13th Mar 2007 16:03
THE ZERO PREFERENCE GROWTH TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
The Directors announce the unaudited statement of results for the six months from
1 August 2006 to 31 January 2007 as follows:
CONSOLIDATED INCOME STATEMENT (UNAUDITED)FOR THE SIX MONTHS ENDED 31 JANUARY 2007 2007 2006 Revenue Capital Total Revenue Capital Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Gains on investments Gains on investments - 888 888 - 1,109 1,109 at fair value Net investment result - 888 888 - 1,109 1,109 Dividends and i 27 - 27 26 - 26 nterest Expenses Investment management (19) - (19) (18) (11) (29)fee Terminal payment (76) (76) - - - provision - Other expenses (97) - (97) (101) - (101) (116) (76) (192) (119) (11) (130) (Loss)/profit before (89) 812 723 (93) 1,098 1,005 finance costs and taxation Finance Costs Bank interest payable (164) - (164) (138) - (138) (Loss)/profit before (253) 812 559 (231) 1,098 867 and after taxation for the period but before finance (costs ) and losses allocated in respect of shareholders Finance (costs)/ losses in respect of : Zero Dividend - (515) (515) - (459) (459)Preference shares Growth shares 253 (297) (44) 231 (639) (408) - - - - - - Return per share (IAS 33 and Articles pence pence pence pence pence penceof Association basis) : Zero Dividend - 3.63 3.63 - 3.23 3.23 Preference share Growth share (0.84) 0.98 0.14 (0.77) 2.13 1.36 Ordinary unit (0.84) 4.61 3.77 (0.77) 5.36 4.59
The total column of this statement represents the Group's income statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies.
All items in the above statement derive from continuing operations.
CONSOLIDATED BALANCE SHEETAS AT 31 JANUARY 2007 31 January 31 July 31 January 2007 2006 2006 (unaudited) (audited) (unaudited) ‚£'000 ‚£'000 ‚£'000 Non current assets Investments at fair value 14,547 15,948 14,817 Current assets Trade and other receivables 33 25 21 Cash and cash equivalents 52 92 321 85 117 342 Total assets 14,632 16,065 15,159 Current liabilities Trade and other payables (143) (88) (63)
Total assets less current liabilities 14,489 15,977 15,096
Non current liabilities Bank loans (3,260) (5,307) (4,704)
Assets attributable to shareholders 11,229 10,670 10,392
Liabilities due to shareholders Zero Dividend Preference share (8,902) (8,387) (7,910)entitlement Growth share entitlement (2,327) (2,283) (2,482) (11,229) (10,670) (10,392) - - - pence pence pence Net asset value per share : Zero Dividend Preference share 62.65 59.02 55.66 Growth share 7.75 7.61 8.27 Ordinary unit 70.40 66.63 63.93 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) FOR THE SIX MONTHS ENDED 31 JANUARY 2007 2007 2006 ‚£'000 ‚£'000 Cash flows from operating activities Investment interest received 20 18 Bank deposit interest received 7 9 Investment Manager's fees paid (43) (38) Secretarial fees paid (21) (28) Other cash payments (80) (91) Cash expended from operations (117) (130) Bank interest paid (162) (137) Net cash outflow from operating activities (279) (267) Cash flows from investing activities Purchases of investments (2,901) (4,967) Sales of investments 5,190 3,916
Net cash inflow/(outflow) from investing activities 2,289 (1,051)
Cash flows from financing activities Advances of bank loan 750 2,200 Repayments of bank loan (2,800) (800)
Net cash (outflow)/inflow from financing activities (2,050) 1,400
(Decrease)/increase in cash and cash equivalents for (40) 82 the period
Cash and cash equivalents at the start of the period 92 239
Cash and cash equivalents at the end of the period 52 321 NOTES1) GENERAL
This financial information does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. The statutory financial statements for the year ended 31 July 2006, which contained an unqualified auditors' report, have been lodged with the Registrar of Companies and did not contain a statement required under Section 237(2) or (3) of the Companies act 1985. These statutory financial statements were prepared under International Financial Reporting Standards ('IFRS') and in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies, revised December 2005. The financial statements have been prepared using the accounting policies adopted in the audited financial statements for the year ended 31 July 2006.
The Group financial statements consolidate the financial statements of the Company, and its wholly owned subsidiary undertaking, ZPGT Trading Limited, for the six months ended 31 January 2007.
These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") for interim financial statements; IAS 34 Interim Financial Reporting. They do not include all the financial information required for full annual financial statements.
The financial statements are presented in Sterling rounded to the nearest thousand.
2) RETURN PER SHARE
IAS 33 and Articles of Association basis
Returns per share have been calculated based on the following returns attributable to each class of share;
31 January 2007 31 January 2006 Weighted average No. of shares Revenue Capital Total Revenue Capital Total 2007 2006 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 No. No. Zero - 515 515 - 459 459 14,209,498 14,209,498 Dividend Preference share Growth share (253) 297 44 (231) 639 408 30,000,000 30,000,000 (253) 812 559 (231) 1,098 867
There are no dilutive elements within the Group and hence no diluted return per share calculations are presented.
3) NET ASSET VALUE
The net asset value per Zero Dividend Preference share is calculated using assets attributable of ‚£8,902,000 (31 July 2006: ‚£8,387,000, 31 January 2006: ‚£ 7,910,000) and 14,209,498 Zero Dividend Preference shares in issue at the end of the period.
The net asset value per Growth share is calculated using assets attributable of ‚£2,327,000 (31 July 2006: ‚£2,283,000, 31 January 2006: ‚£2,482,000) and 30,000,000 Growth shares in issue at the end of the period.
The net asset values stated include current period revenue.
A reconciliation of movements in net assets attributable during the period isshown below: Zero Growth Total Dividend shares Preference shares Assets attributable ‚£'000 ‚£'000 ‚£'000 At 1 August 2006 8,387 2,283 10,670 Profit after taxation for the period but before - 559 559 finance (costs) and losses allocated in respect of shareholders Zero Dividend Preference share appropriation 515 (515) - At 31 January 2007 8,902 2,327 11,229
4) INVESTMENT MANAGEMENT WINDING-UP PERFORMANCE FEE
Under the terms of the investment management agreement, the Investment Manager is entitled to an annual fee at the rate of 0.25% per annum of the total assets less current liabilities (other than borrowing incurred for investment purposes) of the Group before deducting any prior charges and a performance fee, payable annually in arrears, at the rate of 0.15% of total assets less current liabilities if total assets have increased by more than 5.5% during the year. In the six months ended 31 January 2007, no performance fee is deemed to be due as the assets have not increased by more than 5.5% (31 January 2006: ‚£ 11,000). However, because the performance fee is based on performance to 31 July 2007, the actual fee payable (if any) can only be determined at that time.
In addition, the Investment Manager is entitled to a terminal payment calculated as 12% of the assets attributable for distribution to Growth shareholders, after repayment of the bank debt and full satisfaction of the final capital entitlement of the Zero Dividend Preference shares on 9 August 2008. At 31 January 2007, such assets available were ‚£638,000 and, therefore, a provision of ‚£76,000 (31January 2006: ‚£nil) has been included in the consolidated income statement. However, because the terminal payment is only payable in August 2008, the actual fee payable (if any) can only be determined at that time.
The Chairman commented:
I am delighted to report another period of strong returns. The Company's assets attributable to shareholders increased 5.24 per cent. net of all expenses which once more compares favourably with the FD/AIC SCI ZDP index, which rose 4.59 per cent. The net asset value ("NAV") of the Zero Dividend Preference shares increased from 59.02p to 62.65p and the NAV of the Ordinary units from 66.63p to 70.40p. The NAV of the Growth shares increased from 7.61p to 7.75p. It is worthwhile reiterating my comment made in the last Annual Report that any increase in the NAV of the Growth share represents a significant accomplishment achieving a return exceeding the substantial hurdle rate required to simply maintain the NAV, given the high accrual rate of the Zero Dividend Preference share. The mid-market share prices of the Zero Dividend Preference shares, Ordinary units and Growth shares rose by 5.56, 6.42 and 20.71 per cent. respectively.
The Company remained fully compliant with its banking covenants during the interim period. At the beginning of the period the Company enjoyed significant headroom over the banking covenants. This has been further enhanced by reductions in the outstanding debt drawn down, partially due to the increased cost of the bank facility and an increase in exposure to compliant holdings.
Since the period end, and as previously announced, the Company reduced its loan facility, without incurring any cost penalty, by ‚£2,000,000 to ‚£4,000,000, also thereby restricting the non-utilisation fee. Since 31 January 2007, the amount drawn down under the facility has been reduced to ‚£3,020,000.
Robert OttleyChairman12 March 2007
ZERO PREFERENCE GROWTH TRUST PLCRelated Shares:
ZPG PLC