RNS Number:6790R
Allianz Dresdr 2 Endw Policy TstPLC
22 February 2007
For Immediate Release 22nd February 2007
ALLIANZ DRESDNER SECOND ENDOWMENT POLICY TRUST plc
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
For the fifteen months ended 31st December 2006
Investment Review - 2009 Pool
A summary of the results for the 2009 Pool for the fifteen months ended 31st
December 2006 is set out on page 5. The Net Asset Value has risen from 129.4p
per 2009 Share at 30th September 2005 to 149.6p per 2009 Share at 31st December
2006, an increase of 15.6%. The period end Net Asset Value fully reflects the
demutualisation benefits of just under 3.9p per 2009 Share received from
Standard Life.
The 2009 Pool currently has investments in policies from a total of 56
with-profits funds. During the period the 2009 Pool realised proceeds of policy
maturities amounting to #2.0 million. The average annualised return on these
policies was 5.58% since purchase. This calculation does not include windfalls
such as those arising from demutualisations.
Repayment of 2006 Shares
For 2006 Shareholders, the period under review saw the realisation of the assets
of the Company attributable to the 2006 Pool as at 30th September 2006. On
21st August 2006 a Circular was sent to shareholders outlining recommended
proposals for the reconstruction of the Company and repayment of the 2006
Shares. The Terminal Asset Value per 2006 Share was 174.7708p as at the
Calculation Date, 6th October 2006.
Accounting Reference Date
On 25th July 2006 the Company changed its Accounting Reference Date from 30th
September to 31st December.
Outlook
Equity markets have recovered well from the mid year sell off. In the main, the
strength has been due to improving profits, helped by higher margins, together
with high levels of liquidity which have fuelled record levels of merger and
acquisition activity. With global interest rates remaining at relatively low
levels and ample liquidity available, private equity funds and companies have
been able to raise money relatively easily. This strength was despite two
further UK interest rate rises in August and November which took rates up to 5%
- the highest level in five years - and a further rise to 5.25% since the year
end.
This improving confidence has bolstered interest in traded endowments from
investors, including those from overseas, who are attracted by the prospect of
capital growth underpinned by minimum guarantees. Stronger markets have
improved the outlook for the with-profits funds of the life offices. Recent
moves by Aviva and Prudential to address their "inherited" estates have
refocused attention on the with-profits sector.
Accrued guaranteed benefits
Guaranteed benefits are attached to the policy portfolio (comprising sums
assured and reversionary bonuses declared to date) and these have continued to
grow as reversionary bonuses have been declared over the year. Stated as a
projected final net asset value after projected expenses - including the cost of
borrowings - they represented 114.0p per 2009 Share as at 31st December 2006.
Share buybacks and borrowings
No shares were bought back during the period for either the 2006 or 2009 share
class. The Board intends to seek renewed authority from shareholders to buy
back up to 15% of the issued 2009 share capital of the Company at the
forthcoming Annual General Meeting. Borrowings net of cash and fixed interest
securities held represented 13.2% of total net assets for the 2009 Pool at the
period end.
Projected final net asset values
The Company publishes projected final net asset values on a regular basis.
These projections are based on a range of future bonus rate levels, which will
reflect, inter alia, the investment returns earned by the underlying
with-profits funds. Final net asset values projected as at 31st December 2006
are given in the table below.
200% Current 150% Current 120% Current 100% Current 80% Current No Further
Bonus Rates Bonus Rates Bonus Rates Bonus Rates Bonus Rates Bonuses
Projected final net asset
value at 31st December 2009
(2009 Pool) 197.1p 175.1p 162.1p 153.5p 145.4p 114.0p
Projected final net asset values are calculated using the principal bases and
assumptions set out at the end of this document. These illustrations are given
to provide an indication of the sensitivity of the projected final net asset
value to bonus rate changes. They should not be taken as forecasts of
particular degree of change in rate levels.
Earnings and dividend
The Company is managed with the objective of providing returns to investors
entirely in the form of capital growth. The continuing deficit on the revenue
account of the Company is consistent with this objective. Consequently, no
dividend will be payable on the 2009 Shares.
Status
The Company operates as an approved investment trust within the meaning of
Section 842 of the Income and Corporation Taxes Act 1988. Approval has been
granted for the year ended 30th September 2005. Under the Proposals outlined
in the Circular to shareholders dated 21st August 2006 the Company lost
investment trust status upon the Bonus Issue and reclassification of 2006 Shares
into Reclassified Shares becoming effective. The Company thus lost investment
trust status for the period from 30th September 2006 until 31st December 2006,
when the new accounting period ended. The Directors conducted the affairs of
the Company to minimise any chargeable gains arising in this period. In
addition, losses are available to set against any chargeable gains arising in
this period. Approval is expected to be granted for the year ended 30th
September 2006 and the year commencing 1st January 2007. The Company is not a
close company.
Annual General Meeting
The Annual General Meeting will be held on Thursday 26th April 2007 at 12:30pm.
155 Bishopsgate By Order of the Board
London EC2M 3AD P W I Ingram
Company Secretary
For further information, please contact:
Simon White, Head of Investment Trusts
RCM (UK) Limited
Tel: 020 7065 1539
RESULTS
INCOME STATEMENT (Unaudited)
For the fifteen months ended 31st December 2006
2006 Pool
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 2,153 2,153
Income 1,112 - 1,112
Management and advisory fees (506) - (506)
Expenses of administration (445) - (445)
Net return before finance costs and taxation 161 2,153 2,314
Finance costs : interest payable and similar charges (3) - (3)
Return on ordinary activities before taxation 158 2,153 2,311
Taxation - - -
Return attributable to 2006 Shareholders 158 2,153 2,311
Return per 2006 Share (Note 1) 0.79p 10.73p 11.52p
BALANCE SHEET 2006 Pool
As at 31st December 2006 (Unaudited) #'000s
Investments held at fair value through profit or -
loss
Fair value of interest rate swaps -
Net Current Assets -
Total Assets less Current Liabilities -
Creditors: amounts falling due after more than one year -
Total Net Assets -
Called up Share Capital -
Share Premium Account -
Capital Redemption Reserve -
Capital Reserves: Realised 12,885
: Unrealised -
Special Reserve -
Hedging Reserve -
Revenue Reserve (12,885)
Equity Shareholders' Funds -
RESULTS
INCOME STATEMENT (Unaudited)
For the fifteen months ended 31st December 2006
2009 Pool
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 4,984 4,984
Income 109 - 109
Management and advisory fees (619) - (619)
Expenses of administration (156) - (156)
Net return before finance costs and taxation (666) 4,984 4,318
Finance costs : interest payable and similar charges (386) - (386)
Return on ordinary activities before taxation (1,052) 4,984 3,932
Taxation 57 (57) -
Return attributable to 2009 Shareholders (995) 4,927 3,932
Return per 2009 Share (Note 1) (5.04)p 24.95p 19.91p
BALANCE SHEET 2009 Pool
As at 31st December 2006 (Unaudited) #'000s
Investments held at fair value through profit or loss 34,422
Fair value of interest rate swaps 37
Net Current Assets 371
Total Assets less Current Liabilities 34,830
Creditors: amounts falling due after more than one year (5,300)
Total Net Assets 29,530
Called up Share Capital 197
Share Premium Account 18,925
Capital Redemption Reserve 3
Capital Reserves: Realised 6,325
: Unrealised 11,088
Special Reserve -
Hedging Reserve 49
Revenue Reserve (7,057)
Equity Shareholders' Funds 29,530
Net Asset Value per 2009 Share 149.6p
The net asset value is based on 19,745,000 2009 Shares in issue at the year end.
RESULTS
INCOME STATEMENT (Unaudited)
For the fifteen months ended 31st December 2006
Company
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 7,137 7,137
Income 1,221 - 1,221
Management and advisory fees (1,125) - (1,125)
Expenses of administration (601) - (601)
Net return before finance costs and taxation (505) 7,137 6,632
Finance costs : interest payable and similar charges (389) - (389)
Return on ordinary activities before taxation (894) 7,137 6,243
Taxation 57 (57) -
Return on ordinary activities after taxation (837) 7,080 6,243
BALANCE SHEET Company
As at 31st December 2006 (Unaudited) #'000s
Investments held at fair value through profit or loss 34,422
Fair value of interest rate swaps 37
Net Current Assets 371
Total Assets less Current Liabilities 34,830
Creditors: amounts falling due after more than one year (5,300)
Total Net Assets 29,530
Called up Share Capital 197
Share Premium Account 18,925
Capital Redemption Reserve 3
Capital Reserves: Realised 19,210
: Unrealised 11,088
Special Reserve -
Hedging Reserve 49
Revenue Reserve (19,942)
Equity Shareholders' Funds 29,530
RESULTS
INCOME STATEMENT
For the year ended 30th September 2005
2006 Pool
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 2,127 2,127
Income 110 - 110
Management and advisory fees (553) - (553)
Expenses of administration (121) - (121)
Net return before finance costs and taxation (564) 2,127 1,563
Finance costs : interest payable and similar charges (320) - (320)
Return on ordinary activities before taxation (884) 2,127 1,243
Taxation - - -
Return attributable to 2006 Shareholders (884) 2,127 1,243
Return per 2006 Share (Note 1) (4.41)p 10.59p 6.18p
BALANCE SHEET 2006 Pool
As at 30th September 2005 #'000s
Investments held at fair value through profit or 33,503
loss
Fair value of interest rate swaps -
Net Current Liabilities (689)
Total Assets less Current Liabilities 32,814
Creditors: amounts falling due after more than one year -
Total Net Assets 32,814
Called up Share Capital 1,004
Share Premium Account -
Capital Redemption Reserve 4
Capital Reserves: Realised 14,241
: Unrealised 11,480
Special Reserve 19,128
Hedging Reserve -
Revenue Reserve (13,043)
Equity Shareholders' Funds 32,814
Net Asset Value per 2006 Share 163.5p
The net asset value is based on 20,073,064 2006 Shares in issue at the year end.
RESULTS
INCOME STATEMENT
For the year ended 30th September 2005
2009 Pool
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 2,520 2,520
Income 91 - 91
Management and advisory fees (458) - (458)
Expenses of administration (92) - (92)
Net return before finance costs and taxation (459) 2,520 2,061
Finance costs : interest payable and similar charges (301) - (301)
Return on ordinary activities before taxation (760) 2,520 1,760
Taxation - - -
Return attributable to 2009 Shareholders (760) 2,520 1,760
Return per 2009 Share (Note 1) (3.85)p 12.76p 8.91p
BALANCE SHEET 2009 Pool
As at 30th September 2005 #'000s
Investments held at fair value through profit or 31,199
loss
Fair value of interest rate swaps -
Net Current Assets 1
Total Assets less Current Liabilities 31,200
Creditors: amounts falling due after more than one year (5,650)
Total Net Assets 25,550
Called up Share Capital 197
Share Premium Account 18,925
Capital Redemption Reserve 3
Capital Reserves: Realised 4,937
: Unrealised 7,549
Special Reserve -
Hedging Reserve -
Revenue Reserve (6,061)
Equity Shareholders' Funds 25,550
Net Asset Value per 2009 Share 129.4p
The net asset value is based on 19,745,000 2009 Shares in issue at the year end.
RESULTS
INCOME STATEMENT
For the year ended 30th September 2005
Company
Revenue Capital Total Return
#'000s #'000s #'000s
(Note 2)
Net gains on investments at fair value - 4,647 4,647
Income 201 - 201
Management and advisory fees (1,011) - (1,011)
Expenses of administration (213) - (213)
Net return before finance costs and taxation (1,023) 4,647 3,624
Finance costs : interest payable and similar charges (621) - (621)
Return on ordinary activities before taxation (1,644) 4,647 3,003
Taxation - - -
Return attributable to ordinary shareholders (1,644) 4,647 3,003
BALANCE SHEET Company
As at 30th September 2005 #'000s
Investments held at fair value through profit or loss 64,702
Fair value of interest rate swaps -
Net Current Liabilities (688)
Total Assets less Current Liabilities 64,014
Creditors: amounts falling due after more than one year (5,650)
Total Net Assets 58,364
Called up Share Capital 1,201
Share Premium Account 18,925
Capital Redemption Reserve 7
Capital Reserves: Realised 19,178
: Unrealised 19,029
Special Reserve 19,128
Hedging Reserve -
Revenue Reserve (19,104)
Equity Shareholders' Funds 58,364
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - 2006 Pool
Called up Share Capital Capital Capital Special Hedging Revenue Total
Share Premium Redemption Reserve Reserve Reserve Reserve Reserve #'000s
Capital Account Realised Unrealised #'000s #'000s #'000s
#'000s Reserve #'000s #'000s
#'000s #'000s
Net Assets at 30th 1,004 - 4 11,184 12,410 19,128 - (12,159) 31,571
September 2004
Revenue Return - - - - - - - (884) (884)
Capital Return - - - 3,057 (930) - - - 2,127
Net Assets at 30th 1,004 - 4 14,241 11,480 19,128 - (13,043) 32,814
September 2005
Net Assets at 30th 1,004 - 4 14,241 11,480 19,128 - (13,043) 32,814
September 2005
Adjustment to - - - - - - - - -
record investments
at bid prices
Revenue Return - - - - - - - 158 158
Capital Return - - - 13,633 (11,480) - - - 2,153
Amounts cancelled (1,004) - (4) (14,989) - (19,128) - - (35,125)
upon
reconstruction
Net Assets at 31st - - 12,885 - - - (12,885) -
December 2006 -
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - 2009 Pool
Called up Share Capital Capital Capital Special Hedging Revenue Total
Share Premium Redemption Reserve Reserve Reserve Reserve Reserve #'000s
Capital Account Realised Unrealised #'000s #'000s #'000s
#'000s Reserve #'000s #'000s
#'000s #'000s
Net Assets at 30th 197 18,925 3 4,621 5,345 - - (5,301) 23,790
September 2004
Revenue Return - - - - - - - (760) (760)
Capital Return - - - 316 2,204 - - - 2,520
Net Assets at 30th 197 18,925 3 4,937 7,549 - - (6,061) 25,550
September 2005
Net Assets at 30th 197 18,925 3 4,937 7,549 - - (6,061) 25,550
September 2005
Adjustment to - - - - (1) - - - (1)
record investments
at bid prices
Recognition of - - - - - 49 - 49
interest rate -
swaps at fair
value
Revenue Return - - - - - - - (995) (995)
Capital Return - - - 1,387 3,540 - - - 4,927
Net Assets at 31st 197 18,925 3 6,324 11,088 - 49 (7,056) 29,530
December 2006
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - The Company
Called up Share Capital Capital Capital Special Hedging Revenue Total
Share Premium Redemption Reserve Reserve Reserve Reserve Reserve #'000s
Capital Account Realised Unrealised #'000s #'000s #'000s
#'000s Reserve #'000s #'000s
#'000s #'000s
Net Assets at 30th 1,201 18,925 7 15,805 17,755 19,128 - (17,460) 55,361
September 2004
Revenue Return - - - - - - - (1,644) (1,644)
Capital Return - - - 3,373 1,274 - - - 4,647
Net Assets at 30th 1,201 18,925 7 19,178 19,029 19,128 - (19,104) 58,364
September 2005
Net Assets at 30th 1,201 18,925 7 19,178 19,029 19,128 - (19,104) 58,364
September 2005
Adjustment to - - - - (1) - - - (1)
record investments
at bid prices
Recognition of - - - - - - 49 - 49
interest rate
swaps at fair
value
Revenue Return - - - - - - - (837) (837)
Capital Return - - - 15,020 (7,940) - - - 7,080
Amounts cancelled (1,004) - (4) (14,989) - (19,128) - - (35,125)
upon
reconstruction
Net Assets at 31st 197 18,925 3 19,209 11,088 - 49 (19,941) 29,530
December 2006
CASH FLOW STATEMENT (Unaudited)
For the fifteen months ended 31st December 2006
2006 Pool
Fifteen months ended Year ended
31st December 2006 30th September 2005
#'000s #'000s
Net cash inflow (outflow) from operating activities 7 (526)
Servicing of finance
Interest paid (12) (318)
Taxation
UK income tax repaid 2 -
Investing activities
Purchases of fixed asset investments (31,567) (973)
Receipts from demutualisations 907 -
Sales of fixed asset investments 66,651 8,059
Net cash inflow from investing activities 35,991 7,086
Net cash inflow before financing 35,988 6,242
Financing
Decrease in bank loan (1,300) (5,900)
Amounts cancelled upon reconstruction (35,082) -
Net cash outflow from financing (36,382) (5,900)
(Decrease) increase in cash (394) 342
CASH FLOW STATEMENT (Unaudited)
For the fifteen months ended 31st December 2006
2009 Pool
Fifteen months ended Year ended
31st December 2006 30th September 2005
#'000s #'000s
Net cash outflow from operating activities (712) (390)
Servicing of finance
Interest paid (342) (297)
Taxation
UK income tax repaid - -
Investing activities
Purchases of fixed asset investments (1,068) (896)
Receipts from demutualisations 764 -
Sales of fixed asset investments 2,078 1,400
Net cash inflow from investing activities 1,774 504
Net cash inflow (outflow) before financing 720 (183)
Financing
Decrease in bank loan (350) -
Net cash outflow from financing (350) -
Increase (decrease) in cash 370 (183)
CASH FLOW STATEMENT (Unaudited)
For the fifteen months ended 31st December 2006
Company
Fifteen months ended Year ended
31st December 2006 30th September 2005
#'000s #'000s
Net cash outflow from operating activities (705) (916)
Servicing of finance
Interest paid (354) (615)
Taxation
UK income tax repaid 2 -
Investing activities
Purchases of fixed asset investments (32,635) (1,869)
Receipts from demutualisations 1,671 -
Sales of fixed asset investments 68,729 9,459
Net cash inflow from investing activities 37,765 7,590
Net cash inflow before financing 36,708 6,059
Financing
Decrease in bank loan (1,650) (5,900)
Repayment of 2006 Shares (35,082) -
Net cash outflow from financing (36,732) (5,900)
(Decrease) increase in cash (24) 159
TWENTY LARGEST HOLDINGS BY LIFE OFFICE (Unaudited)
AS AT 31st DECEMBER 2006 - 2009 POOL
Value of % of
Life Office Policies Total
#'000s Investments
Standard Life 8,720 25.3
Legal & General 5,776 16.8
Prudential (Scottish Amicable) 3,199 9.3
Scottish Widows 2,394 7.0
AVIVA (Norwich Union) 1,794 5.2
Prudential 1,777 5.2
Scottish Life 1,488 4.3
Clerical Medical 1,325 3.8
Scottish Provident 1,064 3.1
Friends Provident 848 2.5
National Mutual Life 406 1.2
Colonial Mutual 372 1.1
Gresham Life 326 0.9
Royal & Sun Alliance (Royal Life) 316 0.9
Sun Life of Canada 225 0.7
AVIVA (Provident Mutual) 198 0.6
Guardian Assurance 190 0.6
Britannic Assurance 170 0.5
Alba Life 152 0.4
AVIVA (Commercial Union) 151 0.4
Total of twenty largest holdings 30,891 89.8
Holdings in other life offices 2,524 7.3
Total holdings of endowment policies 33,415 97.1
FIXED INTEREST HOLDINGS
Finland (REP) 10.125% # Bds 22.06.08 500 1.4
Abbey National 5.375% Notes 30.12.09 30.12.09 507 1.5
Total Fixed Interest Holdings 1,007 2.9
Total of Invested Funds 34,422 100.0
There were no policies or fixed interest securities held by the 2006 Pool at
31st December 2006.
ALLIANZ DRESDNER SECOND ENDOWMENT POLICY TRUST plc
Principal bases and assumptions used in projecting the final net asset values on
page 2.
The final net asset values for the 2009 Pool have been calculated at 31st
December 2009 on the basis that:
1) All policies are held to maturity, no death claims or demutualisation
benefits are received and no further purchases or disposals of policies are
made;
2) The latest reversionary and terminal bonus rates declared at 31st
December 2006 continue to apply until maturity or are reduced immediately by 20%
or 100% or increased by 20%, 50% or 100%;
3) The estimated mid-market gross redemption yields as at 31st December
2006, for policies of differing remaining terms, are assumed to remain
unchanged;
4) Annual expenses are assumed to be in line with recent experience, and
future annual inflation is assumed to be 3%. Interest rates over the Company's
remaining life, in so far as not fixed by swaps, are assumed to be consistent
with the shape of the swap rate yield curve at 31st December 2006; and
5) No further shares are issued or repurchased, nor are any dividends
paid.
6) They do not account for any likely costs of liquidation.
Notes
Note 1
The return per 2006 Share is based on a weighted average number of 2006 Shares
in issue prior to their repayment on 6th October 2006, of 20,073,064.
The return per 2009 Share is based on a weighted average number of 2009 Shares
in issue during the period of 19,745,000.
Note 2
The total column on this statement is the profit and loss of the 2006 or 2009
Pools or of the Company. All revenue and capital items derived from continuing
operations. No operations were acquired or discontinued in the period. A
Statement of Total Recognised Gains and Losses is not required as all gains and
losses of the 2006 or 2009 Pools or of the Company have been reflected in the
relevant Income Statements.
Note 3
Endowment policies, listed investments and interest rate swaps are held at fair
value through profit or loss in accordance with FRS 26 "Financial Instruments:
Measurement". Listed investments are valued at bid market price. This
represents a change in accounting policy. However, in accordance with the
exemption conferred by paragraph 108D of FRS 26, comparatives have not been
restated.
Note 4
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the fifteen months ended 31st December 2006.
The financial information for the year ended 30th September 2005 is derived from
the statutory accounts for that year which have been delivered to the Registrar
of Companies. The auditors reported on those accounts; their report was
unqualified and did not contain a statement under section 237(2) or (3) of the
Companies Act 1985. The statutory accounts for the fifteen months ended
31st December 2006 will be finalised on the basis of the financial information
presented by the Directors in this preliminary announcement and will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting. This announcement has been prepared using the same accounting policies
as those adopted in the annual accounts for the year ended 30th September 2005,
except for the change from mid to bid prices as noted in Note 3 above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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