RNS Number:9247O
Blue Planet Fin GW&INC I.T.9 PLC
19 December 2001
Blue Planet Financials Growth and Income Investment Trust No 1 plc
Blue Planet Financials Growth and Income Investment Trust No 2 plc
Blue Planet Financials Growth and Income Investment Trust No 3 plc
Blue Planet Financials Growth and Income Investment Trust No 4 plc
Blue Planet Financials Growth and Income Investment Trust No 5 plc
Blue Planet Financials Growth and Income Investment Trust No 6 plc
Blue Planet Financials Growth and Income Investment Trust No 7 plc
Blue Planet Financials Growth and Income Investment Trust No 8 plc
Blue Planet Financials Growth and Income Investment Trust No 9 plc
Blue Planet Financials Growth and Income Investment Trust No 10 plc
Each of the investment trusts is a separate limited company, but otherwise they
are to all intents and purposes identical. The information contained in this
Interim Report including the financial statements applies equally to each of
the ten Trusts.
Trading in the shares and warrants of the Trusts
The trusts' shares and warrants can be traded in share or warrant units. Each
unit comprises 10 shares or warrants respectively, 1 in each of the 10 trusts.
Generally it is cheaper for investors to trade in the units rather than the
underlying shares or warrants.
Objective
The ten Blue Planet Financials Growth and Income Investment Trusts offer
investors a high level of income combined with capital growth and the
opportunity to profit from the ongoing rationalisation of the Financial
Services sector, including conversion of Building Societies.
Financial Highlights
Six months Six months Year ended
ended ended 31 March
30 September 30 September 2001
2001 2000
(unaudited) (unaudited)
Pence per
ordinary share
Net asset 128.39 128.56 139.43
value-basic
Net asset 123.83 124.04 133.08
value-diluted
Dividend 1.50 1.50 4.30
Earnings 3.22 2.96 3.87
Capital Return (12.74) (1.54) 10.28
Total (9.52) 1.42 14.15
Return-basic
Dividend
An interim dividend of 1.5p net per ordinary share has been declared, payable
on 29 January 2002, to shareholders on the register on 31 December 2001. The
Trusts' shares will be quoted ex-dividend 27 December 2001.
Capital Gains Tax
Apportionment for capital gains tax between ordinary shares and warrants based
on mid-market prices on the first day (25 April 1996) of dealings in the
ordinary shares and the warrants:
Each ordinary share 95.24p
Each warrant 23.80p
Chairman's Report
At the Trusts Annual General Meetings in August, special resolutions were
passed to change their names from the Cairngorm Building Societies Investment
Trusts to the Blue Planet Financials Growth & Income Investment Trusts.
Interim Results
This interim report covers a period, the latter stages of which, were severely
affected by the decline in equity markets which followed the tragic attack on
the New York World Trade Centre. Over the period the Trust's net asset value
fell 7.9% to 128.4p per share, or expressed another way, to #12.84 per
ordinary share unit. For understandable reasons, investors never like to see
the value of their investments fall but it is worth noting that our
performance has been significantly better than that of the FTSE 100 index
which fell 13.0% over the same period. Given the difficult market conditions,
I am pleased with our outperformance which once again vindicates the defensive
attractions of our portfolio. I am also pleased to recommend an unchanged
interim dividend of 1.5p per share.
Despite the bear market the price of the Trusts' ordinary share units
increased slightly, by 0.8% to 997.5p over the period. Indeed, the price
performance of the Trusts' ordinary share units has been amongst the best of
all investment trusts over the last year as figures from Trustnet
(www.trustnet.com) show. These put Blue Planet Financials Growth and Income in
the top quartile of all 302 conventional investment trusts.
Prospects
Financial markets generally have regained confidence following the World Trade
Centre attack. This has largely been provoked by co-ordinated worldwide cuts
in interest rates. Nevertheless, economic indicators from the United States
are suggesting that a rapid slowdown in activity is occurring in that country.
That will have an impact on the UK and European economies where we expect it
to manifest itself either as very low growth or a mild recession.
The recent 0.25% cut in US interest rates takes its benchmark federal funds
rate to 1.75% - the lowest in 40 years. Coincidentally, UK inflation in
November was running at an annualised rate of 0.9% - again the lowest rate in
40 years.
In the UK, the Chancellor's recent budget speech announced increased
expenditure, and in the case of the Public Health Service significantly higher
expenditure. This concerns us as we anticipate reduced tax revenues being
available to the Exchequer as the economy slows down. This is likely to lead
to a rise in government borrowings as it attempts to fund its spending plans.
This in turn will increase interest rates and have an adverse impact on the
long end of the yield curve where many of our bond investments are. For this
reason, we are now realising some of the substantial profits we have made on
these investments with a view to reinvesting the monies in equities which
offer better returns over the medium term.
From the point of view of stockmarkets, low interest rates have a beneficial
effect. Savers who have seen interest rates on deposit accounts fall are now
more encouraged to invest money in equities. In many cases, including Blue
Planet Financials Growth and Income, investors receive a better annual
dividend return than they would receive from savings accounts with banks or
building societies. Lower interest rates are also likely to stimulate the
economy as they encourage investment and expenditure.
As regards the banking sector, the main area of concern over coming months
will be increasing provisions for bad debts. This can be expected to
negatively affect their earnings over the next six months. However, this has
to a large extent already been priced into the shares of banks and we expect
the sector to continue to outperform in the coming years and to provide a
solid basis for any good portfolio. Our ordinary share units provide investors
who want an exposure to this sector with just that.
The Trust has recently successfully refinanced its long-term loans with a new
#750,000 facility which will commence in January 2002. This facility carries
an interest rate of 5.99% and the rate is fixed for 10 years. This is a very
attractive rate of interest for 10 year money and we believe that the new
facility will be of great benefit to investors over the coming years.
Shareholders may also be pleased to know that the net asset value per share
has risen by 8.5%, to 139.3p, in the two months since the end of the interim
period although the share price discount to net asset value has risen to 33%.
This increased discount arising because investors are either unaware, or have
been slow to react to this growth. The Trust is well placed to take advantage
of the current weakness in equity markets, we have correctly predicted and
profited from the interest rate cycle and we now look forward to profiting
from an upturn in equities over the coming years. The outlook for 2002 is good
and we look forward to it. Finally, may I thank all shareholders for their
loyal support and wish them a happy and a prosperous 2002.
Philip Court
Chairman
18 December 2001
Statement of Total Return
(incorporating the revenue account)
For the six months ended For the six months ended
30 September 2001 30 September 2000
(unaudited) (unaudited)
Revenue Capital Total Revenue Capital Total
# # # # # #
Capital
(losses)/gains on
investments
Net realised gains - - - - 14,510 14,510
Unrealised (164,093)(164,093) - (29,885) (29,885)
(losses)/appreciati
on on investments
Total capital - (164,093)(164,093) - (15,375) (15,375)
gains/(losses) on
investments
Gross revenue
Income from 91,017 - 91,017 83,318 - 83,318
investments
Other interest 2,317 - 2,317 7,173 - 7,173
receivable
Gross revenue and 93,334 (164,093) (70,759) 90,491 (15,375) 75,116
capital losses
Administrative (24,973) (7,990) (32,963) (21,836) (3,994) (25,830)
expenses
Net return on 68,361 (172,083)(103,722) 68,655 (19,369) 49,286
ordinary
activities before
interest payable
and taxation
Interest payable (11,050) (11,050) (22,100) (16,603) (5,534) (22,137)
Net return on 57,311 (183,133)(125,822) 52,052 (24,903) 27,149
ordinary
activities before
taxation
Taxation on net (12,397) 5,241 (7,156) (9,373) 2,740 (6,633)
revenue on
ordinary activities
Net return 44,914 (177,892)(132,978) 42,679 (22,163) 20,516
attributable to
ordinary
shareholders
Dividends in
respect of equity
shares
Interim dividend (20,961) - (20,961) (21,394) - (21,394)
of 1.5p (2000 -
1.5 p) per share
Final dividend of - - - - - -
2.8p (2000 - 2.8p)
per share
(21,394) - (21,394)
Transfer to 23,953 (177,892)(153,939) 21,285 (22,163) (878)
reserves
Return per 3.22p (12.74)p (9.52)p 2.97p (1.54)p 1.43p
ordinary share -
basic
Return per 3.19p (12.54)p (9.45)p 2.97p (1.54)p 1.43p
ordinary share -
diluted
The Revenue column of the statement represents the revenue account of the
Company.
Statement of Total Return
(incorporating the revenue account)
For the year ended 31 March 2001
Revenue Capital Total
# # #
Capital (losses)/gains on investments
Net realised gains - 55,968 55,968
Unrealised (losses)/appreciation on - 105,308 105,308
investments
Total capital gains/(losses) on investments - 161,276 161,276
Gross revenue
Income from investments 144,897 - 144,897
Other interest receivable 7,579 - 7,579
Gross revenue and capital losses 152,476 161,276 313,752
Administrative expenses (49,034) (7,836) (56,870)
Net return on ordinary activities before 103,442 153,440 256,882
interest payable and taxation
Interest payable (36,249) (12,083) (48,332)
Net return on ordinary activities before 67,193 141,357 208,550
taxation
Taxation on net revenue on ordinary (12,039) 5,259 (6,780)
activities
Net return attributable to ordinary 55,154 146,616 201,770
shareholders
Dividends in respect of equity shares
Interim dividend of 1.5p (2000 - 1.5 p) (21,394) - (21,394)
per share
Final dividend of 2.8p (2000 - 2.8p) per (39,096) - (39,096)
share
(60,490) - (60,490)
Transfer to reserves (5,336) 146,616 141,280
Return per ordinary share - basic 3.87p 10.28p 14.15p
Return per ordinary share - diluted 3.87p 10.28p 14.15p
The Revenue column of the statement represents the revenue account of the
Company.
Balance Sheet
At 30 At 30 At 31 March
September 2001 September 2000 2001
(unaudited) (unaudited)
# # #
Fixed asset investments
Listed on a recognised investment 2,457,081 2,347,534 2,581,182
exchange
Current assets 125,228 273,876 175,049
Creditors: amounts falling due (788,251) (787,774) (809,354)
within one year
Net current liabilities (663,023) (513,898) (634,305)
Net assets 1,794,058 1,833,636 1,946,877
Capital and reserves
Called-up share capital 139,740 142,628 139,628
Share premium account 1,168,061 1,166,787 1,166,787
Other reserves
Capital reserve - realised 126,656 135,786 140,455
Capital reserve - unrealised 247,813 276,713 411,906
Capital redemption reserve 4,500 1,500 4,500
Warrant reserve 63,518 63,784 63,784
Revenue reserve 43,770 46,438 19,817
Ordinary Shareholders' Funds 1,794,058 1,833,636 1,946,877
Net Asset Value per Ordinary 128.39p 128.56p 139.43p
Share - basic
Net Asset Value per Ordinary 123.90p 124.04p 133.08p
Share - diluted
Cashflow
For the For the For the
six months period year ended
ended ended 31 March
30 30 2001
September September
2001 2000
(unaudited) (unaudited)
# # #
Operating activities
Cash received from 65,892 62,042 131,273
investments
Interest received 1,728 628 7,579
Investment management and (15,752) (15,186) (30,662)
secretarial fees paid
Cash paid to and on behalf - (2,190) (2,700)
of directors
Other cash payments (18,308) (12,191) (24,252)
Net cash inflow from 33,560 33,103 81,238
operating activities
Servicing of finance
Interest paid (27,084) (25,320) (46,313)
Taxation
Tax recovered - 16,204 16,204
Capital expenditure and
financial investment
Purchase of investments (39,994) - (214,554)
Sale of investments - 147,175 304,732
Equity dividend paid (39,096) (46,112) (67,507)
Financing
Purchase of own shares for - (14,204) (43,120)
cancellation
Proceeds from share issue 1,120 260 260
(Decrease)/increase in cash (71,494) 111,106 30,940
Notes
1. The Company has adopted the recommendations of the Statement of
Recommended Practice "Financial Statements of Investment Trust Companies"
(SORP). A statement of total return is presented on page 3 which combines the
revenue account and the statement of realised and unrealised capital gains to
give a "total return". A separate revenue account is therefore not required.
2. All expenses are charged to the revenue account with the exception of
management fees and interest charges on borrowings, one half of which, less
the appropriate tax, are charged to capital.
3. The return per ordinary share is based upon the following figures:
30 Sept 30 Sept 31 March
2001 2000 2001
Revenue return #44,914 #42,679 #55,154
Capital return #(177,892) #(22,163) #146,616
Weighted average number of ordinary shares in
issue during the period - basic 1,396,467 1,438,563 1,426,399
Weighted average number of ordinary shares in
issue during the period - diluted 1,407,755 1,438,563 1,426,399
4. The net asset value per ordinary share is calculated on 1,397,400
ordinary shares being the number of ordinary shares in issue at the end of the
period. At 30 September 2001 there were 266,880 warrants in issue. Each
warrant confers the right, exercisable normally on 31 July in any of the years
1999 to 2010 inclusive, to subscribe for one new ordinary share at #1.00 per
share. Net asset dilution arises from the potential exercise of outstanding
warrants and is assumed only to take place if the net assets exceed the
exercise price of #1.00.
5. The figures and financial information for the year ended 31 March 2001
are extracted from the latest published accounts of the Company and do not
constitute statutory accounts for the period. Those accounts have been
delivered to the Registrar of Companies and include the report of the auditors
which was unqualified and did not contain a statement either under section 237
(2) or 237(3) of the Companies Act 1985.
Portfolio Information
Top 10 Holdings
At 30 September 2001
Valuation % of
Total
Portfolio
Equities
7,760 Credit Lyonnais Ordinary NPV Shares #164,134 6.7
3,745 Erste Bank Der Oesterreichisen Sparkassen Shares #125,003 5.1
16,000 Alliance & Leicester Ordinary 50p Shares #120,000 4.9
Other #545,748 22.2
#954,885 38.9
Debt Securities
#90,000 Leeds & Holbeck Building Society 13 3/8% PIBS #162,732 6.6
#85,000 Britannia Building Society 13% PIBS #149,335 6.1
#100,000 BUPA Finance 10 1/2% Subordinated Bonds 2018 #127,063 5.2
#76,500 Coventry Building Society 12 1/8% PIBS #126,082 5.1
#70,000 Skipton Building Society 12 7/8% PIBS #122,632 5.0
#70,000 Bradford & Bingley Building Society 13% Perpetual #122,150 5.0
Subordinated Bonds
#80,000 First Active 11 3/4% Subordinated Bonds #114,800 4.7
Other #577,402 23.4
#1,502,196 61.1
#2,457,081 100.0
(PIBS - Permanent Interest Bearing Shares)
Company Information
Directors Stockbrokers
Philip Court (Chairman) Credit Lyonnais Securities
Bryan J Rankin Broadwalk House
Victoria W Killay 5 Appold Street
London EC2A 2DA
Investment Manager Registrars
Blue Planet Investment Management Lloyds TSB Registrars Scotland
Ltd P O Box 28448
20 Coates Crescent Finance House
Edinburgh EH3 7AF Orchard Brae
Telephone No: 0131 226 6040 Edinburgh EH4 1WQ
Facsimile No: 0131 226 6041 Shareholder Helpline No: 0870 601 5366
e-mail: info@blueplanet.ac
www.blueplanet.ac www.shareview.co.uk
Blue Planet Investment Management
Ltd
is regulated by the FSA.
Secretary and Registered Office Registered Numbers
Blue Planet Investment Management Registered in Scotland -
Ltd
20 Coates Crescent No. 1 Trust No. SC162796
Edinburgh EH3 7AF No. 2 Trust No. SC162797
No. 3 Trust No. SC162798
No. 4 Trust No. SC162799
No. 5 Trust No. SC162800
No. 6 Trust No. SC162801
No. 7 Trust No. SC162802
No. 8 Trust No. SC162803
No. 9 Trust No. SC162804
No. 10 Trust No. SC162805
Auditors Custodians
Deloitte & Touche The Royal Bank of Scotland (Retail Nominees)
39 George Street Ltd
Edinburgh 67 Lombard Street
EH2 2HZ London
EC3P 3DL
Bankers
LloydsTSB Scotland Plc
Henry Duncan House
120 George Street
Edinburgh
EH2 4TS
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