RNS Number:1655Y
Asset Management Investment Co.PLC
12 June 2007
For immediate release Tuesday 12 June 2007
ASSET MANAGEMENT INVESTMENT COMPANY PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 31 MARCH 2007
Asset Management Investment Company PLC ('AMIC'), the specialist investor in the
global asset management industry, announces its results for the six months to 31
March 2007.
Highlights
* Net assets #29.3 million (31 March 2006 #18.9 million)
* Gearing 19% (31 March 2006 58%)
* NAV per share 137.54p (31 March 2006 89.15p)
* Pre-tax revenue profit #888,000 (31 March 2006 #818,000)
* Interim dividend 1.5p net per share (2006 1.5p net per share)
* Special interim dividends of 2.0p net per share each paid on 20 October 2006
and 20 April 2007
* Repayment of zero dividend preference shares
* Proposals for the future of the Company approved by shareholders
Chairman's statement
I am pleased to report continuing encouraging progress by your Company since my
last statement with the Annual Report for 2006. In a favourable operating
environment for the asset management industry the majority of the investments in
the portfolio have performed very satisfactorily, and this has been reflected in
a rising share price, an increased net asset value per share and a narrowing of
the discount at which the ordinary shares trade. The current share price of
114.50p has not been achieved since July 2002, at the start of the last bear
market, and the net asset value of 137.18p is close to the highest level since
September 2002.
Corporate developments
As reported in my statement with the Annual Report for the year to 30 September
2006, at an Extraordinary General Meeting held on 20 October 2006 the virtually
unanimous approval of shareholders was obtained for the continuation of the
Company and the adoption of an investment strategy of gradually realising the
investment portfolio and returning cash to shareholders. Your Board continues
to consider all options for the future of the Company which will enhance this
objective.
In January 2007 your Board negotiated with FX Concepts the early payment of the
next tranche of $4 million due in July 2007 in terms of the agreement regarding
the disposal of the convertible rights on the loan note held by your Company.
This reduced the amount due on the term facility from Investec Bank (UK) Limited
to $8 million, which will be fully repaid from the final two tranches due to be
received from FX Concepts in July 2008 and July 2009.
Provided the discount at which the ordinary shares trade makes it in the
interests of shareholders for the Company to buy back its ordinary shares, your
Board is ready to use the powers granted to them in October 2006 and renewed at
the Annual General Meeting in March 2007. So far the Company has not had the
opportunity of buying any significant lines of stock other than a modest
repurchase of 1.27% of the equity in November 2006.
Investment portfolio
Your Company holds two quoted investments, both listed on AIM. City of London
Investment Group has made significant progress since its listing in April 2006
and now has $3.8 billion under management. In February 2007 your Company
participated in a placing of ordinary shares in City of London and sold 750,000
shares for a total of #1,893,374. The balance of 1,781,275 shares is valued at
#4.8 million compared with a cost of #0.9 million. Integrated Asset Management,
which is a manager of funds of hedge funds, has made an excellent start to 2007,
following a significant increase of its assets under management in 2006 to $1.5
billion.
FX Concepts continues to be the largest investment in the portfolio. The company
has close to $13 billion under management and its revenues for the year to 31
May 2007 are again ahead of the level which ensures that AMIC will receive the
maximum revenue of $1,425,000 from its note. The next largest investment, IFDC
Group S.A., a manager of funds invested in the Japanese stock market, also
continues to perform well and is a major contributor to our revenue. Principal
Investment Holdings, located in Sevenoaks, Kent performed strongly in 2006, and
now has #1 billion under management. Lombardia Capital Partners in Pasadena,
California has made very encouraging progress in developing its business and now
has $1.5 billion under management in a range of large, medium and small cap
products. The problems inherited from the previous management are gradually
being resolved, and your Board felt that it was appropriate to restore value to
the convertible note and the common shares held by your Company. Hillview
Capital Management in New York has also made reasonable progress and now manages
assets of $820 million. As reported in my last statement, Financial Management
Advisors in Los Angeles in December 2006 received an unfavourable judgement in a
significant litigation and is continuing to explore possible solutions to the
problems affecting the company.
Financial results
Consolidated profit after tax for the period was #647,000 compared with #671,000
at the previous half year. The investment income was #1.1m compared with #0.9m
at the previous half year. This performance was achieved despite a lower capital
base following the repayment of the zero dividend preference shares and
unfavourable foreign exchange rates due to the strengthening of the pound
against the United States dollar and the resultant effects on the revenue of the
Company. A substantial part of the revenue received by the Company is received
in the second half, and the Directors are confident that in the absence of
unforeseen circumstances the total revenue for the year to 30 September 2007
will not be less than #2.4m and the distributable revenue will not be less than
#1.5m.
A charge of #205,000 has been reflected in the Consolidated Income Statement,
being the movement in the equity-based derivative for the redemption premium
payable to Investec Bank on the date the last loan facility is settled in full,
equal to 5% of the increase in market capitalisation of the LSE listed ordinary
shares of the Company from 13 September 2006, the date of funding.
The Company will pay an interim dividend of 1.5p net per share (2006: 1.5p) on
15 August 2007 to shareholders on the register at 20 July 2007.
Outlook
World stock markets have made considerable progress since the recovery from the
last bear market began in the spring of 2003 and this has been reflected in the
performance of the investment portfolio. The companies in the portfolio are
well positioned to continue to take advantage of these favourable operating
conditions and your Directors view the future with confidence.
Charles Wilkinson
Chairman
12 June 2007
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Six months ended Six months ended Year ended
31 March 2007 31 March 2006 30 September 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Gains/(losses) on financial assets at fair - 3,452 3,452 - 836 836 - 9,973 9,973
value through profit or loss
Investment income 1,112 - 1,112 903 - 903 2,597 - 2,597
Administration expenses (131) (394) (525) (127) (336) (463) (266) (803) (1,069)
Exceptional administration expenses - - - - - - (172) (516) (688)
Profit/(loss) before finance 981 3,058 4,039 776 500 1,276 2,159 8,654 10,813
costs and taxation
Interest payable (90) (270) (360) (80) (240) (320) (176) (528) (704)
Movement on the fair value of derivatives (51) (154) (205) - - - - - -
Interest receivable 48 - 48 127 - 127 448 - 448
Other finance charges - - - (5) (15) (20) - - -
Appropriation in respect of zero
dividend preference shares - - - - (585) (585) - (1,860) (1,860)
Profit/(loss) on ordinary activities 888 2,634 3,522 818 (340) 478 2,431 6,266 8,697
before taxation
Taxation (241) 241 - (147) 147 - (539) 539 -
Profit/(loss) for the period 647 2,875 3,522 671 (193) 478 1,892 6,805 8,697
Earnings per share
Return per ordinary share (basic) 2 3.04p 13.50p 16.54p 3.16p (0.91p) 2.25p 8.88p 31.96p 40.84p
Return per ordinary share (diluted) 2 3.04p 13.50p 16.54p 3.16p (0.91p) 2.25p 8.88p 31.96p 40.84p
Return per zero dividend preference - - - - 7.20p 7.20p - - -
share
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS. The supplementary revenue and capital columns
are both prepared under guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing operations.
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY (UNAUDITED)
Share Share Special Capital Own Other Other Retained Total
Capital Premium Reserve Redemption shares equity capital earnings
Reserve reserve reserve
For six months ended 31 March #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
2007
Net assets at 30 September 5,396 - 9,380 7,107 (171) - 3,179 2,227 27,118
2006
Profit for the period - - - - - - 2,875 647 3,522
Cancellation of ZDP shares - - (2,024) 1,013 - - 1011 - -
Cancellation of ordinary (68) - - 68 - - (258) - (258)
shares
Ordinary dividend paid - - - - - - - (1,178) (1,178)
Movement in own shares - - - - 103 - - - 103
Net assets at 31 March 2007 5,328 - 7,356 8,188 (68) - 6,807 1,696 29,307
Share Share Special Capital Own Other Other Retained Total
Capital Premium Reserve Redemption shares equity capital earnings
Reserve reserve reserve
For the six months ended 31 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
March 2006
Net assets at 30 September 5,396 23,588 - - (171) 33 (11,058) 1,307 19,095
2005
Profit for the period - - - - - - (193) 671 478
Ordinary dividend paid - - - - - - - (648) (648)
Net assets at 31 March 2006 5,396 23,588 - - (171) 33 (11,251) 1,330 18,925
Share Share Special Capital Own Other Other Retained Total
Capital Premium Reserve Redemption shares equity capital earnings
Reserve reserve reserve
For the year ended 30 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
September 2006
Net assets at 30 September 5,396 23,588 - - (171) 33 (10,727) 1,307 19,426
2005 (restated)
Profit for the year - - - - - (33) 6,805 1,892 8,664
Ordinary dividend paid - - - - - - - (972) (972)
Transfer to Special Reserve - (23,588) 23,588 - - - - - -
Cancellation of ZDP shares - - (14,208) 7,107 - - 7,101 - -
Net assets at 30 September 5,396 - 9,380 7,107 (171) - 3,179 2,227 27,118
2006
CONSOLIDATED BALANCE SHEET (UNAUDITED)
31 March 2007 31 March 2006 30 September 2006
Notes #'000 #'000 #'000 #'000 #'000 #'000
Non-current assets 7 14 10
Property, plant and equipment
Investments
Fair value through profit or loss
- Listed investments 7,550 2,672 6,994
- Unlisted investments 22,705 34,380 22,042
30,255 37,052 29,036
30,262 37,066 29,046
Current assets
Receivables 3,778 203 7809
Cash and cash equivalents 2,408 8,341 3,123
6,186 8,544 10,932
Total assets 36,448 45,610 39,978
Current liabilities
Payables (108) (364) (635)
Bank loans - (11,367) (2,137)
Zero dividend preference shares - (14,954) (2,024)
(108) (26,685) (4,796)
Total assets less current liabilities 36,340 18,925 35,182
Non-current liabilities
Bank loans (6,828) - (8,064)
Derivative financial instrument (205) - -
Net assets 29,307 18,925 27,118
Equity
Ordinary share capital 5,328 5,396 5,396
Special Reserve 7,356 - 9,380
Share premium account - 23,588 -
Capital Redemption Reserve 8,188 - 7,107
Other capital reserves 6,807 (11,251) 3,179
Retained earnings 1,696 1,330 2,227
Other equity reserve - 33 -
Own share reserve (68) (171) (171)
Total equity 29,307 18,925 27,118
Allocation of shareholders' funds
Net asset value per ordinary
25p share (basic) 3 137.54p 89.15p 127.27
Net asset value per ordinary
25p share (diluted) 3 137.54p 89.15p 127.27
Net asset value per zero dividend preference share - 191.75p -
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Six months ended Six months ended Year ended
31 March 2007 31 March 2006 30 September 2006
#'000 #'000 #'000 #'000 #'000 #'000
Net income from operations before tax 3,522 478 8,697
Depreciation 3 1 5
(Increase)/decrease in receivables 4,032 (12) 27
Increase/(decrease) in payables (527) (6) 259
(Gains)/losses on investments held at (3,452) (836) (9,973)
fair value through profit and loss
(Gain)/loss on derivative 205 - -
Other finance charges - 20 -
Receipt from EBT scheme 103 - -
Appropriation in respect of zero - 585 1,860
dividend preference shares
Cash generated by operations 3,886 230 875
Net cashflow from operating activities 3,886 230 875
Investing activities
Purchase of investments (1) (200) (475)
Sale of investments 2,122 3,918 13,722
Net cash inflow from investment activities 2,121 3,718 13,247
Net cash inflow before financing 6,007 3,948 14,122
Financing activities
Purchase of shares (2,284) - (14,276)
Repayment of loan (3,373) (365) (365)
Equity dividend paid (1,178) (648) (972)
Net cash outflow from financing (6,835) (1,013) (15,613)
Increase/(decrease) in cash (828) 2,935 (1,491)
Effect of foreign exchange rate changes 113 68 (724)
Changes in cash and cash equivalents (715) 3,003 (2,215)
Cash and cash equivalents at beginning of period 3,123 5,338 5,338
Cash and cash equivalents at end of period 2,408 8,341 3,123
Asset Management Investment Company PLC
Notes to the Financial Statements:
1. Accounting policies
a. Basis of preparation
The financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), comprising standards and interpretations
approved by the International Accounting Standards Board ("IASB") and
interpretations issued by the International Financial Reporting Interpretations
Committee of the IASB ("IFRIC") that remain in effect, to the extent that they
have been adopted by the European Union. The Consolidated financial Statements
are presented in pounds sterling, rounded to the nearest thousand.
The financial statements are prepared under the historic cost convention except
for measurement at fair value of investments. The financial statements have been
prepared on an ongoing basis. The principal accounting policies adopted are set
out below. Where presentational guidance set out in the Statement of Recommended
Practice ("the SORP") for investment trusts issued by the Association of
Investment Companies ("the AIC") in December 2005 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. Valuation of investments
Investments are classified as financial assets at fair value through profit or
loss.
(i) Listed investments are initially recognised on purchase at trade
date and measured at fair value. Subsequent to initial recognition, all listed
investments are measured at fair value.
(ii) Unlisted investments are valued by the Directors at fair
value having regard to the International Private Equity and Venture Capital
Valuation Guidelines. They are valued at cost unless subsequent financing or
other circumstances indicate a different valuation is appropriate. When a
valuation is undertaken consideration is given to the most recent information
available, including the latest trading figures, performance against forecast,
management's view of prospects and the price of any transaction in the security.
Realisable value in the short term could differ materially from the amount at
which these investments are included in the financial statements.
(iii) Changes in the fair value of all held-at-fair-value assets are taken to
the Consolidated Income Statement.
(iv) Investments are de-recognised at the trade date of disposal.
On disposal, realised gains and losses are recognised in the Income Statement.
c. Presentation of Consolidated Income Statement
In order to better reflect the activities of an investment trust company, and in
accordance with guidance issued by the Association of Investment Companies ('
AIC'), supplementary information which analyses the Income Statement between
items of a revenue and capital nature has been presented alongside the Income
Statement. In accordance with the Company's status as a UK investment company
under section 266 of the Companies Act 1985, net capital returns may not be
distributed by way of dividend. Additionally, the net revenue is the measure
the directors believe appropriate in assessing the Group's compliance with
certain requirements set out in section 842 of the Income and Corporation Taxes
Act 1988.
d. Income
Dividends receivable on equity shares are recognised as revenue for the year on
an ex-dividend basis. Dividends receivable on equity shares where no ex-dividend
date is quoted are brought into account when the Company's right to receive
payment is established. Income from fixed interest debt securities is
recognised using the effective interest rate method. Bank deposit interest is
accounted for on an accruals basis.
e. Expenses
All expenses and interest payable are accounted for on an accruals basis.
Expenses are charged to the capital column of the Income Statement (net of tax)
where a connection with the maintenance or enhancement of the value of the
investments can be demonstrated. In this respect all expenses have been
allocated 75 per cent to the capital column of the Income Statement and 25 per
cent to the revenue column of the Income Statement, in line with the Board's
relative expected long-term returns in the form of capital gains and income
respectively from the investment portfolio of the group.
g. Taxation
The charge for taxation is based on taxable profits for the period.
Deferred taxation is provided on all taxable temporary differences that have
originated but not reversed by the balance sheet date, other than those
differences regarded as permanent. Any liability to deferred tax is provided at
the average rate of tax expected to apply, based on tax law that had been
enacted or substantially enacted by the balance sheet date. A deferred tax
asset is recognised only to the extent that it is considered probable that
sufficient taxable profits will be available to allow the deferred tax benefits
of that asset to be utilised.
h. Foreign currency
For the purposes of the consolidated accounts, the results and financial
position of each entity are expressed in pounds sterling, which is the
functional currency of the Company and the presentational currency of the Group.
Sterling is the functional currency because it is the currency of the primary
economic environment in which the Group operates.
Transactions recorded in overseas currencies during the year are translated into
sterling at the appropriate daily exchange rates. Assets and liabilities
denominated in overseas currencies at the balance sheet date are translated into
sterling at the exchange rates ruling at that date. Exchange differences are
dealt with in the capital column of the Income Statement or revenue column of
the Income Statement depending on the nature of the transaction.
i. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and money held by the Company's
bankers on fixed term deposit.
j Property, plant and equipment
Depreciation is provided on a straight-line basis on all property, plant and
equipment at rates calculated to write off each asset over its expected useful
life as follows:
Office equipment - over 3 years
Fixtures and fittings - over 6 years
k. Bank borrowings
Interest-bearing bank loans and overdrafts are recorded as the proceeds are
received, net of direct issue costs. Finance charges, including premiums
payable on settlement or redemption and direct issue costs, are accounted for on
an accruals basis in the Income Statement using the effective interest rate
method and are added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.
l. Capital instruments
The ordinary shares are classified as equity share capital whilst
the zero dividend preference shares are classified as a debt instrument and
included within liabilities. The cost of providing for the accrued premium
payable on the zero dividend preference shares is recognised in the capital
column of the Income Statement and included as part of finance costs.
m. Dividends payable
Dividends are recognised from the date on which they are paid.
n. Going concern and valuation of investments
Whilst the Company's Articles of Association previously contained a provision
that the company had a fixed duration to 27 October 2006, on 20 October 2006 the
shareholders voted to continue the Company and the Company adopted a new
investment objective requiring the Company to effect an orderly realisation of
its investment portfolio. Therefore, the financial statements have been prepared
on a going concern basis.
o. Pension costs
Contributions made by the Company to personal pension plans held by the
employees are charged to the Income Statement as incurred.
2. Earnings per share
The earnings per ordinary share are based on the profit (loss) after taxation
#647,000 (2006 - #671,000) and on 21,307,632 (2006 - 21,228,665) being the
weighted number of ordinary shares in issue during period, following adjustments
for shares held in the All Share Employee Share Ownership Plan.
(Unaudited) (Unaudited) (Audited)
Half year ended 31 March Half year ended 31 March Year ended 30 September
2007 2006 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Profit/(loss) for the period 647 2,875 3,522 671 (193) 478 1,892 6,805 8,697
Earnings per share
Return per ordinary share 3.04p 13.50p 16.54p 3.16p (0.91p) 2.25p 8.88p 31.96p 40.84p
(basic)
3. Net asset value
The net asset value per ordinary share for the Group at 31 March 2007 is based
on a net asset value of #29,307,000 (2006 - #18,925,000) and on 21,307,632 (31
March 2006 - 21,228,665) ordinary shares in issue at year-end as noted above.
4. Transaction costs
Half year ended 31 March 2007 Half year ended 31 March 2006 Year ended 30 September 2006
#000 #000 #000
Purchases 1 - -
Sales 19 1 1
5. Special Dividend
No provision has been made for the special dividend of 2p per share paid to
shareholders on 20 April 2007 in these interim financial statements because
under IFRS, the special dividend is not recognised until paid to shareholders.
6. Basis of preparation
The financial information contained in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
financial information for the half years ended 31 March 2007 and 31 March 2006
has not been audited.
The information for the year ended 30 September 2006 has been extracted from the
latest published audited accounts. The audited accounts for the year ended 30
September 2006 have been filed with the Registrar of Companies. The report of
the auditors on those accounts contained no qualification or statement under
either section 237(2) or (3) of the Companies Act 1985.
For further information please contact:
George Robb
Managing Director and Chief Investment Officer
Tel: 020 7618 9041
E-mail: grobb@amicplc.com
Bharat Bhagani
Company Secretary
Tel: 020 7618 9044
E-mail: bbhagani@amicplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
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