TIDMEIN
Eaglet Investment Trust plc
Half-yearly report for the six months ended 31 December 2008
Investment policy
The investment policy of Eaglet Investment Trust plc (the "Company" or the
"Trust") is to achieve a capital return in excess of that of the Extended
Hoare Govett Smaller Companies Index (excluding Investment Companies) (the
"Extended HGSCI") by investing in a diversified portfolio selected from among
quoted companies with market capitalisations up to GBP150 million at the point
of investment.
It is the aim of the Investment Manager (the "Manager") to identify and invest
in a diversified portfolio of smaller companies whose shares appear
undervalued by the market and which have some or all of the following
characteristics:
- experienced and well-motivated management;
- products and services supplying growing markets;
- sound operational and financial controls; and
- cash generation to finance ongoing development allied with a progressive
dividend policy.
The Manager believes that the development of a sound knowledge and
understanding of investee companies is of paramount importance, given the
sparseness and infrequency of stockbrokers' research provided on companies
within the sector and this includes, where appropriate, company visits.
The Manager has not employed gearing during the period under review.
In accordance with the Listing Rules, the Company has a policy to invest no
more than 15% of its gross assets in other investment companies.
Performance statistics: Net Asset Value (capital growth)
Six months to Twelve months Three years to Five years to
31 December to 31 December 31 December 31 December
2008 2008 2008 2008
% % % %
Basic NAV -17.3 -25.6 -18.8 -25.0
Extended HGSCI* (excl.
Investment Companies)
-32.4 -43.0 -36.2 -7.0
Outperformance/underperformance +15.1 +17.4 +17.4 -18.0
* The Company's benchmark
Chairman's statement
During the period under review the investment objective of Eaglet
Investment Trust PLC ("the Company") has been to achieve a capital return in
excess of the Extended Hoare Govett Smaller Companies Index (excluding
Investment Companies) (the "Extended HGSCI Index" or "the Index") by investing
in a diversified portfolio of quoted companies with a market capitalisation of
up to GBP150 million at the point of investment. Over the last six months, your
Company's net asset value per share ("NAV") fell by 17.3% compared with a fall
in the benchmark Index of 32.4%. This means that Eaglet's NAV has outperformed
its benchmark Index by 15.1% over the six months ended 31 December 2008. This
outperformance is due to the realisation of a number of the Company's holdings
and the holding of cash balances which has offset the fall in the value of the
portfolio.
Over the twelve months since the new Board's appointment, Eaglet's
NAV has outperformed that of its Association of Investment Companies ("AIC")
peer group index by 16.3%. In addition, the Company was ranked second out of
seventeen trusts within its AIC peer group measured over one year (Source:
AIC).
In November 2008 your Board placed a number of proposals before
shareholders. In summary, these involved:
- a tender offer under which shareholders on the register on 3
March 2008 would have been able to sell up to 49% of their shares to the
Company for cancellation at a price close to net asset value;
- a change in the Company's investment policy, so that the
Company would have invested in UK listed shares which are identified as having
patterns of directors' dealing which suggest that following such signals would
lead to superior investment performance; and
- a the sale of a proportion of the remaining portfolio companies to
Laxey Partners for cash at a price close to net asset value and an off-market
purchase of 1,041,424 of the Company's shares held by Laxey Partners.
These and other proposals, in the form of 12 resolutions, were
voted on at an Extraordinary General Meeting ("EGM") of the Company on 20
November 2008. Certain resolutions did not achieve the required majority and
since the resolutions were inter-conditional, the Company was unable to
proceed with the tender offer and other proposals in their original form.
The Board has consulted with a wider range of shareholders since
the EGM and has formulated revised proposals which seek to balance the views
and interests which have been expressed. These revised proposals include:
i. a tender offer for up to 58% of the outstanding shares in issue
on a mix-and-match basis; and
ii. a change in the Company's investment policy so that the Company
will invest in UK listed shares which are identified as having patterns of
directors' dealing, which suggest that following such signals will lead to
superior investment performance.
Subsequent to the implementation of the tender offer, it is
anticipated that the remainder of the current portfolio will be realised over
the next eighteen months. Half of the proceeds of these realisations will be
held in cash or cash equivalents and half will be invested according to the
new investment policy. Over the next eighteen months, the Company intends to
carry out a series of tender offers in order to give those shareholders who do
not wish to participate in the new investment policy the opportunity to
realise their investments in full as the current portfolio is realised.
Subject to the revised proposals being approved by shareholders,
the Company's new investment policy will be to achieve attractive returns for
shareholders, primarily through capital appreciation, generally by investing
in companies listed on regulated investment exchanges in the United Kingdom.
The investment premise of The Directors' Dealing Investment Trust Plc (as the
Company is proposed to be re-named) is that directors of listed companies are
better informed than the market generally and therefore their investments in
the companies they manage are expected to outperform the market.
The Directors' Dealing Investment Trust Plc will invest in shares
of UK listed companies which are identified as having patterns of directors'
trading, which suggest that following such patterns could lead to attractive
investment returns. These patterns have been combined to form various trading
strategies which have historically outperformed the relevant FTSE index. The
Board and Knox D'Arcy Asset Management ("KAM"), the proposed Investment
Manager of the Company, believe that no other listed investment trust in the
United Kingdom offers investors the opportunity to gain exposure to such
trading strategies.
Jonathan Carr
Chairman
25 February 2009
Investment Manager's report
During the six month period under review, the Company's net asset value per
share ("NAV") fell by 17.3% compared with a fall in the benchmark Index of
32.4%, an outperformance of 15.1% over the last six months. The decrease in
NAV over the six month period under review was caused by a fall of 29.3% in
the value of the listed portfolio. Twenty of the thirty holdings in the
portfolio on 31 December 2008 fell by 30% or more during the six months under
review and fourteen holdings fell by 50% or more.
Over the twelve months to 31 December 2008, Eaglet's NAV has outperformed that
of its Association of Investment Companies ("AIC") peer group index by 16.3%.
In addition, the Company was ranked second out of seventeen in its peer group
measured over one year (Source: AIC). The outperformance during the six months
under review was the result of the realisation of a number of portfolio
holdings and the holding of cash balances. Most of the Company's cash balances
were invested in gilts during the period under review, which led to an
unrealised capital gain of GBP0.7m as at 31 December 2008.
Since the appointment of your new Board, investments to the value of GBP41m have
been realised at an aggregate premium to net asset value of 1.35%. This has
been achieved through the application of activist strategies, notwithstanding
the receipt of offers for a number of such holdings at discounts to net asset
value of 30% or more. To date, offers for portfolio holdings at a significant
discount have been rejected.
The market for the smaller/micro capitalisation companies that the Company has
invested in is still very illiquid. If anything, this sector of the market has
become more illiquid over the last six months. Even on the assumption that the
Company could carry out 50% of the 10 day average volume traded in the market,
some 59% of the current portfolio holdings would require in excess of 240
trading days to sell. The continuation of the credit crunch is unlikely to
improve this lack of liquidity.
Whilst the next twelve months are likely to be challenging for all investors,
we shall continue to seek opportunities to realise value for shareholders by
pursuing an activist approach to certain of the portfolio holdings where value
could be realised from such an approach. In the medium term we believe that,
subject to shareholder approval, the new investment policy offers a unique
opportunity to deliver value to shareholders.
The new investment policy, if approved by shareholders at the forthcoming
general meeting, is based on the premise that directors of listed companies
are better informed than the market generally and therefore their investments
in the companies they manage are expected to outperform the market.
The Directors' Dealing Investment Trust Plc (as the Company will be renamed if
the new investment policy is approved by shareholders) will invest in
companies listed on regulated exchanges in the United Kingdom which are
identified as having patterns of directors' trading which suggest that
following such patterns could lead to attractive investment returns.
Investors will often consider whether directors hold shares or have interests
in the companies which they manage and whether there has been any recent
buying or selling activity when making an investment decision. Such trading
activity is often highlighted in the financial press as being a possible
indicator of future share price performance.
The proposed new investment policy is based upon independent empirical
research into directors' trading in the UK market. The original research
analysed directors' trades in shares of UK listed companies from 1994 to 2002
and identified a number of directors' dealing strategies which outperformed
the market. Subsequent analysis of directors' trades from 2002 to 2008
confirmed the original research and both have been used to develop the trading
strategies to be employed by the Company should the new investment policy be
approved.
Approximately 203,000 directors' trades between January 1994 and December 2008
have been analysed and a number of key trading criteria have been developed
based on this analysis. These criteria have been combined to form various
simulated trading strategies which have historically outperformed the relevant
FTSE index.
Given the scalability of the directors' dealing strategy, we anticipate that
the directors' dealing portfolio will commence with a limited amount of
capital and will grow as we dispose of the current portfolio holdings. We
believe that the directors' dealing investment policy will generate attractive
returns for shareholders over the medium to long term.
Knox D'Arcy Investment Management Limited
25 February 2009
Portfolio review
Portfolio breakdown by market capitalisation as at 31 December 2008
Number of companies Total
GBP150m+ 1
GBP100-150m 1
GBP50-100m 2
GBP25-50m 3
GBP0-25m 23
UK Treasury Gilts 8
Percentage of portfolio %
GBP150m+ 8.1
GBP100-150m 3.1
GBP50-100m 7.6
GBP25-50m 5.2
GBP0-25m 17.3
UK Treasury Gilts 58.7
100.0
Number of companies 38
Number of declarable (3% and over) 21
holdings
Sector analysis of portfolio as at 31 December 2008
Sector weightings Market Value
%
UK Treasury Gilts 58.7
Support services 14.5
Pharmaceuticals & biotechnology 8.1
Health care equipment & services 6.0
General financial 2.7
Equity investment instruments 2.6
Food producers 1.9
Aerospace and defence 1.9
Real estate 1.3
Electronic & electrical equipment 1.0
Media 0.8
Software & computer services 0.5
Total 100.0
The portfolio consists entirely of UK quoted equity investments and UK
Treasury Gilts.
Twenty largest holdings
Classification and main activities
UK Treasury Gilts
Conventional UK Government gilts.
Abcam Pharmaceuticals and Biotechnology
Production and distribution of research-grade antibodies via an online catalogue
featuring detailed technical data sheets on each product.
Concateno Healthcare Equipment & Services
Development, manufacture and sale of medical diagnostic tests and services,
predominantly those used for the detection of alcohol and drug abuse.
Harvey Nash Group Support Services
A global multi-service recruitment organisation with 3,000 staff worldwide and 28
offices covering the USA, Europe and Asia-Pacific.
RWS Holdings Support Services
Provision of intellectual property support services (patent translations and technical
searches) to the medical, pharmaceutical, chemical, aerospace, defence, automotive and
telecoms industries.
Nationwide Accident Repair Services Support Services
Repair of motor vehicles and the provision of accident claim management services.
Cohort Aerospace and Defence
Provider of independent technical consultancy support and services, primarily although
not exclusively to the defence sector. Provider of niche secure communications hardware
and software, electronic warfare software and support services and management of secure
IT facilities and services, again primarily, although not exclusively to the defence
sector.
Clerkenwell Ventures General Financial
Acquisition, development and operation of leisure businesses.
Rapid Realisations Equity Investment Instruments
To exploit the investment opportunity represented by companies in pre-IPO and other late
stage situations with a view to arbitraging differences in public and private company
valuations.
Driver Group Construction and Materials
Provision of specialist commercial and dispute resolution services to the construction
industry.
OpSec Security Group Support Services
The group provides governments and corporations worldwide with industry leading
anti-counterfeiting technologies solutions and services. Its unprecedented expertise in
optical sciences, software, films, materials handling and supply chain management allow
it to tailor individual solutions for each of its customers, effectively addressing the
growing problem of counterfeiting.
Fountains Support Services
Environmental and forestry management service provider to local authorities, utility
companies and landowners.
Property Recycling Real Estate
The company identifies and acquires previously developed land, referred to as brownfield
sites, where it can see the opportunity to improve valuation significantly through
remediation and planning gain.
Zetar Food Producers
Manufacture of novelty and niche chocolate products, sold under private label, Kinnerton
or other chocolate manufacturer's brands within the UK, Australia and other export
markets; sourcing, preparation and supply of premium quality dried fruits and nuts,
fruit and other snacks, primarily within the UK.
Abacus Group Electronic and Electrical Equipment
Electronic component distributor with outlets across Europe.
Third Advance Value Realisation Equity Investment Instruments
To manage its investments to provide value and liquidity to its investors.
Glisten Food Producers
The group is involved in the manufacture and sale of confectionery, ingredients and
snacking products to a wide range of outlets in the UK and abroad.
Advance AIM Value Realisation Equity Investment Instruments
To realise value from a portfolio of AIM securities and progressively return cash to
shareholders.
Avesco Group Media
Provision of media services to the corporate presentation, entertainment and broadcast
markets.
PHSC Support Services
Provider of Health and Safety consulting services to UK clients.
Principal portfolio investments
as at 31 December 2008
Market % of Market
value portfolio capitalisation
GBP'000 GBPm
UK Gilts 33,185 58.7 -
Abcam 4,599 8.1 177
Concateno 3,400 6.0 99
Harvey Nash Group 2,776 4.9 21
RWS Holdings 1,757 3.1 105
Nationwide Accident Repair Services 1,335 2.4 37
Cohort 1,050 1.9 49
Clerkenwell Ventures 1,017 1.8 23
Rapid Realisations 900 1.6 54
Driver Group 737 1.3 17
OpSec Security Group 704 1.2 10
Fountains 586 1.0 8
Property Recycling 582 1.0 4
Zetar 558 1.0 18
Abacus Group 552 1.0 39
Third Advance Value Realisation 539 1.0 9
Glisten 523 0.9 15
Advance AIM Value Realisation 501 0.9 4
Avesco Group 275 0.5 5
PHSC 242 0.4 2
Total 55,818 98.7
The above holdings are in the ordinary shares of investee companies or in
Treasury Bills.
The 20 principal investments represent 98.7 % of the investment portfolio.
Interim management report and responsibility statement
Interim management report
The important events that have occurred during the period under review are set
out in the Chairman's statement and Manager's report. The key factors
influencing the financial statements are also set out in the Chairman's
statement and Manager's report.
The principal risks and uncertainties for the remaining six months of the
financial year are reviewed in the
Manager's report.
Under the Listing Rules the Manager is regarded as a related party of the
Company. The amount paid to Unicorn Asset Management during the period was
GBP469,357 (31 December 2007: GBP556,870; 30 June 2008: GBP751,299). The amount paid
to Knox D'Arcy during the period was GBPnil (31 December 2007: GBPnil; 30 June
2008: GBP250,000). Full details of the investment management fees payable during
the current period are set out in note 6.
Responsibility statement
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements has been prepared in accordance
with the Statement on Half-yearly Financial Reports issued by the UK
Accounting Standards Board;
- the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements;
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
This Half-yearly Report was approved by the Board of Directors on 25 February
2009 and the above Responsibility Statement was signed on its behalf by
Jonathan Carr, Chairman.
Income statement
(incorporating the profit and loss account*) of the Company for the six months
to 31 December 2008
Six months to Year ended Six months to
31 December 2008 30 June 2008 31 December 2007
(unaudited) (audited) (unaudited)
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Losses on
investments
at fair - (12,284) (12,284) - (36,231) (36,231) - (27,483) (27,483)
value
Income 885 - 885 1,593 - 1,593 686 - 686
Investment
management
fee 6 3 3 6 (695) (695) (1,390) (617) (616) (1,233)
Professional
fees 7 (699) - (699) - - - (684) - (684)
Other
expenses (156) - (156) (1,005) (209) (1,214) (169) - (169)
Net return
on
ordinary
activities
before
finance 33 (12,281) (12,248) (107) (37,135) (37,242) (784) (28,099) (28,883)
costs
and taxation
Interest
payable and
similar
charges - - - (223) (223) (446) (204) (204) (408)
Return on
ordinary
activities
before and
after
taxation 33 (12,281) (12,248) (330) (37,358) (37,688) (988) (28,303) (29,291)
for the
period
Return per
Ordinary
share 0.15 (55.51) (55.36) (1.46) (165.18) (166.64) (4.36) (124.84) (129.20)
(pence)
* The total column of this statement is the profit and loss account of the
Company. The supplementary revenue and capital columns are prepared under
guidance issued by the Association of Investment Companies ("AIC").
There are no other recognised gains or losses in the period and therefore no
Statement of Total Recognised Gains and Losses has been prepared.
All revenue and capital items in the above statement derive from continuing
operations.
These accounts are unaudited and are not the Company's statutory accounts.
Reconciliation of movements in shareholders' funds
for the six months to 31 December 2008
Share Own
capital shares Share Capital Capital Capital
held in premium redemption reserve reserve Revenue
Treasury account reserve realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months ended
31 December 2008
(unaudited)
30 June 2008 6,126 (8,847) 28,319 1,838 53,709 (13,946) 3,704 70,903
Net return after
taxation for the - - - - - - 33 33
period
Net losses on
realisation of - - - - (758) - - (758)
investments
Fair value
movement - - - - - (11,526) - (11,526)
in investments
Costs allocated
to - - - - 3 - - 3
capital
31 December 2008 6,126 (8,847) 28,319 1,838 52,954 (25,472) 3,737 58,655
Year ended 30
June
2008 (audited)
30 June 2007 6,286 (8,544) 28,319 1,678 86,727 (7,759) 4,192 110,899
Net return after
taxation for the - - - - - - (330) (330)
year
Dividend paid and
declared - - - - - - (158) (158)
Net losses on
realisation of
investments - - - - (33,737) - - (33,737)
Transfer between
reserves* - - - - 11,959 (11,959) - -
Fair value
movement - - - - (8,266) 5,772 - (2,494)
in investments
Costs allocated
to - - - - (1,127) - - (1,127)
capital
Cost of shares
held - (303) - - - - - (303)
in Treasury
Cost of shares
purchased for
cancellation - - - - (1,847) - - (1,847)
Nominal value of
shares purchased
for (160) - - 160 - - - -
cancellation
30 June 2008 6,126 (8,847) 28,319 1,838 53,709 (13,946) 3,704 70,903
* With effect from 1 April 2007, changes in fair value of investments which
are readily convertible into cash, without accepting adverse terms, at the
balance sheet date are included in realised, rather than unrealised, capital
reserves. The balance on both reserves at 1 July 2007 have been amended by a
reverse transfer to reflect this change.
Own
shares Share Capital Capital Capital
Share held in premium redemption reserve reserve Revenue
capital Treasury account reserve realised unrealised reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months ended 31
December 2007
(unaudited)
30 June 2007 6,286 (8,544) 28,319 1,678 86,727 (7,759) 4,192 110,899
Net return after
taxation for the - - - - - - (988) (988)
period
Dividend paid and
declared - - - - - - (158) (158)
Net gains on
realisation of
investments - - - - 1,329 - - 1,329
Fair value
movement - - - - - (28,812) - (28,812)
in investments
Costs allocated
to - - - - (820) - - (820)
capital
Cost of shares
held in - (303) - - - - - (303)
Treasury
Cost of shares
purchased for
cancellation - - - - (681) - - (681)
Nominal value of
shares purchased
for (44) - - 44 - - - -
cancellation
31 December 2007 6,242 (8,847) 28,319 1,722 86,555 (36,571) 3,046 80,466
Balance sheet
as at 31 December 2008
As at As at As at
31 December 2008 30 June 2008 31 December 2007
Note GBP'000 GBP'000 GBP'000
(unaudited) (audited) (unaudited)
Fixed assets
Investments at fair value 56,552 38,967 86,059
Current assets
Debtors 461 415 43
Cash at bank 1,904 32,538 2
2,365 32,953 45
Creditors - amounts
falling
due within one year
Bank overdraft - - 4,767
Creditors 262 382 -
Accruals - 635 871
262 1,017 5,638
Net current 2,103 31,936 (5,593)
assets/(liabilities)
Net assets 58,655 70,903 80,466
Share capital and reserves
Called up share capital 8 6,126 6,126 6,242
Own shares held in 8 (8,847) (8,847) (8,847)
Treasury
Share premium account 28,319 28,319 28,319
Capital redemption reserve 1,838 1,838 1,722
Capital reserve - realised 52,954 53,709 86,555
- unrealised (25,472) (13,946) (36,571)
Revenue reserve 3,737 3,704 3,046
Shareholders' funds -
equity 58,655 70,903 80,466
interests
Total net assets for the
purposes
of calculating net asset 58,655 70,903 80,466
values -
including current period
revenue
Net asset value per
Ordinary 265.12p 320.48p 356.22p
share
Number of Ordinary shares
in
issue (excluding shares 22,123,926 22,123,926 22,588,926
held in
Treasury)
Statement of cash flows
for the six months to 31 December 2008
Six months to 31 Year ended Six months to 31
December 2008 30 June 2008 December 2007
GBP'000 GBP'000 GBP'000
(unaudited) (audited) (unaudited)
Operating activities
Investment income
received 423 1,371 873
Deposit interest 590 31 8
received
Treasury interest (172) - -
purchased
Investment
management (469) (1,001) (557)
fees paid
Secretarial fees (37) (52) (24)
paid
Other cash payments (808) (922) (838)
Net cash outflow
from (473) (573) (538)
operating activities
Servicing of finance
Interest paid - (487) (431)
Net cash outflow
from
servicing of finance - (487) (431)
Capital expenditure
and
financial investment
Purchases of (32,475) (23,149) (23,615)
investments
Sales of investments 2,605 69,656 31,778
Net cash
(outflow)/inflow
from capital (29,870) 46,507 8,163
expenditure
and financial
investment
Equity dividends - (158) (158)
paid
Financing
Reorganisation costs 92 (166) -
Shares purchased for
cancellation (383) (1,465) (681)
Shares purchased for
Treasury - (303) (303)
Net cash outflow
from (291) (1,934) (984)
financing
(Decrease)/increase
in (30,634) 43,355 6,052
cash
Notes to the accounts
as at 31 December 2008
1. Financial information
The financial information contained in this report does not constitute full
statutory accounts as defined in Section 434 of the Companies Act 2006. The
financial information for the six months ended 31 December 2008 and 31
December 2007 has not been audited nor reviewed by the Company's Auditor
pursuant to the Auditing Practices Board guidance on such reviews.
The information for the year ended 30 June 2008 has been extracted from the
latest published audited financial statements, which have been filed with the
Registrar of Companies. The report of the Auditors on those financial
statements contained no qualification or statement under Sections 237 (2) or
(3) of the Companies Act 1985.
2. Accounting policies
The financial statements are prepared under the historical cost convention as
modified by the revaluation of financial asset investments, and in accordance
with applicable accounting standards and with the Statement of Recommended
Practice 2003 regarding the Financial Statements of Investment Trust Companies
("SORP") as revised in December 2005.
The financial statements are prepared on the basis of the accounting policies
set out in note 1 of the annual financial statements for the year ended 30
June 2008.
All investments held by the Company are classified as `fair value through
profit or loss'. For investments actively traded in organised financial
markets, fair value is generally determined by reference to Stock Exchange
quoted market bid prices or last traded prices at the close of business on the
balance sheet date.
3. Net asset value per share
These net asset values have been calculated in accordance with the accounting
policies set out in note 2.
31 December 30 June 31 December
2008 2008 2007
GBP'000 pence GBP'000 pence GBP'000 pence
Net asset 58,655 265.12 70,903 320.48 80,466 356.22
value*
* including current period revenue.
4. Taxation
The Company is subject to corporation tax at 28% (2007: 30%). Certain
re-organisation costs may not be deductible for corporation tax. However, UK
dividends are not subject to corporation tax and use of brought forward losses
covers any current taxable income of the Company and, as a result, there is no
taxation charge.
Six months to Year ended Six months to
31 December 30 June 31 December
2008 2008 2007
GBP'000 GBP'000 GBP'000
Profit on ordinary
activities 33 (330) (988)
before tax
Profit on ordinary
activities
multiplied by the standard
rate of 9 (98) (296)
corporation tax in the UK
of 28%
(2007: 30%)
UK dividends not chargeable
to (74) (390) (204)
corporation tax
Expenses not deductible for
tax 197 72 6
purposes
Expenses charged to capital
reserve - (332) (246)
(Utilisation of brought
forward (132) 748 740
losses)/excess expenses of
period
Total current tax - - -
5. Reconciliation of net revenue before finance costs and taxation to net cash
(outflow)/inflow from operating activities
Six months to Year ended Six months to
31 30 June 31
December 2008 December
2008 2007
GBP'000 GBP'000 GBP'000
Net revenue before finance costs and (12,248) (37,242) (28,883)
taxation
Add back losses on investments 12,284 36,231 27,483
(Decrease)/increase in creditors and (463) 419 680
accruals
Increase in prepayments and accrued (204) (238) (9)
income
Decrease in dividends receivable 158 48 191
Capital related expenses - 209 -
(473) (573) (538)
6. Investment management Fee
The investment management fee for the period was reduced by the unwinding of
the provision to cover the unexpired period of notice in relation to an
agreement with Unicorn Asset Management Limited.
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Investment management fee 123 123 246
Unwinding of provision for
unexpired period of notice (126) (126) (252)
(3) (3) (6)
Of these, the amounts payable to Investment Managers, throughout the period
were as follows:
Six months to Year ended Six months to
31 December 2008 30 June 2008 31 December 2007
GBP'000 GBP'000 GBP'000
Unicorn 226 1,140 1,203
Knox D'Arcy 20 250 30
246 1,390 1,233
7. Professional fees
During the six months ended 31 December 2008, a total of GBP699,212 (inclusive
of irrecoverable VAT) was spent on non-recurring advisers' fees.
8. Share Buybacks
There were no share buybacks during the six months ended 31 December 2008.
Directors and Advisers
Directors: Jonathan Carr (Chairman)
Nicholas Jeffrey
Garth Milne
Company Secretary Capita Sinclair Henderson Tel: 01392 412 122
Limited
and Registered Office: Beaufort House Fax: 01392 253 282
51 New North Road
Exeter EX4 4EP
Registrar: Equiniti Limited Tel: 0870 600 3970
Aspect House Fax: 0870 600 3980
Spencer Road www.shareview.co.uk
Lancing
West Sussex BN99 6DA
Investment Manager: Knox D'Arcy Investment Tel: 020 7495 2202
Management Limited
11 St James's Place
London SW1A 1NP
Sources of further information
The Company's shares are listed on the London Stock Exchange. The mid-market
prices are quoted daily in the Financial Times, the Daily Telegraph and the
Daily Mail. Monthly information updates are available on the Company from
www.trustnet.com. The Company has its own website at
www.eagletinvestmenttrust.co.uk.
Share dealing
Shares can be purchased and sold through your usual stockbroker or through the
Eaglet Savings Scheme.
Frequency of NAV publication
The Company's net asset value is released to the Stock Exchange weekly.
Banker: HSBC Bank PLC Solicitors: Lawrence Graham
8 Canada Square 190 Strand
London E14 5HQ London WC2R 1JN
Auditor: KPMG Audit Plc Covington & Burling
LLP
100 Temple Street 265 Strand
Bristol BS1 6AG London WC2R 1BH
Broker: Arbuthnot Securities
Limited
20 Ropemaker Street
London EC2Y 9AR
An investment company as defined under section 833 of the Companies Act 2006.
Registered in England No. 2812946
END
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