments denominated
in foreign currencies and movements in exchange rates could significantly
affect their sterling value. The Investment Manager takes all these factors
into account when making investment decisions but the Company does not normally
hedge against foreign currency movements. The Board's policy is to hold a
spread of investments in order to reduce the impact of the risks arising from
the above factors by investing in a spread of asset classes and geographic
regions.
Net asset value discount
The discount in the price at which the Company's shares trade to net asset
value means that shareholders cannot realise the real underlying value of their
investment. Over the last few years the Company's share price has been at a
significant discount to the Company's net asset value. The Directors review
regularly the level of discount, however given the investor base of the
Company, the Board is very restricted in its ability to influence the discount
to net asset value.
Investment Manager
The quality of the team employed by the Investment Manager is an important
factor in delivering good performance and the loss of key staff could adversely
affect returns. A representative of the Investment Manager attends each Board
meeting and the Board is informed if any major changes to the investment team
employed by the Investment Manager are proposed.
Tax and regulatory risks
A breach of The Investment Trust (Approved Company) (Tax) Regulations 2011 (the
'Regulations') could lead to capital gains realised within the portfolio
becoming subject to UK capital gains tax. A breach of the UKLA Listing Rules
could result in suspension of the Company's shares, while a breach of company
law could lead to criminal proceedings, financial and/or reputational damage.
The Board employs Brompton Asset Management LLP as Investment Manager, and
Maitland Administration Services Limited as Secretary and Administrator, to
help manage the Company's legal and regulatory obligations.
Operational
Disruption to, or failure of, the Investment Manager's or Administrator's
accounting, dealing or payment systems, or the Custodian's records, could
prevent the accurate reporting and monitoring of the Company's financial
position. The Company is also exposed to the operational risk that one or more
of its suppliers may not provide the required level of service.
The Directors confirm that they have carried out an assessment of the risks
facing the Company, including those that would threaten its business model,
future performance, solvency and liquidity.
VIABILITY STATEMENT
The assets of the Company consist mainly of securities that are readily
realisable or cash and it has no significant liabilities. Investment income
exceeds annual expenditure and current liquid net assets cover current annual
expenses for many years. Accordingly, the Company is of the opinion that it
has adequate financial resources to continue in operational existence for the
long term which is considered to be in excess of five years. Five years is
considered a reasonable period for investors when making their investment
decisions. In reaching this view the Directors reviewed the anticipated level
of annual expenditure against the cash and liquid assets within the portfolio.
The Directors have also considered the risks the Company faces.
ENVIRONMENTAL, SOCIAL AND COMMUNITY ISSUES
The Company has no employees, with day-to-day management and administration of
the Company being delegated to the Investment Manager and the Administrator.
The Company's portfolio is managed in accordance with the investment objective
and policy; environmental, social and community matters are considered to the
extent that they potentially impact on the Company's investment returns.
Additionally, as the Company has no premises, properties or equipment, it has
no carbon emissions to report on.
The Company has sought, wherever possible, and been provided with assurance
from each of its main suppliers, that no slaves, forced labour, child labour,
or labour employed at rates of pay below statutory minimums for the country of
their operations, are being employed in the provision of services to the
Company.
GER DIVERSITY
The Board of Directors comprises three male directors. The Board recognises
the benefits of diversity, however, the Board's primary consideration when
appointing new directors is their knowledge, experience and ability to make a
positive contribution to the Board's decision making regardless of gender.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AT 30TH JUNE 2018
Year ended Year ended
30th June 2018 30th June 2017
Revenue Capital Revenue Capital
Return Return Total Return Return Total
Notes GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
INVESTMENT INCOME 2 1,654 - 1,654 1,686 - 1,686
Other operating income 2 122 - 122 29 - 29
1,776 - 1,776 1,715 - 1,715
GAINS AND LOSSES ON
INVESTMENTS
Gains on investments at
fair value through profit 9 - 6,218 6,218 - 14,814 14,814
or loss
Other exchange (losses)/ - (176) (176) - 367 367
gains
Trail rebates - 5 5 - 4 4
1,776 6,047 7,823 1,715 15,185 16,900
EXPENSES
Management fees 3 (668) - (668) (622) - (622)
Other expenses 4 (272) - (272) (276) - (276)
(940) - (940) (898) - (898)
PROFIT BEFORE TAX 836 6,047 6,883 817 15,185 16,002
Tax 5 (5) - (5) (7) - (7)
PROFIT FOR THE YEAR 831 6,047 6,878 810 15,185 15,995
EARNINGS PER SHARE
Ordinary shares (pence) 7 1.17p 8.51p 9.68p 1.14p 21.38p 22.52p
The total column of this statement represents the Group's profit and loss
account, prepared in accordance with IFRS, as adopted by the European Union.
The supplementary Revenue Return and Capital Return columns are both prepared
under guidance published by the Association of Investment Companies. All
revenue and capital items in the above statement derive from continuing
operations.
The Company did not have any income or expense that was not included in 'Profit
for the year'. Accordingly, the 'Profit for the year' is also the 'Total
comprehensive income for the year', as defined in IAS1 (revised) and no
separate Statement of Comprehensive Income has been presented.
No operations were acquired or discontinued during the year.
All income is attributable to the equity holders of the parent company. There
are no minority interests.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30TH JUNE 2018
Note Share Share Special Retained
capital premium reserve earnings Total
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
AT 30TH JUNE 2017 710 21,573 56,908 25,865 105,056
Total comprehensive income for the - - - 6,878 6,878
year
Dividend paid 8 - - - (568) (568)
AT 30TH JUNE 2018 710 21,573 56,908 32,175 111,366
Included within Retained earnings were GBP1,112,000 of Company reserves available
for distribution.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 30TH JUNE 2017
Note Share Share Special Retained
capital premium reserve earnings Total
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
AT 30TH JUNE 2016 710 21,573 56,908 10,083 89,274
Total comprehensive income for the - - - 15,995 15,995
year
Dividend paid 8 - - - (213) (213)
AT 30TH JUNE 2017 710 21,573 56,908 25,865 105,056
Included within Retained earnings were GBP851,000 of Company reserves available
for distribution.
CONSOLIDATED BALANCE SHEET AT 30TH JUNE 2018
Notes 30th June 30th June
2018 2017
GBP '000 GBP '000
NON-CURRENT ASSETS
Investments at fair value through profit or loss 9 96,301 91,730
CURRENT ASSETS
Other receivables 11 272 85
Cash and cash equivalents 12 15,027 13,451
15,299 13,536
TOTAL ASSETS 111,600 105,266
CURRENT LIABILITIES
Other payables 13 (234) (210)
TOTAL ASSETS LESS CURRENT LIABILITIES 111,366 105,056
NET ASSETS 111,366 105,056
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Called-up share capital 14 710 710
Share premium 15 21,573 21,573
Special reserve 15 56,908 56,908
Retained earnings 15 32,175 25,865
TOTAL EQUITY 111,366 105,056
NET ASSET VALUE PER ORDINARY SHARE 16 156.80p 147.92p
CONSOLIDATED CASH FLOW STATEMENTS AT 30TH JUNE 2018
Year ended Year ended
30th June 30th June
2018 2017
Group Group
Notes GBP '000 GBP '000
NET CASH INFLOW FROM OPERATING ACTIVITIES
673 808
INVESTING ACTIVITIES
Purchase of investments (16,016) (6,500)
Sale of investments 17,663 9,051
NET CASH INFLOW/(OUTFLOW) FROM INVESTING
ACTIVITIES 1,647 2,551
FINANCING
Equity dividends paid 8 (568) (213)
NET CASH INFLOW/(OUTFLOW) AFTER FINANCING
(568) (213)
INCREASE IN CASH 1,752 3,146
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN CASH & CASH EQUIVALENTS
Increase in cash resulting from cash flows 1,752 3,146
Exchange movements (176) 367
Movement in net funds 1,576 3,513
Net funds at start of the year 13,451 9,938
CASH & CASH EQUIVALENTS AT OF YEAR 17 15,027 13,451
RECONCILIATION OF PROFIT BEFORE FINANCE
COSTS AND TAXATION TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Profit before finance costs and taxation 2 6,883 16,002
Gains on investments (6,218) (14,814)
Exchange differences 176 (367)
Capital trail rebates (5) (4)
Net revenue gains before finance costs and
taxation 836 817
Increase in debtors (187) (18)
Increase in creditors 24 24
Taxation (5) (19)
Capital trail rebates 5 4
NET CASH INFLOW FROM OPERATING ACTIVITIES 673 808
NOTES TO THE ACCOUNTS FOR THE YEARED 30TH JUNE 2018
1. ACCOUNTING POLICIES
The financial statements have been prepared in accordance with International
Financial Reporting Standards ('IFRS'). These comprise standards and
interpretations approved by the International Accounting Standards Board
('IASB'), together with interpretations of the International Accounting
Standards and Standing Interpretations Committee ('IASC') that remain in
effect, and to the extent that they have been adopted by the European Union.
These financial statements are presented in pounds sterling, the Group's
functional currency, being the currency of the primary economic environment in
which the Group operates, rounded to the nearest thousand.
(a) Basis of preparation: The financial statements have been prepared on a
going concern basis. The principal accounting policies adopted are set out
below.
Where presentational guidance set out in the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies and Venture Capital Trusts'
('SORP') issued by the Association of Investment Companies ('AIC') in November
2014 and updated in February 2018 with consequential amendments is consistent
with the requirements of IFRS, the Directors have sought to prepare the
financial statements on a basis compliant with the recommendations of
the SORP.
(b) Basis of consolidation: The consolidated financial statements include the
accounts of the Company and its subsidiary made up to 30th June 2018. No
statement of comprehensive income is presented for the parent company as
permitted by Section 408 of the Companies Act 2006.
The parent company is an investment entity as defined by IFRS 10 and assets are
held at their fair value. The consolidated accounts include subsidiaries which
are an integral part of the Group and not investee companies.
Subsidiaries are consolidated from the date of their acquisition, being the
date on which the Company obtains control, and continue to be consolidated
until the date that such control ceases. The financial statements of the
subsidiary used in the preparation of the consolidated financial statements are
based on consistent accounting policies. All intra-group balances and
transactions, including unrealised profits arising therefrom, are eliminated.
Subsidiaries are valued at fair value, which is considered to be their NAV in
the accounts of the Company.
(c) Presentation of Statement of Comprehensive Income: In order to better
reflect the activities of an investment trust company and in accordance with
guidance issued by the AIC, supplementary information which analyses the
consolidated statement of comprehensive income between items of a revenue and
capital nature has been presented alongside the consolidated statement of
comprehensive income.
In accordance with the Company's Articles of Association, net capital returns
may not be distributed by way of a dividend. Additionally, the net revenue
profit is the measure the Directors believe is appropriate in assessing the
Group's compliance with certain requirements set out in the Investment Trust
(Approved Company) (Tax) Regulations 2011.
(d) Use of estimates: The preparation of financial statements requires the
Group to make estimates and assumptions that affect items reported in the
consolidated and company balance sheets and consolidated statement of
comprehensive income and the disclosure of contingent assets and liabilities at
the date of the financial statements. Although these estimates are based on
the Directors' best knowledge of current facts, circumstances and, to some
extent, future events and actions, the Group's actual results may ultimately
differ from those estimates, possibly significantly. The most significant
estimate relates to the valuation of unquoted investments.
(e) Revenue: Dividends and other such revenue distributions from investments
are credited to the revenue column of the consolidated statement of
comprehensive income on the day in which they are quoted ex-dividend. Where
the Company has elected to receive its dividends in the form of additional
shares rather than in cash and the amount of the cash dividend is recognised as
income, any excess in the value of the shares received over the amount
recognised is credited to the capital reserve. Deemed revenue from
non-reporting funds is credited to the revenue account. Interest on fixed
interest securities and deposits is accounted for on an effective yield
basis.
(f) Expenses: Expenses are accounted for on an accruals basis. Management
fees, administration and other expenses, with the exception of transaction
charges, are charged to the revenue column of the consolidated statement of
comprehensive income. Transaction charges are charged to the capital column of
the consolidated statement of comprehensive income.
(g) Investments held at fair value: Purchases and sales of investments are
recognised and derecognised on the trade date where a purchase or sale is under
a contract whose terms require delivery within the timeframe established by the
market concerned, and are initially measured at fair value.
All investments are classified as held at fair value through profit or loss on
initial recognition and are measured at subsequent reporting dates at fair
value, which is either the bid price or the last traded price, depending on the
convention of the exchange on which the investment is quoted. Investments in
units of unit trusts or shares in OEICs are valued at the bid price for dual
priced funds, or single price for non-dual priced funds, released by the
relevant investment manager. Unquoted investments are valued by the Directors
at the balance sheet date based on recognised valuation methodologies, in
accordance with International Private Equity and Venture Capital ('IPEVC')
Valuation Guidelines such as dealing prices or third party valuations where
available, net asset values and other information as appropriate.
(h) Taxation: The charge for taxation is based on taxable income for the year.
Withholding tax deducted from income received is treated as part of the
taxation charge against income. Taxation deferred or accelerated can arise due
to temporary differences between the treatment of certain items for accounting
and taxation purposes. Full provision is made for deferred taxation under the
liability method on all temporary differences not reversed by the Balance Sheet
date. No deferred tax provision is made against deemed reporting offshore
funds. Deferred tax assets are only recognised when there is more likelihood
than not that there will be suitable profits against which they can be applied.
(i) Foreign currency: Assets and liabilities denominated in foreign currencies
are translated at the rates of exchange ruling at the balance sheet date.
Foreign currency transactions are translated at the rates of exchange
applicable at the transaction date. Exchange gains and losses are taken to the
revenue or capital column of the consolidated statement of comprehensive income
depending on the nature of the underlying item.
(j) Capital reserve: The following are accounted for in this reserve:
- gains and losses on the realisation of investments together with the related
taxation effect;
- foreign exchange gains and losses on capital transactions, including those on
settlement, together with the related taxation effect;
- revaluation gains and losses on investments; and
- trail rebates received from the managers of the Company's investments.
The capital reserve is not available for the payment of dividends.
(k) Revenue reserve: This reserve includes net revenue recognised in the
revenue column of the Statement of Comprehensive Income.
(l) Special reserve: The special reserve can be used to finance the redemption
and/or purchase of shares in issue.
(m) Cash and cash equivalents: Cash and cash equivalents comprise current
deposits and balances with banks. Cash and cash equivalents may be held for the
purpose of either asset allocation or managing liquidity.
(n)Dividends payable: Dividends are recognised from the date on which they are
irrevocably committed to payment.
(o) Segmental Reporting: The Directors consider that the Group is engaged in a
single segment of business with the primary objective of investing in
securities to generate long term capital growth for its shareholders.
Consequently no business segmental analysis is provided.
(p) New standards, amendments to standards and interpretations effective for
annual accounting periods beginning after 1 July 2017:
There have been no new standards, amendment to standards and interpretations
effective for annual accounting periods beginning after 1 July 2017 that impact
these financial statements.
(q) Accounting standards issued but not yet effective: Standards issued but not
yet effective up to the date of issuance of the Group's Report & Accounts are
listed below. This listing of standards and interpretations issued are those
the Group reasonably expects will have an impact on disclosure, financial
position and/or financial performance, when applied at a future date. The Group
intends to adopt those standards (where applicable) when they become
effective. We currently do not believe that this will have a material impact
on the results or financial position.
The revised IFRS 9 Financial Instruments replaces IAS 39 and applies to the
classification and measurement and impairment of financial assets and financial
liabilities, and hedge accounting. The adoption of IFRS 9 will have an effect
on the classification of the Group's financial assets, but will have no impact
on the classification and measurement of financial liabilities. It will also
introduce a new expected loss impairment model requiring more timely
recognition of expected credit losses and a reformed model for hedge accounting
with enhanced disclosure of risk management activity. The standard is
effective for annual periods beginning on or after 1 January 2018.
IFRS 15 'Revenue from Contracts with Customers' (IFRS 15) supersedes IAS 11
'Construction Contracts', IAS 18 'Revenue' and related interpretations. The
revenue of the Group is not within the scope of IFRS 15 and therefore it has
had no material impact on adoption.
2. INVESTMENT INCOME
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
INCOME FROM INVESTMENTS
UK net dividend income 1,481 1,540
Unfranked investment income 173 146
1,654 1,686
OTHER OPERATING INCOME
Bank interest receivable 111 28
Loan interest income 11 1
122 29
TOTAL INCOME COMPRISES
Dividends 1,654 1,686
Other income 122 29
1,776 1,715
The above dividend and interest income has been included in the profit before
finance costs and taxation included in the cash flow statements.
3. MANAGEMENT FEES
Year ended Year ended
30th June 2018 30th June 2017
Revenue Capital Total Revenue Capital Total
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
Investment management fee 668 - 668 622 - 622
Performance fee - - - - - -
668 - 668 622 - 622
At 30th June 2018 there were amounts accrued of GBP173,000 (2017: GBP162,000) for
investment management fees.
4. OTHER EXPENSES
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
Directors' remuneration 48 50
Administrative and secretarial fee 94 94
Auditors' remuneration
- Audit 31 31
- Interim review 8 8
Other 91 93
272 276
Allocated to:
- Revenue 272 276
- Capital - -
272 276
5. TAXATION
(a) Analysis of tax charge for the year:
Year ended Year ended
30th June 2018 30th June 2017
Revenue Capital Revenue Capital
Return Return Total Return Return Total
GBP '000 GBP '000 GBP '000 GBP '000 GBP '000 GBP '000
Overseas tax 17 - 17 18 - 18
Recoverable income tax (12) - (12) (11) - (11)
Total current tax for the 5 - 5 7 - 7
year
Deferred tax - - - - - -
Total tax for the year 5 - 5 7 - 7
(note 5b)
(b) Factors affecting tax charge for the year:
The charge for the year of GBP5,000 (2017: GBP7,000) can be reconciled to the
profit per the consolidated statement of comprehensive income as follows:
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
Total profit before tax 6,883 16,002
Theoretical tax at the UK corporation tax rate of 19.00% 1,307 3,162
(2017: 19.75%)
Effects of:
Non-taxable UK dividend income (281) (304)
Gains and losses on investments that are not taxable (1,148) (3,000)
Excess expenses not utilised 138 153
Overseas dividends which are not taxable (16) (11)
Overseas tax 17 18
Recoverable income tax (12) (11)
Total tax for the year 5 7
Due to the Company's tax status as an investment trust and the intention to
continue meeting the conditions required to maintain approval of such status in
the foreseeable future, the Company has not provided tax on any capital gains
arising on the revaluation or disposal of investments.
There is no deferred tax (2017: GBPnil) in the capital account of the Company.
There is no deferred tax charge in the revenue account (2017: GBPnil).
At the year-end there is an unrecognised deferred tax asset of GBP478,000 (2017:
GBP386,000) based on the enacted tax rates of 17% for financial years beginning 1
April 2020 as a result of excess expenses.
6. COMPANY RETURN FOR THE YEAR
The Company's total return for the year was GBP6,878,000 (2017: GBP15,995,000).
7. RETURN PER ORDINARY SHARE
Total return per Ordinary share is based on the Group total return on ordinary
activities after taxation of GBP6,878,000 (2017: GBP15,995,000) and on 71,023,695
(2017: 71,023,695) Ordinary shares, being the weighted average number of
Ordinary shares in issue during the year.
Revenue return per Ordinary share is based on the Group revenue profit on
ordinary activities after taxation of GBP831,000 (2017: GBP810,000) and on
71,023,695 (2017: 71,023,695) Ordinary shares, being the weighted average
number of Ordinary shares in issue during the year.
Capital return per Ordinary share is based on net capital gains for the year of
GBP6,047,000 (2017: GBP15,185,000) and on 71,023,695 (2017: 71,023,695) Ordinary
shares, being the weighted average number of Ordinary shares in issue during
the year.
8. DIVIDS ON EQUITY SHARES
Amounts recognised as distributions in the year:
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
Dividends paid during the year
Dividends payable in respect of the year ended: 568 213
30th June 2018: 1.0p (2017: 0.8p) per share 710 568
It is proposed that a dividend of 1.0p per share will be paid in respect of the
current financial year.
9. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
GROUP AND COMPANY 96,301 91,730
ANALYSIS OF INVESTMENT
PORTFOLIO - GROUP AND COMPANY
Quoted* Unquoted Total
GBP '000 GBP '000 GBP '000
Opening book cost 55,791 7,555 63,346
Opening investment holding gains/(losses) 31,129 (2,745) 28,384
Opening valuation 86,920 4,810 91,730
Movement in period
Purchases at cost 14,821 1,195 16,016
Sales
- Proceeds (14,820) (2,843) (17,663)
- Realised gains on sales 5,782 1,675 7,457
Movement in investment holding gains for the year (1,778) 539 (1,239)
Closing valuation 90,925 5,376 96,301
Closing book cost 61,574 7,582 69,156
Closing investment holding gains/(losses) 29,351 (2,206) 27,145
Closing valuation 90,925 5,376 96,301
* Quoted investments include unit trust and OEIC funds and one monthly priced
fund.
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
ANALYSIS OF CAPITAL GAINS AND LOSSES
Realised gains on sales of investments 7,457 2,739
(Decrease)/Increase in investment holding gains (1,239) 12,075
Net gains on investments attributable to ordinary 6,218 14,814
shareholders
Transaction costs
The purchase and sale proceeds figures above include transaction costs on
purchases of GBP8,870 (2017: GBP2,282) and on sales of GBP626 (2017: GBPnil).
10. INVESTMENT IN SUBSIDIARY UNDERTAKING
The Company owns the whole of the issued share capital (GBP1) of JIT Securities
Limited, a company registered in England and Wales.
The financial position of the subsidiary is summarised as follows:
Year ended Year ended
30th June 30th June
2018 2017
GBP '000 GBP '000
Net assets brought forward 504 503
Profit for year 2 1
Net assets carried forward 506 504
11. OTHER RECEIVABLES
30th June 30th June 30th June 30th June
2018 2018 2017 2017
Group Company Group Company
GBP '000 GBP '000 GBP '000 GBP '000
Prepayments and accrued income 257 257 70 70
Taxation 15 15 15 15
Amounts owed by subsidiary undertakings - - - 914
272 272 85 999
12. CASH AND CASH EQUIVALENTS
30th June 30th June 30th June 30th June
2018 2018 2017 2017
Group Company Group Company
GBP '000 GBP '000 GBP '000 GBP '000
Cash at bank and on deposit 15,027 15,027 13,451 12,033
13. OTHER PAYABLES
30th June 30th June 30th June 30th June
2018 2018 2017 2017
Group Company Group Company
GBP '000 GBP '000 GBP '000 GBP '000
Accruals 234 234 210 210
Amounts owed to subsidiary undertakings - 506 - -
234 740 210 210
14. CALLED UP SHARE CAPITAL
30th June 30th June
2018 2017
GBP '000 GBP '000
Authorised
305,000,000 (2017: 305,000,000) Ordinary shares of GBP0.01 3,050 3,050
each
Issued and fully paid
71,023,695 (2017: 71,023,695) Ordinary shares of GBP0.01 710 710
each
15. RESERVES
Share Special Retained
Premium Reserve earnings
account
GBP '000 GBP '000 GBP '000
GROUP
At 30th June 2017 21,573 56,908 25,865
Decrease in investment holding gains - - (1,239)
Net gains on realisation of investments - - 7,457
Gain on foreign currency - - (176)
Trail rebates - - 5
Retained revenue profit for year - - 831
Dividend paid (568)
At 30th June 2018 21,573 56,908 32,175
Share Special Retained
Premium Reserve earnings
account
GBP '000 GBP '000 GBP '000
COMPANY
At 30th June 2017 21,573 56,908 25,865
Decrease in investment holding gains - - (1,237)
Net gains on realisation of investments - - 7,457
Gain on foreign currency - - (176)
Trail rebates - - 5
Retained revenue profit for year - - 829
Dividend paid (568)
At 30th June 2018 21,573 56,908 32,175
The components of retained earnings are set out below:
30th June 30th June
2018 2017
GBP '000 GBP '000
GROUP
Capital reserve - realised 3,764 (3,522)
Capital reserve - revaluation 27,145 28,384
Revenue reserve 1,266 1,003
32,175 25,865
COMPANY
Capital reserve - realised 3,412 (3,874)
Capital reserve - revaluation 27,651 28,888
Revenue reserve 1,112 851
32,175 25,865
16. NET ASSET VALUE PER ORDINARY SHARE7
The net asset value per Ordinary share is calculated on net assets of GBP
111,366,000 (2017: GBP105,056,000) and 71,023,695 (2017: 71,023,695) Ordinary
shares in issue at the year end.
17. ANALYSIS OF CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
At 1st Cash Exchange At 30th
July 2017 flow movement June 2018
GBP '000 GBP '000
GROUP
Cash at bank and on deposit 13,451 1,752 (176) 15,027
COMPANY
Cash at bank and on deposit 12,033 3,170 (176) 15,027
18. FINANCIAL INFORMATION
2018 Financial information
The figures and financial information for 2018 are unaudited and do not
constitute the statutory accounts for the year. The preliminary statement has
been agreed with the Company's auditors and the Company is not aware of any
likely modification to the auditor's report required to be included with the
annual report and accounts for the year ended 30th June 2018.
2017 Financial information
The figures and financial information for 2017 are extracted from the published
Annual Report and Accounts for the year ended 30th June 2017 and do not
constitute the statutory accounts for that year. The Annual Report and
Accounts (available on the Company's website www.nsitplc.com) has been
delivered to the Registrar of Companies and includes the Report and Independent
Auditors which was unqualified and did not contain a statement under either
section 498(2) or section 498(3) of the Companies Act 2006.
Annual Report and Accounts
The accounts for the year ended 30th June 2018 will be sent to shareholders in
October 2018 and will be available on the Company's website or in hard copy
format at the Company's registered office, 1 Knightsbridge Green, London SW1X
7QA.
The Annual General Meeting of the Company will be held on 15th November 2018 at
11.00am at 1 Knightsbridge Green, London SW1X 7QA.
20th September 2018
END
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