RNS Number:6045J
Asset Management Investment Co.PLC
11 December 2007
For immediate release Tuesday 11 December 2007
ASSET MANAGEMENT INVESTMENT COMPANY PLC
FINAL RESULTS FOR THE YEAR TO 30 SEPTEMBER 2007
Asset Management Investment Company PLC ('AMIC'), the specialist investor in the
global asset management industry, announces its results for the year to 30
September 2007.
Highlights
* Net assets �27.61 million (30 September 2006 �27.12 million)
* Gearing 17% (30 September 2006 27%)
* NAV per share 133.76p (30 September 2006 127.27p)
* Pre-tax revenue profit �2.08 million (30 September 2006 �2.43 million)
* Final dividend 4.0p net per share (2006 3.5p net per share)
* 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
The favourable operating environment for the asset management industry, on which
I commented in my statement with the results for the first six months of the
year, continued through much of the second half. The market turmoil resulting
from the subprime lending crisis in the United States commenced in August, but
has had little effect on the companies in the AMIC portfolio, other than
short-term volatility in the level of assets under management. There has been
little overall impact on valuations or on the income which your company receives
from these investments, other than as a result of the weakness of the United
States dollar.
I am therefore able to report that your Company has made encouraging progress
throughout the year. The majority of the investments in the portfolio have
performed very satisfactorily, and this has been reflected in a rising share
price and an increased net asset value per share, the current net asset value of
144.39p being close to the highest level since February 2002.
Corporate developments
At the 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 contribute to
this objective, while remaining open to any alternative ideas which will enhance
shareholder value.
Two significant income receipts resulted in your Directors declaring special
interim dividends of 2.0p each for payment in October 2006 and April 2007. Your
Directors do not believe that these income receipts will be recurring, but will
consider the payment of special interim dividends if other exceptional income is
received. None is anticipated at the present time.
In January 2007 your Board negotiated with FX Concepts the early payment of the
next tranche of $4 million due in July 2007 in terms of the agreement regarding
the disposal of the convertible rights on the loan note held by your Company.
This reduced the amount due on the US$ 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.
The discount to net asset value at which the ordinary shares trade had narrowed
significantly at the half-year stage but has widened since the equity market
downturn to a level which your Board consider does not reflect the quality of
the underlying investments. In the course of the year a total of 840,000
ordinary shares were bought back for cancellation at a cost of �918,000 and your
Board continues to be prepared to use the powers granted to them in October 2006
and renewed at the Annual General Meeting in March 2007 for further buybacks.
This is always on the proviso that the necessary combination is available of an
appropriate level of discount, the availability of shares and windows of
opportunity in the market is available.
Investment portfolio
Both AIM-listed investments held by your Company made progress during the year.
City of London Investment Group has been helped by the strong performance in
the emerging markets and currently has $4.7 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 now valued at �6.1 million compared with a cost of �0.9
million. Integrated Asset Management, which is a manager of funds of hedge
funds, recently made another significant acquisition which has increased its
assets under management to approximately $2.5 billion. The recent volatility in
stock markets has, however, resulted in a weakening of its share price despite
the considerable expansion of its business.
IFDC Group S.A., a manager of funds invested in the Japanese stock market, is
now the largest investment in the portfolio. The company continues to perform
well and is a major contributor to our revenue. FX Concepts had an excellent
year to 31 May 2007 during which revenues exceeded $104 million. The company
now has close to $14 billion under management and after six months its revenues
for the year to 31 May 2008 are ahead of the level which ensures that AMIC will
receive the maximum revenue return of $1,425,000 on its note. Principal
Investment Holdings, located in Sevenoaks, Kent performed strongly in 2006, and
now has approximately �1 billion under management. Lombardia Capital Partners
in Pasadena, California has made very encouraging progress in developing its
business and now has $1.7 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 has restored value to both the common
shares and the convertible note held by your Company. As previously reported to
shareholders, Financial Management Advisors in December 2006 received an
unfavourable judgement in a significant litigation and is continuing to explore
possible solutions to the difficult financial situation which has resulted. In
view of the uncertainties associated with the future of this company, your Board
considered it appropriate to make a full provision against the value of the
investment.
Financial results
Revenue profit before tax for the year was �2,080,000 (2006: �2,431,000), a
decrease of 14%. Profit after taxation decreased by 12% to �1,656,000 (2006:
�1,892,000) and revenue return per ordinary share decreased by 12% to 7.83p
(2006: 8.88p). As mentioned in the Interim Report 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. As previously announced your Board is
recommending payment of a final dividend of 4.0p net per share (2006: 3.5p net
per share), which together with the interim dividend of 1.5p net per share
(2006: 1.5p net per share) paid on 15 August 2007 will make a total payment of
5.5p net per share (2006: 5.0p net per share). This excludes the special
dividends of 2.0p net per share paid on 20 October 2006 and 20 April 2007
respectively, referred to above. The final dividend will be proposed at the
Annual General Meeting on 5 February 2008 for payment on 8 February 2008 to
shareholders on the register at the close of business on 11 January 2008.
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. Looking ahead, there are now greater
uncertainties present in world financial markets, resulting from the crisis in
subprime loans and collateralised debt obligations, which will probably take a
considerable time to resolve and continue to have an adverse effect on
confidence in the financial sector. The climate for the asset management
industry may therefore be less benign than has been enjoyed in recent years, but
against this more uncertain background your Board is satisfied that the majority
of the investments in the AMIC portfolio are soundly based to produce a
satisfactory performance relative to their peer groups. The companies have a
wide range of investment management strategies and have little exposure to the
principal problem areas of the financial markets, and your Board and management
will continue to work closely with them in order to maximise value for
shareholders.
Charles Wilkinson
Chairman
11 December 2007
CONSOLIDATED INCOME STATEMENT
for the year ended 30 September 2007
Year ended Year ended
30-Sep-07 30-Sep-06
Note Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Gains on on assets at fair value - 2,578 2,578 - 9,973 9,973
Investment income 2,424 - 2,424 2,597 - 2,597
Administration expenses (214) (645) (859) (266) (803) (1,069)
Exceptional administration expenses - - - (172) (516) (688)
Profit before finance costs and taxation 2,210 1,933 4,143 2,159 8,654 10,813
Interest payable (154) (460) (614) (176) (528) (704)
Movement on loan redemption derivative (63) (188) (251) - - -
Interest receivable 87 - 87 448 - 448
Zero dividend preference shares - - - - (1,860) (1,860)
Profit on ordinary activities before
taxation 2,080 1,285 3,365 2,431 6,266 8,697
Taxation (424) 291 (133) (539) 539 -
Profit for the period 1,656 1,576 3,232 1,892 6,805 8,697
Earnings per share
Return per ordinary share (basic) 5 7.83p 7.46p 15.29p 8.88p 31.96p 40.84p
Return per ordinary share (diluted) 5 7.83p 7.46p 15.29p 8.88p 31.96p 40.84p
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 GROUP BALANCE SHEET
for the year ended 30 September 2007
30 September 2007 30 September 2006
Note Group Company Group Company
�'000 �'000 �'000 �'000
Non-current assets 3 3 10 10
Property, plant and equipment
Investments
Fair value through profit or loss
- Listed investments 6,964 6,964 6,994 6,994
- Unlisted investments 21,529 21,759 22,042 22,354
28,496 28,726 29,046 29,358
Current assets
Receivables 3,669 3,669 7,809 7,798
Cash and cash equivalents 1,424 1,399 3,123 3,123
Total assets 33,589 33,794 39,978 40,279
Current liabilities
Payables (196) (390) (635) (803)
Bank loans (1,963) (1,963) (2,137) (2,137)
Zero dividend preference shares - - (2,024) (2,024)
(2,159) (2,353) (4,796) (4,964)
Total assets less current liabilities 31,430 31,441 35,182 35,315
Non-current liabilities
Bank loans (3,567) (3,567) (8,064) (8,064)
Loan Redemption Derivative (251) (251) - -
Net assets 27,612 27,623 27,118 27,251
Equity
Ordinary share capital 5,186 5,186 5,396 5,396
Special Reserve 6,438 6,438 9,380 9,380
Capital Redemption Reserve 8,330 8,330 7,107 7,107
Other capital reserves 5,766 5,470 3,179 2,995
Retained earnings 1,960 2,267 2,227 2,544
Own share reserve (68) (68) (171) (171)
Total equity 27,612 27,623 27,118 27,251
Allocation of shareholders' funds
Net asset value per ordinary
25p share (basic) 4 133.76p 133.82p 127.27p 127.89p
Net asset value per ordinary
25p share (diluted) 4 133.76p 133.82p 127.27p 127.89p
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2007
Group
Share Special Capital Redemption Own shares Other Retained Total
capital Reserve Reserve capital earnings
reserve
�'000 �'000 �'000 �'000 �'000 �'000 �'000
Net assets at 5,396 9,380 7,107 (171) 3,179 2,227 27,118
30 September
2006
Cancellation (210) (918) 210 - - - (918)
of Ordinary
shares
Cancellation - (2,024) 1,013 - 1,011 - -
of ZDP shares
Profit for - - - - 1,576 1,656 3,232
the period
Ordinary - - - - - (1,923) (1,923)
dividend paid
Movement in - - - 103 - - 103
own shares
Net assets at 5,186 6,438 8,330 (68) 5,766 1,960 27,612
30 September
2007
Company
Share Special Capital Redemption Own shares Other Retained Total
capital Reserve Reserve capital earnings
reserve
�'000 �'000 �'000 �'000 �'000 �'000 �'000
Net assets at 5,396 9,380 7,107 (171) 2,995 2,544 27,251
30 September
2006
Cancellation (210) (918) 210 - - - (918)
of ordinary
shares
Cancellation - (2,024) 1,013 - 1,011 - -
of ZDP shares
Profit for - - - - 1,464 1,646 3,110
the period
Ordinary - - - - - (1,923) (1,923)
dividend paid
Movement in - - - 103 - - 103
own shares
Net assets at 5,186 6,438 8,330 (68) 5,470 2,267 27,623
30 September
2007
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2006
Group
Share Share Special Capital Own Other Other Retained Total
capital Premium Reserve Redemption shares equity capital earnings
Reserve reserve reserve
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Net assets at 5,396 23,588 - - (171) 33 (10,727) 1,307 19,426
30 September
2005
Transfer to - (23,588) 23,588 - - - - - -
special
reserve
Cancellation - - (14,208) 7,107 - - 7,101 - -
of shares
Profit for - - - - - (33) 6,805 1,892 8,664
the period
Ordinary - - - - - - - (972) (972)
dividend paid
Net assets at 5,396 - 9,380 7,107 (171) - 3,179 2,227 27,118
30 September
2006
Company
Share Share Special Capital Own Other Other Retained Total
capital Premium Reserve Redemption shares equity capital earnings
Reserve reserve reserve
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
Net assets at 5,396 23,588 - - (171) 33 (11,192) 1,624 19,278
30 September
2005
Transfer to - (23,588) 23,588 - - - - - -
special
reserve
Cancellation - (14,208) 7,107 7,101 - -
of shares
Profit for - - - - - (33) 7,086 1,892 8,945
the period
Ordinary - - - - - - - (972) (972)
dividend paid
Net assets at 5,396 - 9,380 7,107 (171) - 2,995 2,544 27,251
30 September
2006
CASH FLOW STATEMENT 30 SEPTEMBER 2007
for the year ended 30 September 2007
30-Sep-07 30-Sep-06
Group Company Group Company
�'000 �'000 �'000 �'000
Net income from operations before tax 3,365 3,240 8,697 9,236
Depreciation 7 7 5 5
(Increase)/decrease in receivables 4,140 4,129 27 27
Increase/(decrease) in other (572) (546) 259 296
payables
(Gains)/losses on investments held at fair (2,578) (2,493) (9,973) (10,227)
value through profit and loss
(Gains)/loss on derivative 251 251
Receipt from EBT scheme 103 103 - -
Appropriation in respect of zero dividend - - 1,860 1,860
preference shares
Cash generated by operations 4,716 4,691 875 1,197
Taxes refunded - - - -
Net cashflow from operating activities 4,716 4,691 875 1,197
Investing activities
Purchase of investments (2) (2) (475) (475)
Sale of investments 2,656 2,656 13,722 13,437
Net cash inflow from investing activities 2,654 2,654 13,247 12,962
Net cash inflow from investing activities 7,370 7,345 14,122 14,159
Financing activities
Repurchase of ZDP shares (2,024) (2,024) (14,276) (14,276)
Repurchase of ordinary shares (918) (918) - -
Repayment of loan (4,671) (4,671) (365) (378)
Equity dividend paid (1,923) (1,923) (972) (972)
Net cash outflow from financing (9,536) (9,536) (15,613) (15,626)
Increase/(decrease) in cash (2,166) (2,191) (1,491) (1,467)
Effect of foreign exchange rate changes 467 467 (724) (724)
Changes in cash and cash equivalents (1,699) (1,724) (2,215) (2,191)
Cash and cash equivalents at beginning of 3,123 3,123 5,338 5,314
period
Cash and cash equivalents at end of period 1,424 1,399 3,123 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
issued by the International Accounting Standards Board ("IASB") as adopted by
the European Union and in accordance with Companies Act 1985. 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. Where fair values cannot be reliably measured, they are
valued at cost less impairment. 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 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.
f. 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.
g. 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.
h. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and money held by the Company's
bankers on fixed term deposit.
i 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
j. 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.
k. Financial instruments
The ordinary shares are classified as equity share capital
l. Dividends payable
Dividends to shareholders are recognised as a liability in the financial
statements from the date on which they are legally distributable.
m. 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.
n. Pension costs
Contributions made by the Company to personal pension plans held by the
employees are charged to the Income Statement as incurred.
2. Dividends
An interim dividend of 1.5p was paid on 15 August 2007 to the shareholders on
the register on 20 July 2007. A special interim dividend of 2.0p was paid on 20
April 2007 to the shareholders on the register on 30 March 2007. A final
dividend of 4.0p will be proposed at the next Annual General Meeting.
3. Return per share
Basic returns per ordinary share are calculated on the basis of retained net
revenue after taxation divided by the weighted average number of shares in issue
during the period being 20,642,632 (30 September 2006: 21,307,632) following
adjustments for shares held in an Employee Benefit Trust and All Employee Share
Ownership Plan.
4. Net asset value
The net asset value per ordinary share for the Group is based on a net asset
value of �27,612,000 (30 September 2006 - �27,118,000) and on 20,642,632 (30
September 2006 - 21,307,632) ordinary shares in issue at year-end.
The basic net asset value per ordinary share as at 30 September 2007 is
calculated on the basis of net assets attributable to equity shareholders
divided by the number of shares that would be in issue following adjustment for
shares held in Employee Benefit Trust (100,000) and All Employee Share Ownership
Plan (2,794).
5. Earnings per share
The earnings per ordinary share is based on the net profit after taxation of �
1,656,000 (2006 - � 1,892,000) and on 21,148,413 (2006 - 21,307,632) being the
weighted average number of ordinary shares in issue during the year following
for adjustments of shares held in an Employee Benefit Trust and All Share
Employee Share Ownership Plan.
2007 2006
�000 �000 �000 �000 �000 �000
Revenue Capital Total Revenue Capital Total
Profit/(loss) for the period 1,656 1,576 3,232 1,892 6,805 8,697
Earnings per share
Return per ordinary share (basic) 7.83p 7.46p 15.29p 8.88p 31.96p 40.84p
6. Basis of preparation
The financial information set out above does not constitute statutory accounts
as defined in section 240 of the Companies Act 1985.
The statutory accounts for 2007 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 Annual General Meeting.
Copies of the Annual Report for 2007 will be posted to shareholders on 10th
January 2008.
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
END
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