TIDMIAEM TIDMIAES
RNS Number : 4141B
Impax Asian Environmental Mkts Plc
17 February 2011
IMPAX ASIAN ENVIRONMENTAL MARKETS PLC
HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
INVESTMENT OBJECTIVE
The Company's investment objective is to generate long-term
capital growth through investment in a diverse portfolio of quoted
companies in the markets for cleaner or more efficient delivery of
basic services of energy, water and waste in the Asia Pacific
Region. To be eligible for investment, such companies must have at
least 20 per cent. of their turnover, profits or invested capital
in these markets.
FINANCIAL INFORMATION
At 31 December At 30 June
2010 2010 % change
------------------------------------ --------------- ------------ ---------
Net assets GBP288.9m GBP127.0m +127.5%
------------------------------------ --------------- ------------ ---------
Number of Ordinary Shares in issue 214,915,100 114,949,000 +87.0%
------------------------------------ --------------- ------------ ---------
Net asset value ("NAV") per
Ordinary Share
------------------------------------ --------------- ------------ ---------
-- Undiluted 134.4p 110.5p +21.6%
------------------------------------ --------------- ------------ ---------
-- Diluted 129.1p 108.9p +18.5%
------------------------------------ --------------- ------------ ---------
NAV per Ordinary Share (excluding
current period net revenue)
------------------------------------ --------------- ------------ ---------
-- Undiluted 134.2p 110.0p +22.0%
------------------------------------ --------------- ------------ ---------
-- Diluted 128.9p 108.4p +18.9%
------------------------------------ --------------- ------------ ---------
MSCI AC Asia Pacific (ex-Japan)
Index (sterling) 307.2 255.3 +20.3%
------------------------------------ --------------- ------------ ---------
FTSE Environmental Opportunities
Asia Pacific (ex-Japan) Index
(sterling) 198.3 159.5 +24.3%
------------------------------------ --------------- ------------ ---------
FTSE Environmental Opportunities
Japan Index (sterling) 1.356 1.164 +16.5%
------------------------------------ --------------- ------------ ---------
Ordinary Share price 128.8p 112.8p +14.2%
------------------------------------ --------------- ------------ ---------
Subscription Share price 34.5p 33.8p +2.1%
------------------------------------ --------------- ------------ ---------
Ordinary Share price (discount) /
premium to diluted NAV (0.2%) +3.6% -
------------------------------------ --------------- ------------ ---------
Sources: Bloomberg, Cavendish Administration Limited
CHAIRMAN'S REVIEW
Following its launch in October 2009, Impax Asian Environmental
Markets plc ("IAEM" or the "Company") performed well and attracted
a high level of interest from investors. I am pleased to report
that this strong performance and investor interest has continued
into the six month period ended 31 December 2010 (the
"Period").
Price performance and comment
The Company continued to perform well, posting a rise in
undiluted net asset value (excluding income) of 22.0% over the
Period. The breadth of strong performance across the sub-sectors
and countries continued to be encouraging, with energy efficiency
and China notable performers. The Company performed broadly in line
with the MSCI AC Asia Pacific (ex-Japan) Index ("MXAPJ") which rose
20.3% in sterling terms, whilst the FTSE Environmental
Opportunities Asia Pacific (ex-Japan) Index ("EOAX") and FTSE
Environmental Opportunities Japan Index ("EOJP") rose 24.3% and
16.5% in sterling terms respectively. A graph on page 9 shows the
undiluted NAV and index movements during the Period.
The Ordinary Share price rose 14.2% from 112.8p to 128.8p over
the Period. The IAEM Ordinary Share price has generally traded
close to NAV, with a premium/discount range of 4.1%/-4.6% (average
-0.03%). The Company's Subscription Shares traded at 34.5p at the
end of the Period.
C Share issue
During the Period, the Company raised GBP131 million through a C
Share issue. This was an excellent result and the Board would like
to thank existing and new shareholders for their support. The C
Shares commenced trading on the London Stock Exchange on 27 October
2010 and the net proceeds of the C Share issue were invested and
managed as a separate pool of assets until 80% of the net proceeds
were invested. The funds were invested broadly in line with the
Ordinary Share portfolio. The C Shares subsequently converted into
new Ordinary Shares on 10 December 2010 with a conversion ratio of
0.7631 new Ordinary Shares for each C Share held. In addition,
holders of the new Ordinary Shares arising on conversion received a
bonus issue of 1 Subscription Share for every 5.5 new Ordinary
Shares held.
Development of drivers in Asia and comment on market
activity
Concerns over rising populations, scarce natural resources, lack
of infrastructure and deteriorating environmental quality continue
to escalate. In response to these challenges, the policy backdrop
has gained further momentum, particularly in China where the 12(th)
Five Year Plan has established four strategic sectors with an
environmental focus - renewable energy, electric vehicles,
industrial energy efficiency and light emitting diodes ("LEDs").
This five year plan includes a US$450bn budget for environmental
protection, focused on water supply and treatment. Meanwhile, India
has started a nine state renewable energy certificate trading
program and has announced a Green Investment Bank to support solar
development. With these and other developments the Directors are
confident that Asian environmental markets will continue to expand
rapidly in the future.
Appointment of new Board member
I am pleased to report that the Board has appointed Richard
Franklin as a Director of the Company. Richard is founder &
executive chairman of Energy & Carbon GmbH (an environmental
advisory and development company, specialising in alternative
energy & greenhouse gas emission reduction enterprises) and
chairman of ECI Bioenergy Services. He also has substantial
experience of working and investing in the Asia Pacific Region. We
believe that his depth of experience will bring significant
benefits to the Company.
Gearing
The Board and the Manager believe that conditions may be
favourable for the Company to take on a level of long-term bank
debt and we are currently exploring the various options available
in this regard.
Update and outlook
Since the end of the Period, equity markets have seen mixed
newsflow as growing confidence in the sustainability of the
economic recovery in the US and reduced concerns about European
sovereign debt issues have coincided with a pickup in inflationary
pressures in Asia alongside expectations of further interest rate
increases by China and India. As at 14 February 2011, in sterling
terms, the MXAPJ and the EOAX had declined 4.9% and 5.7%
respectively since 31 December 2010 whilst the EOJP had risen by
0.4%. The undiluted NAV (excluding income) of IAEM had fallen 7.2%
to 124.5p while the Ordinary Share price had fallen 5.0% to 122.3p.
Notwithstanding these recent short-term negative movements, with
positive earnings momentum and portfolio valuation at an attractive
level, the Directors continue to believe that IAEM shares offer an
attractive long-term proposition for investors seeking to benefit
from the growth potential of Asian environmental markets.
Allan McKenzie
Chairman
17 February 2011
MANAGER'S REPORT
Investment Performance
The Company's performance for the six months ended 31 December
2010 (the "Period") has been robust with contributions coming from
a broad range of countries (particularly China and Taiwan) and
sectors (particularly energy efficiency and solar). The performance
was broadly in line with the MSCI Asia Pacific (ex- Japan) Index.
However, the Company's performance was not as strong as the FTSE
Environmental Opportunities Asia (ex-Japan) Index due to the strong
performance of a number of large index constituents not owned by
the Company.
Investment Universe & Portfolio Structure
Impax continues to focus on the bottom-up stock picking of
companies with attractive operations and valuations. We also take
into account developments in the environmental market sub-sectors
and the wider macro-environment. The universe of Asian
environmental companies has continued to grow (ca. 480 companies)
following a number of initial public offerings as well as
established companies expanding their environmental businesses.
The Company ended the period with investments in 53 companies,
which is within the expected range of 40-75 and one fewer than at
the end of June 2010. The portfolio is diversified by both
geography and sub-sector, with a particular focus in China at
present followed by Japan, India and South Korea. On a sector basis
the portfolio has its largest allocation to Energy Efficiency and
smallest allocations to Diversified Environmental and Renewable
& Alternative Energy. An analysis of the structure of the
portfolio is shown on page 8.
Environmental Sub-sectors
There were significant developments in each of the principal
environmental subsectors during the period and these are
highlighted below:
Renewable & Alternative Energy ("RAE")
China continued to see strong growth in renewable energy
installation, predominantly in the wind sector which saw 16
gigawatts of installations in 2010. However the price of wind
turbines fell substantially due to over capacity in turbine
manufacturing and demand in the global wind market remaining
subdued. By contrast, Chinese solar manufacturers benefited from a
very strong market driven by exports to Europe with high levels of
activity in Germany and Italy ahead of reductions in feed in
tariffs (FiTs). Positive contributions came from solar companies
ReneSola (solar, China), Trina Solar (solar, China) and OCI
(polysilicon, South Korea). In addition, Aboitiz Power (hydro and
geothermal power producer, Philippines) performed strongly as it
continues to benefit from the need to development power
infrastructure in the Philippines. The Company's RAE weighting fell
from 17% to 10% in the Period, as the Company's solar exposure was
reduced following a Period of strong performance. Important
additions included Goldwind (wind turbines, China), while we exited
both Trina Solar (solar, China) and ReneSola (solar, China).
Energy Efficiency ("EE")
EE was supported by the increasing focus on industrial and
transport energy efficiency by governments and corporates. In
particular, China announced details of the 12th Five Year Plan
which included the creation of four strategic environmental
industries, one of which is industrial energy efficiency. In
addition, rising labour costs in China are driving increased
factory automation. Energy efficient products have also been in
demand following growth in the power infrastructure, electronic
goods (including LED TVs and lighting) and transport sectors, with
roll-out of Chinese rail infrastructure in particular. Positive
contributions came from Zhuzhou CSR (efficient rail engines, China)
and Delta Thai (power electronics, Thailand). The Company's EE
weighting grew from 34% to 41% in the Period as the investment
opportunities expanded with the listing of China ITS (transport
energy efficiency, China) and Boer Power (high efficiency power
distribution, China) and increased exposure to the LED theme with
the purchase of Seoul Semiconductor (LED packager, Korea). The
Company exited Zhuzhou CSR after strong performance.
Water Infrastructure & Technologies ("WIT") and Pollution
Control ("PC")
Water continues to be a key investment priority across many of
the large Asian economies, driven by water scarcity and polluted
water sources. Water treatment facilities continued to grow rapidly
in China through the acceleration of build, own, transfer ("BOT")
projects. There was also growth in India, though towards the end of
the period there was increasing uncertainty about the outlook.
Growth in the Chinese gas sector (as it replaces coal in the urban
environment) continues to be strong and increases in wholesale gas
prices appear to have been effectively passed through to customers,
particularly commercial clients. In this sector, there were
positive contributions from Campbell Brothers (environmental
testing, Australia), Thai Tap (water utility, Thailand) and ENN
Energy (urban gas supply, China). The Company's WIT and PC
weighting was 29% at the start and the end of the Period. Important
additions included VA Tech Wabag (water treatment equipment, India)
while we exited Sinomem (water treatment equipment, Singapore).
Waste Management & Technologies ("WMT")
Continued recovery in commodity prices was the main driver for
the waste sector, improving pricing for both metals and paper
recyclers. Underlying economic recovery also drove improvements for
diversified waste management companies as volumes recovered. The
main contributors to performance in this sub-sector came from the
recyclers Sims (metal recycling, Australia) and Fook Woo (paper
recycling, China) as well as Transpacific Industries (diversified
waste, Australia). The Company's WMT weighting grew from 12% to 13%
in the Period. Key trades included adding to existing positions in
recyclers and exiting OCI Materials (industrial gases, South
Korea).
Diversified Environmental ("DE")
DE companies, which are reported separately, performed well over
the period particularly Formosa Plastics (Taiwan) which reported
strong earnings and a growing order book. Of the IAEM holdings,
Xinyi Glass (China) contributed positively following the
announcement of capacity expansion in high growth markets. The
Company's DE weighting fell from 8% to 7% in the Period.
Macro & Regional Discussion
During the Period the macro-economic news was broadly positive
with continued recovery in the global economy and positive data
from the United States. Sovereign credit issues continued to be a
concern in Europe, particularly for Spain, Portugal and Ireland.
China continued to show strong growth but rising inflation means
that the Chinese government is likely to maintain a relatively
tight monetary policy. Meanwhile, environmental policies will
continue to be a major theme in the 12(th) Five Year Plan. South
East Asian countries saw strong growth in their domestic economies
whilst Australia saw growth on the back of strong commodity
demand.
Outlook
We remain positive on key investment themes within the
portfolio, namely the expansion of domestic power, water and waste
infrastructure projects, opportunities for Asian low cost
manufacturers in key environmental sectors and the transition of
companies from traditional industries into higher growth
environmental sectors. The momentum of environmental policy and
legislation in the Asia Pacific region remains strong with energy
efficiency in particular becoming an increasing focus of the
Chinese Government. Despite inflation concerns we are confident in
the earnings growth expectations for the portfolio and believe that
the valuations are at attractive levels.
We will continue to post monthly updates on the Company's
performance and sector news on www.impax.co.uk.
Impax Asset Management Limited
17 February 2011
FIVE LARGEST INVESTMENTS
As at 31 December 2010
Xinyi Glass (energy efficiency, China) (3.9% of portfolio) Xinyi
Glass is an integrated glass manufacturer specializing in the
production of energy efficient glass for application in the
automotive, high end construction and solar energy markets. The
company also has plans to expand into electronic grade glass. The
company is gaining market share through geographic expansion and
industry consolidation.
ENN Energy (city gas distribution, China) (3.6%) ENN is the
largest privately run city gas distributor in China. The company
has long term exclusive concessions in 88 cities covering an urban
population of 46m people. The company also operates vehicle gas
refuelling stations and a project in Vietnam. ENN is a beneficiary
of the Chinese government's target to increase natural gas share of
primary energy from 4% to 8% by 2015 in order to reduce
pollution.
Epistar (LED, Taiwan) (3.4%) - Epistar is one of the largest
light emitting diode ("LED") chip manufacturers globally. LEDs are
used in the backlighting of many consumer electronic products and
are much more energy efficient than the traditional light sources.
Volume growth was originally driven by the adoption of LEDs first
in mobile phones, then notebooks and in 2010 the LED television
market expanded rapidly. Epistar is well placed to benefit from LED
general lighting which is set to be the next big growth
opportunity.
Lee and Man Paper (value added waste, China) (3.4%) - Lee and
Man Paper is the second largest containerboard producer in China,
with growth driven by rising consumption and packaging demand. The
company exclusively uses recycled paper for its products. The
company is also a prime beneficiary of tightening environmental
regulations and high capital investments, which create significant
entry barriers and also potential for industry consolidation.
Delta Electronics (power supplies, Taiwan) (3.4%) - Delta
Electronics is the world's largest manufacturer of high efficiency
power supplies for a wide range of electronic devices, ranging from
computers to large data centres. Delta Electronics' power supplies
lead the market in energy efficiency and consequently the company
is seeing strong growth.
STRUCTURE OF PORTFOLIO
As at 31 December 2010
BREAKDOWN BY COUNTRY OF DOMICILE AND QUOTATION
Domicile Quotation(1)
China and Hong Kong(2) 40% 36%
Japan 16% 16%
Taiwan 9% 9%
India 9% 9%
South Korea 7% 7%
Australia 6% 4%
Thailand 5% 5%
Philippines 4% 4%
Singapore 4% 5%
United States - 4%
United Kingdom - 1%
Total 100% 100%
(1) Where a participatory note is held, the exposure is reported
for the underlying security. American depositary receipts are
included under United States.
(2) Companies quoted in Hong Kong represented 35% (by market
value) of the Company's portfolio.
BREAKDOWN BY SECTOR
Energy Efficiency 41%
Renewable & Alternative Energy 10%
Water Infrastructure & Technologies 17%
Pollution Control 12%
Waste Management & Technologies 13%
Diversified Environmental 7%
Total 100%
BREAKDOWN BY MARKET CAPITALISATION
>GBP2bn 67%
GBP200m - GBP2bn 33%
Total 100%
The above breakdowns exclude the 1% net cash position at 31
December 2010.
UNDLIUTED NET ASSET VALUE PERFORMANCE
A graph appears here in the Half-yearly Financial Report.
Note on choice of indices: The Company does not have a formal
benchmark. However, the MSCI AC Asia Pacific (ex-Japan) and the
FTSE Environmental Opportunities Asia Pacific (ex-Japan) Indices
are both considered relevant for comparison of performance. In
addition, given the exposure to Japan which the Company expects to
maintain, the FTSE Environmental Opportunities Japan Index has also
been included.
INTERIM MANAGEMENT REPORT
The Chairman's review on pages 2 to 3 and the Manager's report
on pages 4 to 6 provide details on the performance of the Company.
Those reports also include an indication of the important events
that have occurred during the first six months of the financial
year ending 30 June 2011 and the impact of those events on the
condensed set of financial statements included in this Half-yearly
financial report.
Details of the largest five investments held at the period end
are provided on page 7 and the structure of the portfolio at the
period end is analysed on page 8.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board considers that the main risks and uncertainties faced
by the Company fall into the categories of (i) Asia Pacific region
risks (ii) Market risks and (iii) Corporate governance and internal
control risks. A detailed explanation of these risks and
uncertainties can be found in the Company's most recent Annual
Report for the period from 11 September 2009 to 30 June 2010. The
risks and uncertainties facing the Company remain unchanged from
those disclosed in the Annual Report.
RELATED PARTY TRANSACTIONS
Details of the investment management arrangements were provided
in the Annual Report. There have been no changes to the related
party transactions described in the Annual Report that could have a
material effect on the financial position or performance of the
Company. Amounts payable to the investment manager in the period
are detailed in the Income Statement on page 12.
Board of Directors
17 February 2011
DIRECTORS' STATEMENT OF RESPONSIBILITY
FOR THE HALF-YEARLY REPORT
The Directors confirm to the best of their knowledge that:
-- The condensed set of financial statements contained within
the half yearly financial report has been prepared under the
guidance issued by the Accounting Standards Board on "Half-yearly
financial reports".
-- The interim management report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FSA's Disclosure
and Transparency Rules.
Allan McKenzie
Chairman of the Board of Directors
17 February 2011
INCOME STATEMENT
For the six months ended 31 December 2010
Period from 11
September 2009 Period from 11
Six months ended to 31 December September 2009
31 December 2010 2009 to 30 June 2010
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains on
investments - 34,246 34,246 - 10,627 10,627 - 13,572 13,572
Income 3 1,058 - 1,058 124 - 124 1,234 - 1,234
Investment
management
fees (189) (757) (946) (42) (170) (212) (171) (682) (853)
Other
expenses (281) - (281) (134) - (134) (377) - (377)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return on
ordinary
activities
before
taxation 588 33,489 34,077 (52) 10,457 10,405 686 12,890 13,576
Taxation 4 (77) - (77) (8) - (8) (105) - (105)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return on
ordinary
activities
after
taxation 511 33,489 34,000 (60) 10,457 10,397 581 12,890 13,471
-------- -------- -------- -------- -------- -------- -------- -------- --------
Return per
Ordinary
Share 5
- undiluted 0.34p 22.21p 22.55p (0.05p) 9.86p 9.81p 0.52p 11.53p 12.05p
- diluted 0.33p 21.54p 22.87p (0.05p) 9.83p 9.78p 0.51p 11.40p 11.91p
The total column of the Income Statement is the profit and loss
account of the Company.
All capital and revenue items in the above statement derive from
continuing operations. No operations were acquired or discontinued
during the period.
A Statement of Total Recognised Gains and Losses is not
required, as all gains and losses of the Company have been
reflected in the above statement.
The Company was incorporated on 11 September 2009 and operations
commenced when its shares were listed on the London Stock Exchange
on 23 October 2009.
BALANCE SHEET
As at 31 December 2010
At 31 At 30
At 31 December December June
2010 2009 2010
Note GBP'000 GBP'000 GBP'000
Fixed assets
Investments at fair value
through profit and loss 2 286,063 108,626 125,017
--------------- ---------- --------
Current assets
Income receivable 89 37 169
Sales - future settlements - - 587
Other debtors 14 13 9
Cash at bank and in hand 3,989 10,297 5,389
--------------- ---------- --------
4,092 10,347 6,154
--------------- ---------- --------
Creditors: amounts falling
due within one year
Purchases - future settlements 948 224 4,009
Accrued liabilities 310 183 185
--------------- ---------- --------
1,258 407 4,194
--------------- ---------- --------
Net current assets 2,834 9,940 1,960
Total net assets 288,897 118,566 126,977
--------------- ---------- --------
Capital and reserves
Share capital 2,188 1,121 1,170
Share premium 9,986 4,698 9,986
Capital redemption reserve 129,982 - -
Share purchase reserve 102,350 102,350 102,350
Capital reserve 43,759 10,457 12,890
Revenue reserve 632 (60) 581
--------------- ---------- --------
Shareholders' funds 288,897 118,566 126,977
--------------- ---------- --------
Net asset value per share
Net asset value per Ordinary 6 134.42p 107.79p 110.46p
Share - undiluted
Net asset value per 6 129.13p 106.54p 108.85p
Ordinary Share -
diluted -
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
For the six months ended 31 December 2010
Share Capital Share
Share premium redemption purchase Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------- -------- ----------- --------- -------- -------- --------
Opening
shareholders'
funds 1,170 9,986 - 102,350 12,890 581 126,977
C Share issue 131,000 - - - - - 131,000
Share issue
expenses - - - - (2,620) - (2,620)
Conversion of
C Shares into
Ordinary
Shares and
bonus issue
of
Subscription
Shares (129,982) - 129,982 - - - -
Dividends paid - - - - - (460) (460)
Profit for the
period - - - - 33,489 511 34,000
---------- -------- ----------- --------- -------- -------- --------
Closing
shareholders'
funds
as at 31
December
2010 2,188 9,986 129,982 102,350 43,759 632 288,897
---------- -------- ----------- --------- -------- -------- --------
For the period from 11 September 2009 to 31 December 2009
Share Share
Share premium purchase Capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ---------- --------- -------- -------- --------
Opening
shareholders'
funds - - - - - -
Ordinary
Shares issued
during
the period 1,100 109,217 - - - 110,317
Subscription
Shares issued
during the
period 21 (21) - - - -
Share issue
expenses - (2,148) - - - (2,148)
Cancellation
of share
premium - (102,350) 102,350 - - -
Profit for the
period - - - 10,457 (60) 10,397
-------- ---------- --------- -------- -------- --------
Closing
shareholders'
funds
as at 31
December
2009 1,121 4,698 102,350 10,457 (60) 118,566
-------- ---------- --------- -------- -------- --------
For the period from 11 September 2009 to 30 June 2010
Share Share
Share premium purchase Capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- ---------- --------- -------- -------- --------
Opening
shareholders'
funds - - - - - -
Subscription
Shares issued
during the
period 1,149 114,559 - - - 115,708
Subscription
Shares issued
during the
period 21 (21) - - - -
Share issue
expenses - (2,202) - - - (2,202)
Cancellation
of share
premium - (102,350) 102,350 - - -
Profit for the
period - - - 12,890 581 13,471
-------- ---------- --------- -------- -------- --------
Closing
shareholders'
funds
as at 30 June
2010 1,170 9,986 102,350 12,890 581 126,977
-------- ---------- --------- -------- -------- --------
CASH FLOW STATEMENT
For the six months ended 31 December 2010
Period from
Six months 11 September Period from
ended 31 2009 to 31 11 September
December December 2009 to 30
2010 2009 June 2010
GBP'000 GBP'000 GBP'000
Operating activities
Cash inflow from investment
income and bank interest 1,138 88 1,065
Cash outflow from management
expenses (1,115) (176) (1,054)
Cash inflow from disposal of
investments* 153,073 33,350 70,901
Cash outflow from purchase of
investments* (281,841) (131,079) (178,719)
Cash outflow from net foreign
exchange costs (498) (47) (205)
Cash outflow from taxation (77) (8) (105)
----------- -------------- --------------
Net cash flow from operating
activities (129,320) (97,872) (108,117)
----------- -------------- --------------
Equity dividends paid (460) - -
Financing
Proceeds of share issues 131,000 110,317 115,708
Expenses of share issues (2,620) (2,148) (2,202)
----------- -------------- --------------
Net cash flow from financing 128,380 108,169 113,506
----------- -------------- --------------
Increase / (decrease) in cash (1,400) 10,297 5,389
Opening balance at start of
period 5,389 - -
----------- -------------- --------------
Closing balance at end of period 3,989 10,297 5,389
----------- -------------- --------------
* In the six months ended 31 December 2010 the figures include
GBP99.0m of UK Treasury Bills (in comparative periods GBP30.0m)
purchased and subsequently sold, or redeemed, during the
period.
NOTES TO THE ACCOUNTS
1 Accounting policies
The Half-yearly financial report has been prepared in accordance
with applicable UK accounting standards and UK GAAP. The accounting
policies used by the Company are the same as those stated in its
most recent Annual Report. The accounting policy in relation to
investments is stated in note 2 below.
The Company manages its affairs to enable it to qualify as an
investment trust for taxation purposes under section 1158 of the
Corporation Tax Act 2010. The Company therefore presents its
accounts in accordance with the Statement of Recommended Practice
for Investment Companies.
2 Investments
Investments have been classified as "fair value through profit
or loss" and are initially recognised on the trade date and
measured at fair value. Investments are measured at subsequent
reporting dates at fair value by reference to the following
criteria:-
-- Any securities of companies quoted on an investment exchange
are valued at fair value by reference to market bid price.
-- Any investments in derivatives are valued at fair value. In
the case of Participatory Notes this is by reference to latest
broker quotations or, if unavailable or lower, by reference to the
equivalent market bid price valuation of the relevant underlying
security.
-- Any other investment is valued at best estimate of fair value
as determined by the Directors.
Changes in fair value are included in the Income Statement as a
capital item.
Transaction costs incurred on the acquisition and disposal of
investments are charged to the Income Statement as a capital
item.
3 Income
Period from Period from
Six months 11 Sep 2009 11 Sep 2009
to 31 Dec to 31 Dec to 30 June
2010 2009 2010
GBP'000 GBP'000 GBP'000
----------- ------------ ------------
Income from investments:
Dividends from overseas investments 1,037 112 1,222
Treasury bill income receivable 17 6 6
Total 1,054 118 1,228
----------- ------------ ------------
Other income:
Interest receivable 4 6 6
Total income 1,058 124 1,234
----------- ------------ ------------
4 Taxation
The tax charge in the Income Statement is in respect of overseas
tax suffered on dividend income.
5 Return per share
Undiluted return per Ordinary Share is based on the net return
attributable on ordinary activities after taxation attributable to
the weighted average of 150,806,405 Ordinary Shares in issue during
the period (Period to 31 December 2009: 106,021,429; Period to 30
June 2010: 111,762,869).
Diluted return per Ordinary Share is based on the net return
attributable on ordinary activities after taxation attributable to
the diluted weighted average of 155,438,175 (Period to 31 December
2009: 106,355,623; Period to 30 June 2010: 113,130,158) Ordinary
Shares during the period. Each Subscription Share carries the right
to subscribe for one Ordinary Share at a price of 100p. The average
bid price per Ordinary Share during the period was greater than
100p and consequently the Subscription Shares have a dilutive
impact on return per share. In calculating the diluted weighted
average number of Ordinary Shares, 4,631,770 Ordinary Shares were
treated as being in issue for nil consideration throughout the
period; this being the difference between the number of Ordinary
Shares assumed to be issued on subscription of all the Subscription
Shares and the number of Ordinary Shares assumed to be bought back
at the average bid price from the assumed subscription
proceeds.
6 Net assets per share
The undiluted net assets per Ordinary Share figure is based on
the net assets of GBP288,897,000 at 31 December 2010 (31 December
2009: GBP118,566,000; 30 June 2010: GBP126,977,000) divided by
214,915,100 Ordinary Shares in issue at 31 December 2010 (31
December 2009: 110,000,000; 30 June 2010: 114,949,000).
The diluted net assets per Ordinary Share figure is based on net
assets of GBP327,973,000 (31 December 2009: GBP139,466,000; 30 June
2010: GBP147,877,000) divided by 253,990,591 diluted Ordinary
Shares at 31 December 2010 (31 December 2009: 130,900,000; 30 June
2010: 135,849,000). The diluted figures assume that the 39,075,491
Subscription Shares in issue on 31 December 2010 (31 December 2009:
20,900,000; 30 June 2010: 20,900,000) were converted into Ordinary
Shares on that date a price of 100p per Ordinary Share.
7 Share issues
Pursuant to the prospectus dated 1 October 2010 (the
"Prospectus"), the Company issued 131,000,000 C shares of GBP1 each
through a placing, open offer and offer for subscription. The C
Shares were issued on 27 October 2010 and commenced trading on the
London Stock Exchange on that date.
On 10 December 2010, the C shares were converted into 99,966,100
new Ordinary Shares of 1p each using the conversion methodology
detailed in the Prospectus. The conversion ratio of 0.7631 new
Ordinary Shares of 1p each for each C share was calculated by
reference to the total net assets of the Company and the net assets
of the Company attributable to C Shareholders as at close of
business on 30 November 2010. Immediately upon conversion, the
holders of new Ordinary Shares received 1 Subscription Share for
every 5.5 new Ordinary Shares held, which resulted in 18,175,491
new Subscription Shares being issued. The new Ordinary Shares and
new Subscription Shares carry the same rights and rank pari passu
in all respects with the Ordinary Shares and Subscription Shares in
issue prior to the conversion.
The number of Ordinary Shares in issue at 31 December 2010 was
214,915,100.
The number of Subscription Shares in issue at 31 December 2010
was 39,075,491.
8 Related party transactions
Fees payable to Impax Asset Management Limited (the "Manager")
are shown in the Income Statement. At 31 December 2010 the fee
accrual outstanding to the Manager was GBP240,959 (31 December
2009: GBP98,897, 30 June 2010: GBP105,912). These fees were
subsequently paid following the period end.
9 Status of this report
These financial statements are not the Company's statutory
accounts for the purposes of section 434 of the Companies Act 2006.
They are unaudited. The Half-yearly financial report will be sent
to shareholders and copies will be made available to the public at
the registered office of the Company. The report will be available
in electronic format on the Manager's website
(www.impax.co.uk).
The Half-yearly financial report was approved by the Board on 17
February 2011.
The Company's statutory accounts for the period from 11
September 2009 to 30 June 2010 received an unqualified audit report
and have been filed with the registrar of companies at Companies
House.
DIRECTORS, MANAGER AND ADVISERS
DIRECTORS INVESTMENT MANAGER
Allan McKenzie (Chairman) Impax Asset Management Limited
Simon Atiyah Mezzanine Floor
Alan Barber Pegasus House
Richard Franklin (appointed 3 February 37-43 Sackville Street
2011)
Terence Mahony London W1S 3EH
BROKER INVESTMENT ADVISER
Collins Stewart Europe Limited Ajia Partners Asset Management
(HK) Limited
88 Wood Street 78(th) Floor, The Center
London EC2V 7QR 99 Queen's Road
Central Hong Kong
SOLICITOR SECRETARY AND ADMINISTRATOR
CMS Cameron McKenna LLP Cavendish Administration Limited
Mitre House 145-157 St. John Street
160 Aldersgate Street London EC1V 4RU
London EC1A 4DD
REGISTRAR
CUSTODIAN Capita Registrars
BNP Paribas Securities Services The Registry
BNP Paribas London Branch 34 Beckenham Road
10 Harewood Avenue Beckenham
London NW1 6AA Kent BR3 4TU
REGISTERED OFFICE* AUDITOR
145-157 St. John Street Ernst & Young LLP
London EC1V 4RU 1 More London Place
London SE1 2AF
* Registered in England and Wales
No. 7016550
17 February 2011
Enquiries:
Anthony Lee 020 7490 4355
Company Secretary
Cavendish Administration Limited
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FMGMZMNLGMZM
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