RNS Number:3792T
Platinum Investment Trust PLC
17 December 2003
Platinum Investment Trust PLC
Preliminary Announcement of Interim Results for the six months ended 31 October
2003
CHAIRMAN'S STATEMENT
The first six months of your trust's year, to 31st October 2003, has seen a
remarkable recovery in the share prices of many small companies. This is
reflected in an increase of 35.9% in the FTSE Small Cap (ex investment trusts)
index, which the board uses as a benchmark to monitor the performance of the
trust. The fully diluted net asset value of your trust at the half year end was
40.8p, a rise of 42.2% over the six months - a creditable performance, although
we are measuring over a relatively short time period. Since the restructuring of
the trust on 1st August 2002, to which I referred in my last chairman's
statement, the net asset value has risen by 32.5%, against a benchmark increase
of 21.5%.
What has driven these significant rises? The external factors have been well
rehearsed - the conclusion of the Iraqi war, continued steady improvements in
global economies, and an improvement in investor sentiment. But we should keep
these figures in context. This is partly a rebound from three years of falling
share prices, and these rises in small companies dwarf the returns from large
companies. Investors have been putting money into small companies as they are
perceived as the first beneficiaries of improving economies, and the more money
that chases small illiquid stocks, the faster the prices rise.
Taking cash from low yielding deposits to invest in the market has improved our
revenue flow. Basic earnings per Ordinary share over the six months were 0.9p
(2002; 0.5p), calculated on the weighted average number of shares in issue
during the period. The directors are pleased to declare an interim dividend of
0.4p (2002: 0.35p) per share payable on 30 January 2004 to shareholders on the
register on 5 January 2004. This is an increase of 14.3% over the interim
dividend paid last year.
In November, after the period end, we redeemed the whole of the outstanding
Convertible Unsecured Loan Stock issue. As a consequence, we have now applied to
the High Court to reduce the share capital of the trust. As I explained in my
recent letter to shareholders, this technical adjustment will allow us much more
flexibility to buy shares in the market. We believe this is a useful tool in
managing the discount.
I began my statement with a small health warning. We should not expect share
prices to continue to rise at the pace of the last six months. In many ways the
easy money has been made. Our remit is clear - invest in 20 to 25 companies
where we can see value, and be active and supportive shareholders in helping to
realise this value. The stockmarket is higher, but we still see good potential
within our portfolio.
I M Clubb
Chairman
17 December 2003
CONSOLIDATED STATEMENT OF TOTAL RETURN
(*incorporating the revenue account) for the six months ended 31 October
2003 2002
(Unaudited) (Unaudited)
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Gains/(losses) on
investments - 19,466 19,466 - (2,987) (2,987)
(note 2)
Dividends and interest
(note 3) 1,623 - 1,623 927 - 927
Investment management
fees (80) (162) (242) (148) (580) (728)
Other expenses (107) - (107) (167) - (167)
-------- ------- ------- -------- ------- -------
Net return before
finance costs and
taxation 1,436 19,304 20,740 612 (3,567) (2,955)
Interest payable and
similar charges (73) (38) (111) (5) - (5)
-------- ------- ------- -------- ------- -------
Net return on ordinary
activities before
taxation 1,363 19,266 20,629 607 (3,567) (2,960)
Taxation on ordinary
activities - - - (47) 47 -
-------- ------- ------- -------- ------- -------
Return on ordinary
activities after
taxation for the
period 1,363 19,266 20,629 560 (3,520) (2,960)
Dividends paid and
proposed (628) - (628) (549) - (549)
(note 5)
-------- ------- ------- -------- ------- -------
Transfer to/(from)
reserves 735 19,266 20,001 11 (3,520) (3,509)
======== ======= ======= ======== ======= =======
Return per Ordinary
share (note 6):
Basic (pence) 0.9 12.3 13.2 0.5 (3.4) (2.9)
Diluted (pence) 0.8 0.5
* The revenue column of this statement is the revenue account of the Group.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the year.
CONSOLIDATED BALANCE SHEET
31 October 2003 31 October 2002 30 April 2003
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed assets
Investments 70,893 43,133 43,154
Current assets
Stock - 300 -
Debtors 357 133 553
Cash at bank 3,124 6,184 7,138
----------- ----------- ----------
3,481 6,617 7,691
Creditors: amounts falling
due within one year (4,210) (1,602) (2,709)
----------- ----------- ----------
Net current
(liabilities)/assets (729) 5,015 4,982
----------- ----------- ----------
Total assets less current
liabilities 70,164 48,148 48,136
Creditors: amounts falling
due after more than one
year (4,986) (3,647) (2,961)
----------- ----------- ----------
65,178 44,501 45,175
=========== =========== ==========
Capital and reserves:
Called up share capital 15,699 15,571 15,698
Share premium account 30,148 29,819 30,147
Special reserve 4,679 4,679 4,679
Capital redemption reserve 212 212 212
Capital reserve -
realised (4,098) (4,340) (6,093)
- unrealised 16,008 (3,097) (1,263)
Revenue reserve 2,530 1,657 1,795
----------- ----------- ----------
Equity shareholders' funds 65,178 44,501 45,175
=========== =========== ==========
Net asset value per share
(pence):
Basic (note 7) 41.1* 28.6* 28.8
Diluted (note 7) 40.8* 28.5* 28.7
* Excluding current period revenue
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 October 2003 2002
(Unaudited) (Unaudited)
#'000 #'000 #'000 #'000
Net cash inflow from operating 1,458 292
activities
Capital expenditure and financial
investment
Purchases of investments (27,415) (19,895)
Sales of investments 17,979 2,155
Purchase of government securities - (66,274)
Sales of government securities - 59,591
--------- ---------
Net cash outflow from capital (9,436) (24,423)
expenditure and
financial investment
Equity dividends paid (1,021) -
--------- ---------
Net cash outflow before financing (8,999) (24,131)
Financing
Proceeds from share placing and open - 37,240
offer
Share issue expenses - (995)
Loan drawn down 5,000 -
Loan issue expenses (15) -
Repurchase of share capital via disposal
facility - (9,272)
Other repurchases of share capital - (123)
--------- ---------
Net cash inflow from financing 4,985 26,850
--------- ---------
(Decrease)/increase in cash (4,014) 2,719
========= =========
Notes:
1.Basis of preparation
The figures for the half year to 31 October 2003 have been prepared on a basis
consistent with the accounting policies adopted in the audited financial
statements for the year ended 30 April 2003, however, the Company has adopted
the 2003 Statement of Recommended Practice ("SORP") for investment trust
companies. This has had no material impact on the figures for the six months to
31 October 2003.
In the opinion of the Directors, the Company has conducted its affairs so as to
be able to seek approved investment trust status from the Inland Revenue under
Section 842 of the Income and Corporation Taxes Act 1988.
2. Gains/(losses) on Investments
Gains/(losses) on investments are comprised as follows:
Six months to Six months to
31 October 2003 31 October 2002
#'000 #'000
Realised gains/(losses) on sale of
investments 2,195 (495)
Unrealised gains/(losses) on revaluation
of investments 17,271 (2,492)
-------------- --------------
19,466 (2,987)
============== ==============
3.Income
Income is comprised as follows:
Six months to Six months to
31 October 2003 31 October 2002
#'000 #'000
UK dividends 1,520 434
Loan stock interest 5 -
Treasury Bill and OEIC interest 16 323
Bank interest 77 128
Rental income 5 42
-------------- --------------
1,623 927
============== ==============
4. Investment management fee
Investment management fees paid to Platinum Fund Managers have been allocated
33% revenue, 67% capital. Fees in relation to the Knox D'Arcy Asset Management
ceased on 30 January 2003.
The total charge is comprised:
Six months to Six months to
31 October 2003 31 October 2002
#'000 #'000
Platinum Fund Managers Limited 206 139
Knox D'Arcy Asset Management Limited - 481
Irrecoverable VAT 36 108
-------------- --------------
242 728
============== ==============
5. Dividend
The Directors have declared an interim dividend of 0.4p (2002: 0.35p) per share,
payable on 30 January 2004, with an ex-date of 31 December 2003, to shareholders
on the register of members at close of business on 5 January 2004.
6. Return per Ordinary share
The basic return per Ordinary share has been calculated on the basis of
156,983,191 Ordinary shares being the weighted average number of Ordinary shares
in issue during the period (six months to 31 October 2002: 102,226,769). In
accordance with Financial Reporting Standard No. 14: "Earnings per Share", the
diluted return per Ordinary share assumes the exercise of both the Management
Warrants outstanding and the Loan Stock into Ordinary shares. The diluted
weighted average number of shares assumed to be in issue during the six months
to 31 October 2003 amounted to 165,573,286 (six months to 31 October 2002:
122,748,370).
7. Net asset value per Ordinary share
The basic net asset value per Ordinary share has been calculated based on net
assets excluding current period revenue at 31 October 2003 of #64,443,000 (31
October 2002: #44,490,000, 30 April 2003: #45,175,000) and on 156,986,982 (31
October 2002: 155,711,916, 30 April 2003: 156,982,830) shares in issue.
The calculation of the diluted net asset value per Ordinary share at 31 October
2003 assumes the conversion of the 8,372,508 outstanding units of Convertible
Unsecured Loan Stock.
The diluted net asset value at 31 October 2002 assumes such conversion had not
taken place as the conversion price exceeded the net asset value. It also
assumes the conversion of the 426,380 outstanding Management Warrants of 10p
each.
8. Reconciliation of movements in equity shareholders' funds
Six months to Six months to Year to
31 October 2003 31 October 2002 30 April 2003
#'000 #'000 #'000
Opening equity shareholders' 45,175 15,976 15,976
funds
Retained net revenue for the 1,363 560 149
period/year
Dividend declared (628) (549) -
Discount on repurchase of Loan - - 86
Stock
Other recognised capital
gains/(losses) 19,266 (3,520) (3,523)
Conversion of Loan Stock 2 3,744 5,641
Cost of repurchase of
Ordinary shares - (6,213) (9,396)
Proceeds from issue of Ordinary - 35,498 37,240
shares
Re-organisation expenses - (995) (998)
----------- ----------- ----------
Closing equity shareholders' 65,178 44,501 45,175
funds =========== =========== ==========
9. Financial information
The financial information contained in this preliminary announcement does not
constitute full statutory financial statements as defined in Section 240 of the
Companies Act 1985. The statutory financial statements for the year to 30 April
2003, which contained an unqualified auditor's report, have been lodged with the
Registrar of Companies, and did not contain a statement required under Section
237(2) or (3) of the Companies Act 1985.
Independent review report to Platinum Investment Trust plc
We have been instructed by the company to review the financial information for
the six months ended 31 October 2003 which comprises the Statement of Total
Return, Balance Sheet, Cash Flow Statement and the related notes. We have read
the other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit accordingly we do not express an audit opinion
on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2003.
Ernst & Young LLP 17 December 2003
Edinburgh
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