TIDMUKT
RNS Number : 7667K
UK Select Trust Limited
24 August 2012
UK Select Trust Limited
(the "Company")
Registered No: 475
Announcement of Interim Results and Dividend
The financial information set out in this announcement is the
full unedited unaudited half-yearly financial report for the period
ended 30 June 2012 of the Company, as approved by the Board of
Directors today. The half-yearly financial report will be uploaded
to the investment manager's website and delivered to shareholders
shortly.
The Company also announces that an interim dividend of 0.95
pence per share will be paid on 5 November 2012 to shareholders on
the register as at close of business on 7 September 2012 with a
corresponding ex-divided date of 5 September 2012.
Enquiries:
Secretary
Kleinwort Benson (Channel Islands) Fund Services Limited
Tel: + 44 (0) 1481 710607
24 August 2011
UK Select Trust Limited
Half-Yearly Report and Condensed Unaudited Financial
Statements
for the period 1 January 2012 to 30 June 2012
UK Select Trust Limited
Contents
Introductory Trust Information 2
Financial Highlights 3
Cautionary Note 3
Directors and Advisors 4
Investment Objective and Policy 5
Chairman's Statement 6
Investment Manager's Report - SWIP 7
Investment Manager's Report - Threadneedle 8
Responsibility Statement 9
The Portfolio and Sector Distribution 10
Condensed Statement of Comprehensive Income 15
Condensed Statement of Financial Position 17
Condensed Statement of Net Assets Attributable to Shareholders
18
Condensed Statement of Cash Flows 19
Notes to the Condensed Financial Statements 20
Introductory Trust information
UK Select Trust Limited's (the "Company") ordinary shares are
traded on the Main Market of the London Stock Exchange. They can be
bought or sold by investors through a stockbroker or by asking a
professional adviser e.g. lawyer, accountant or bank manager to do
so on their behalf.
The Company's share price is published daily under Investment
Companies in the Share Information Service in the Financial Times.
In addition it is published every Monday on the business pages of
The Guernsey Press and Star and Jersey Evening Post.
Financial Highlights
Six months Six months
ended ended Year ended
30 June 30 June 31 December
2012 2011 2011
Net asset value per
share 137.30p 167.46p 142.08p
Equity Shareholders'
interest (1) GBP28.47m GBP34.82m GBP29.47m
Revenue return on ordinary activities
for the financial period/year
after taxation GBP0.12m GBP0.33m GBP0.91m
Capital (deficit)/ return on
ordinary activities for the financial
period/ year after taxation (GBP0.47m) GBP1.50m (GBP4.17m)
Revenue return per ordinary
share 0.57p 1.60p 4.38p
Capital (deficit)/ return
per ordinary share (2.31p) 7.25p (20.15p)
Dividend per ordinary
share (2) 0.95p 0.95p 4.10p
Share Price 122.50p 137.50p 120.00p
Net asset value total
return (3) 1.14% 5.39% (11.68%)
FTSE All-Share total
return 3.32% 2.96% (3.46%)
((1) During the period the Company purchased 250,000 ordinary
shares of 10p from the market to be held in Treasury. 242,967
ordinary shares of 10p each from the shares held in Treasury were
reissued during the period. 94,911 shares remain in Treasury at 30
June 2012. These are held for reissue and the Company does not
intend to cancel these.
(2) The dividend figures include the proposed dividend for the
relevant financial period.
(3) Source: Datastream. Basis: Income reinvested and net of
expenses.
Dividends
An interim dividend of 0.95p per share will be paid on 5
November 2012 to shareholders on the register at 7 September 2012
(Six months ended 30 June 2011: 0.95p). The Company intends to
continue with the policy of paying a second interim dividend each
year to shareholders in May of the following year in place of a
final dividend.
Cautionary Note and Forward Looking Statements
The Investment Management Report (IMR) has been prepared solely
to provide additional information to shareholders to assess the
Company's strategies and the potential for those strategies to
succeed. The IMR should not be relied on by any other party or for
any other purpose.
The IMR contains certain forward-looking statements. These
statements are made by the Investment Manager in good faith based
on the information available to them up to the time of their
approval of this report and such statements should be treated with
caution due to the inherent uncertainties, including both economic
and business risk factors, underlying any such forward looking
information.
Directors and Advisors
J M Le Pelley (Chairman), (Born 1949) resident in
Guernsey,Non-executive Chairman. He joined the board in 1983. Other
directorships include AcenciA Debt Strategies Limited.
D R Maltwood, (Born 1938) resident in Jersey, Non-executive
Director. He joined the board in 1997 after a career in stock
broking in Jersey. He has held a number of positions including the
Chairman and Director of a number of quoted companies.
G Ross Russell, (Born 1933) resident in the UK,Non-executive
Director. He joined the board in 1995. He is the Chairman of
Foresight 3 VCT Plc and former Chairman of the Chartered Institute
of Securities and Investment and Deputy Chairman of the London
Stock Exchange.
J G West FCA, (Born 1947) resident in the UK, Non-executive
Director. He joined the board in 1997. He was the Chairman of
Henderson Fledgling Trust Plc (formerly Gartmore Fledgling Trust
Plc) he retired from the Board at the end of 2011. He was also the
Chairman of Canaccord Genuity Limited, he became Deputy Chairman of
Canaccord Genuity Limited in March 2012. He is the Chairman of New
City High Yield Fund Limited, and a Director of a number of public
and private companies including British Assets Trust Plc and JP
Morgan Income and Capital Trust Plc. He is a former chief executive
of Lazard Asset Management Limited.
D Warr, (Born 1953) resident in Guernsey, Non-executive Director
and Audit Committee Chairman. He is a fellow of the Institute of
Chartered Accountants in England and Wales and joined the Board in
2006. He is also a Non-executive Director of Breedon Aggregates
Limited, Schroder Real Estate Investment Trust Limited and
Unigestion (Guernsey) Limited.
Advisors
Secretary and Registered Office Registrars
Kleinwort Benson (Channel Islands) Fund Services Limited Capita Registrars (Guernsey) Limited
Dorey Court Longue Hougue Road
Admiral Park St Sampson
St Peter Port Guernsey GY2 4JN
Guernsey GY1 2HT 0870 162 3100
01481 727111 (calls cost 10p per minute plus network extras,
lines are open 8:30am to 5:30pm Monday-Friday)
Investment Manager
Until 30 July Brokers and advisors
Scottish Widows Investment Partnership Limited Canaccord Genuity Limited
Edinburgh One 88 Wood Street
Morrison Street London
Edinburgh EH3 8BE EC2V 7QR
0131 655 8500 0207 523 8000
As from 31 July
Threadneedle Asset Management Limited
60 St Mary Axe
London EC3A 8JQ
United Kingdom
0207 464 5000
Auditor Bankers and Custodian
Deloitte LLP HSBC Bank plc
Regency Court 8 Canada Square
Glategny Esplanade London E14 5HQ
St Peter Port
Guernsey GY1 3HW
01481 724011
Investment Objective and Policy
The Company's Investment policy (as published in the Annual
Financial Report for the year ended 31 December 2011) has been
reviewed by the Board and expanded to provide more detail of the
policies which the Company follows regarding asset allocation, risk
diversification and gearing as set out below. These revisions were
not considered material but rather were designed to provide
clarification for shareholders.
Objective
The Company's investment objective is to provide shareholders
with a total return in excess of the total return on the FTSE
All-Share Index, together with a progressive dividend policy.
Investment Policy
The Company is permitted to invest in any security listed or
quoted on any UK stock exchange provided that no less than 80 per
cent of its gross assets at the time an investment is made are
invested in constituents of the FTSE All-Share index.
There are no minimum or maximum limits on the number of
investments in the portfolio but it is expected that the portfolio
will generally comprise shares and securities in 50 to 90
companies. The Company seeks to manage risk in part through heeding
the following investment restrictions:
-- The top five holdings in the Company's portfolio may not
exceed 40 per cent of the total value of portfolio.
-- The top three sectors represented in the portfolio may not
exceed 50 per cent of the total value of the portfolio.
-- The securities of no one company may represent more than 10
per cent of the value of the Company's portfolio measured at the
time of acquisition and subsequently, when additions are made to
the holding.
-- The Company will not hold more than 5 per cent of the issued
share capital (or voting shares) in any one company.
-- While the Company may hold shares in other investment
companies (including investment trusts), the Company will not
invest more than 10 per cent., in aggregate, of the value of its
total assets in other listed closed-ended investment funds (save to
the extent that such closed-ended investment funds have published
investment policies to invest no more than 15 per cent. of their
total assets in such other listed closed-ended investment
funds).
Cash
The Company intends to be fully invested in normal market
conditions but may hold up to 20 per cent of net asset value in
cash on deposit (or in short-term money market instruments) during
periods in which the Investment Manager believes markets are
overvalued or expects them to fall.
Gearing
Gearing is used selectively in order to leverage the Company's
portfolio to enhance returns where the Investment Manager considers
it appropriate to do so. The Board has set a gearing limit for the
Company of a maximum of 20 per cent of net assets at the time of
draw down. However, in normal market conditions, borrowings are not
expected to exceed 10 per cent.
Derivatives
Subject to the Board giving its prior approval, the Investment
Manager is permitted to invest in options and other derivatives for
the purposes of efficient portfolio management only.
Investment Process
The Investment Manager's investment approach is driven by stock
selection, with a focus on risk and reward. Reward is derived from
valuation and profit opportunity. In terms of risk, it is the level
of business risk rather than index weight that determines position
size in the portfolio, with portfolio risk minimised through
diversification. Considerable emphasis is placed on identifying
companies which are well managed, have sustainable franchises,
strong balance sheets and cash flow generation, and which trade on
attractive valuations relative to peers and history.
Chairman's Statement
Review of Performance
I am pleased to present your Company's interim report for the
six months to 30 June 2012.
In the period the net asset value rose by 1.14% on a total
return basis. Unfortunately this compared unfavourably with the
3.32% total return from the FTSE All-Share Index.
The most important matter I must tell you about is the change of
Investment Manager. You will already have received a copy of the
announcement the Company made concerning the resignation of
Scottish Widows Investment Partnership Limited ("SWIP"). This came
as a surprise to your Board but with the help of our Brokers we put
in place a search for a suitable replacement. Many applications for
the position were received and after considering the various
proposals we received and conducting interviews, Threadneedle Asset
Management Limited ("Threadneedle") was appointed with effect from
31 July 2012. Simon Brazier, who is head of Threadneedle's UK
Equities team, will be responsible for management of the Company's
portfolio. He has an impressive record with the Threadneedle UK
Fund and intends to manage your Company's portfolio in accordance
with this fund's investment strategy. The board is excited about
this appointment and looks forward to sharing in the success of
Simon Brazier's UK Equity Alpha strategy. The Company has incurred
legal and professional fees in connection with the change of
Investment Manager, but against this the Board has negotiated that
neither SWIP nor Threadneedle will charge management fees for
August or September 2012 You will see that in this report SWIP have
provided an Investment Manager's report for the period ending 30
June 2012 and Threadneedle have provided a report including the
outlook for the future.
Share Price and discount
Over the period under review, the share price increased by 2.08%
from 120p to 122.5p, and the discount at which the shares trade
relative to their net asset value was 10.78% at the end of the
period compared with 15.54% at the start of the period.
Gearing
The Company remained debt free during the period with no
gearing.
Dividend
Earnings per share for the half year amounted to 0.57p (2011:
1.6p). The Board has declared an interim dividend of 0.95p per
share (2011:0.95p).
J M Le Pelley
Chairman
23 August 2012
Investment Manager's Report
SWIP Introduction
At first glance it would appear that the UK equity market
enjoyed a solid start to 2012. But while the FTSE All-Share index
produced a total return of 3.32% over the first six months of the
year, headline return figures masked a considerable degree of
volatility. Share prices trended generally higher for the first two
and a half months of the year, before dropping from mid March
through to late May.
The year began with gathering signs of economic recovery in the
United States. A series of strong data readings triggered hopes
that 2012 might see the start of the long-hoped-for surge in
economic growth. The second factor underpinning the rise in the UK
market was a hope that the European Central Bank's long-term
refinancing operation (LTRO) could serve two useful purposes:
reducing liability refinancing risk among European banks and
lowering sovereign borrowing costs. In response, equity markets
surged higher in February and into early March. By mid March the
FTSE All-Share index stood some 8% above its level at the start of
the year.
The market, however, struggled to hold onto those gains. A
steady drip of weak data on the domestic economy helped to erode
some of the positive sentiment that had built up in the early part
of the year. April brought official confirmation that the UK had
succumbed to a double-dip recession. Weakness at home was mirrored
by deteriorating economic readings from two key overseas markets:
China and Europe. A series of troubling data releases from Beijing
revived old worries of a hard landing while corresponding data
points from the eurozone also carried a grim message: despite the
LTRO and various rescue packages announced by EU leaders, the
eurozone is slipping steadily back into recession.
The quarter ended on a positive note with greater than expected
progress outlined in the closing statement from the Euro area
summit but a comprehensive resolution to the fundamental problems
of over-leverage and a lack of growth remains some way off.
Performance
On 13 April SWIP announced that, in response to changing client
needs, it would further reposition its GBP54 billion equities
business. As a result of these changes, SWIP announced its
resignation as Investment Manager of UK Select Trust Limited and at
the same time James Clunie took over responsibility for the
portfolio from Peter Cockburn for the remainder of the notice
period.
This was a mixed, but overall disappointing, period of
performance for the Company. Performance in the first quarter of
2012 was strong, with returns well ahead of the FTSE All-Share
benchmark. Holdings in Indus Gas, Essar Energy and iEnergizer were
amongst the most significant positive contributors. Over the next
three months performance was much weaker, giving back all of the
gains of the earlier period. In part that performance was driven by
the market's reaction to the changes being effected within SWIP's
equity business. As a result, share prices of a number of the
Company's largest holdings came under pressure, unrelated to the
long term fundamentals underpinning those investments.
Portfolio activity
During the first half of 2012 the Company continued to be
defensively positioned, reflecting concerns over the potential for
a slowdown in Chinese growth together with on-going developments
around the eurozone crisis. We sold positions in Indus Gas, Smiths
Group and Ryanair and reinvested proceeds in a number of new
holdings. These included Imperial Tobacco, Sage Group and BAE
Systems. Having entered the year with no exposure to the banking
sector, we also added both HSBC Holdings and Royal Bank of Scotland
to the portfolio.
Scottish Widows Investment Partnership
31 July 2012
Investment Manager's Report (continued)
Threadneedle Introduction
Following Threadneedle's appointment as the Company's investment
manager, on the 31st July 2012, the Company's portfolio has been
realigned with Threadneedle's UK Equity Alpha Strategy. This
strategy is run by Threadneedle's Head of UK Equities, Simon
Brazier, and seeks to deliver consistent performance above the FTSE
All-Share using a broadly diversified portfolio of 50-90 stocks. At
the portfolio level diversification is a key driver of portfolio
construction. The aim is to diversify the Company by investment
theme, growth drivers, style and market capitalisation such that
the Company is never a one way bet on any of these factors. Mr
Brazier applies this investment strategy in managing the
Threadneedle UK Fund, which has delivered top quartile performance
since he began managing the fund in April 2010. Strong stock
selection, backed by Threadneedle's significant UK equity resource,
has been the main driver of performance.
Outlook
We expect the domestic economy to remain in the doldrums for
several years, and the eurozone crisis is also likely to continue
to affect investor sentiment over the short to medium term.
However, there are also a number of positive factors at play. The
UK market offers unrivalled exposure to high quality, international
earners with three quarters of the market's earnings derived from
overseas. Meanwhile, valuations are attractive: the dividend yield
is well above the yield on gilts, while dividend cover is above the
long-term average. Balance sheets are generally strong, dividend
growth is healthy and, by and large, corporate financial discipline
remains good. Over the long term, the market offers very good value
and should be able to deliver healthy returns.
In terms of portfolio positioning, we continue to find valuation
opportunities across all sectors. The main underweights remain UK
Banks and Mining where we still see downside risk. Our focus in
portfolio construction centres on identifying financially-robust
and well-managed companies where future cash flows are not
reflected in valuations. We are then using the short term
volatility in the market to exploit this long term valuation
opportunity.
Threadneedle Asset Management
23 August 2012
Responsibility Statement
To the best of the knowledge of the Directors:
-- The financial statements have been prepared in accordance
with International Accounting Standard 34 "Interim Financial
Reporting" and give a true and fair view of the assets,
liabilities, financial position and profit or loss of the
Company.
-- The Chairman's Statement, Investment Managers' Reports and
Notes to the Financial Statements are incorporated herein by
reference and include a fair review of the development and
performance of the Company and a description of the principal risks
and uncertainties that it faces for the next six months as required
by DTR 4.2.7 of the Disclosure and Transparency Rules.
-- There were no related party transactions in the period, nor
any changes in related party transactions described in the last
annual report, that could have a material effect on the financial
position of the Company in the period, other than as disclosed in
the financial statements. Details of related parties are set out in
note 9 to the financial statements.
By order of the Board
JM Le Pelley
Director
23 August 2012
The Portfolio as at 30 June 2012
Market
Company Value Activity
GBP'000
1 AstraZeneca Plc 2,266 One of the world's largest pharmaceutical
companies.
KSK Power Venture Engaged in emerging opportunities in
2 Plc 1,504 the power development market.
3 Reed Elsevier Plc 1,497 Publisher and information provider, publishing
information for the scientific and medical
professions, legal, and business-to-business
sector.
4 BP Plc 1,452 One of the world's largest energy companies,
providing fuel for transportation, energy
for heat and light, retail services and
petrochemicals products for everyday
items.
5 Resolution Ltd 1,390 Offer a broad spectrum of funds to cater
for the differing investment needs.
6 Essar Energy Plc 1,235 Indian-focused energy company with assets
in the existing power and oil and gas
businesses.
7 Smiths Group Plc 1,205 A world leader in the practical application
of advanced technologies, Smiths Group
delivers products and services for the
threat & contraband, medical devices,
energy, communications and engineered
components markets worldwide.
Berkeley Group Holdings
8 Plc 1,149 UK-based house builder and developer.
9 iEnergizer Ltd 1,033 Engaged in providing third-party integrated
business process outsourcing solutions
to clients throughout the world in three
primary sectors: banking, financial services
and insurance, and entertainment and
telecommunications.
10 GlaxoSmithKline 990 One of the world's leading research-based
Plc pharmaceutical and healthcare companies.
11 Imperial Tobacco 931 Bristol based cigarette, cigar and tobacco
Plc manufacturers.
12 Rio Tinto Plc 868 One of the global leaders in the extraction
and processing of the earth's mineral
resources.
13 RSA Insurance Group 810 Worldwide commercial insurer providing
Plc property, automobile, liability and speciality
insurance products.
Great Eastern Energy
14 Corporation Plc 750 Indian-based energy provider.
15 Invensys Plc 730 Develops and applies advanced technologies
that enable the world's manufacturing
and energy-generating facilities, mainline
and mass transit rail networks, and appliances
to operate safely and in an energy-efficient
manner.
16 BAE Systems Plc 721 A global company engaged in the development,
delivery and support of advanced defence,
security and aerospace.
17 Genel Energy Plc 667 Investment vehicle aiming to purchase
emerging markets oil and gas businesses.
18 Nandan Cleantec 635 A sustainable energy company with a strong
Plc foothold in the bio fuel space.
19 LXB Retail Properties 594 Jersey based investment company investing
Plc in out-of-town and edge-of-town retail
assets.
20 British Sky Broadcasting 591 Provider of a pay television broadcasting
Plc service to customers in the UK and the
Republic of Ireland.
21 Tesco Plc 589 A British multinational grocery and general
merchandise retailer.
22 Sage Group Plc 582 A leading supplier of business management
software and services.
23 Glencore International 541 A leading integrated producer and marketer
Plc of commodities.
24 SABMiller Plc 490 One of the world's largest brewers.
The Portfolio as at 30 June 2012 (continued)
25 Breedon Aggregates 472 Acquires and manages companies and businesses
Ltd in the UK and international building
materials industry.
Cadogan Petroleum An independent oil and gas exploration,
26 Plc 430 development and production company.
Supplier of high quality, proprietary
business-to-business knowledge through
some of the longest-standing brands in
the world of publishing, conferences,
27 Informa Plc 417 exhibitions and training.
28 Aviva Plc 370 A British multinational insurance company.
29 Hardy Oil & Gas 343 AIM-listed oil and gas exploration company.
Plc
30 HSBC Holdings Plc 322 Large UK - based financial services group.
31 Xstrata Plc 313 A diversified Swiss mining company operating
a number of production sites in all continents
of the world.
32 BG Group Plc 286 Involved in oil and gas transmission
and distribution, as well as power generation.
33 Tullett Prebon Plc 269 As intermediary in the wholesale financial
markets industry facilitating the trading
activities of its clients.
34 Royal Bank of Scotland 244 Retail bank that provides branch facilities
Plc throughout the British Isles.
Petroceltic International Oil and gas exploration and production
35 Plc 127 company.
36 Kingfisher Plc 60 Europe's leading home improvement retailer.
37 Resaca Exploitation 22 US-based independent oil and gas exploration
Inc company.
38 Leed Petroleum Plc 1 Oil and gas exploration and production
company focussed on the Gulf of Mexico.
-------
These holdings represent 100% of the
Total Valuation 26,896 total valuation.
=======
The Portfolio as at 3 August 2012
Since Threadneedle's appointment as Investment Manager, the
Company's portfolio has undergone a process of realignment. As a
result, the Board believes that it would be helpful for
shareholders to have a list of the Top 20 holdings as at 3 August
2012.
Market
Company Value Activity
GBP'000
1 GlaxoSmithKline 1,209 One of the world's leading research-based
Plc pharmaceutical and healthcare companies.
2 BP Plc 1,161 One of the world's largest energy companies,
providing fuel for transportation, energy
for heat and light, retail services and
petrochemicals products for everyday
items.
Royal Dutch Shell A Dutch -British multinational oil and
3 Plc 1,015 gas company.
4 AstraZeneca Plc 824 One of the world's largest pharmaceutical
companies.
5 Rio Tinto Plc 817 One of the global leaders in the extraction
and processing of the earth's mineral
resources.
6 BG Group Plc 808 Involved in oil and gas transmission
and distribution, as well as power generation.
7 BT Group Plc 805 A British multinational telecommunications
services company headquartered in London.
A British-Dutch multinational consumer
8 Unilever Plc 736 goods company.
British American A British multinational tobacco company
9 Tobacco Plc 647 headquartered in London.
10 Imperial Tobacco 616 Bristol based cigarette, cigar and tobacco
Plc manufacturers.
11 HSBC Holdings Plc 555 Large UK - based financial services group.
12 Melrose Plc 546 A leading British-based investment company
specialising in the acquisition and performance
improvement of under-performing businesses.
13 Booker Group Plc 527 The United Kingdom's largest food wholesale
operator, offering branded and private-label
goods.
A British multinational chemicals and
Johnson Matthey precious metals company headquartered
14 Plc 527 in London.
15 Compass Group Plc 512 A multinational contract foodservice
and support services company headquartered
in Chertsey.
16 Persimmon Plc 511 A British house building company, headquartered
in York, England.
17 Legal and General 485 A British multinational financial services
Plc company headquartered in London, United
Kingdom. Its products include life insurance,
general insurance, pensions and investments.
18 Breedon Aggregates 483 Acquires and manages companies and businesses
Ltd in the UK and international building
materials industry.
Wolseley Motors A British motor vehicle manufacturing
19 Limited 463 company.
20 Tesco Plc 452 A British multinational grocery and general
merchandise retailer.
--------
These holdings represent 46.8% of the
Total Valuation 13,699 total valuation.
========
Sector Distribution as at 30 June 2012
Total Total
30 June 30 June
2012 2011
Sector Classification % %
----------------------------------- -------- -------------------
Resources
Oil and Gas 18.7 27.7
Alternative energy 2.2 -
20.9 27.7
----------------------------------- -------- -------------------
Basic industrials
Construction and building
materials 1.7 5.3
Mining 6.0 20.2
7.7 25.5
----------------------------------- -------- -------------------
Non-cyclical consumer
goods
Tobacco 3.3 -
Food & Beverage producers 4.0 1.4
Household goods 4.0 -
Pharmaceuticals and biotechnology 11.4 -
22.7 1.4
----------------------------------- -------- -------------------
Cyclical services
Support services 8.2 1.7
Leisure, entertainment
and hotels - 2.6
Media and entertainment 8.8 5.2
17.0 9.5
----------------------------------- -------- -------------------
Utilities
Utilities other 5.3 3.4
5.3 3.4
----------------------------------- -------- -------------------
General Industries
Packaging - 1.8
Advanced Technologies 4.3 4.2
Aerospace 2.5 -
6.8 6.0
----------------------------------- -------- -------------------
Financials
Banks 2.0 8.5
Specialty and other finance 0.9 2.6
Real Estate 2.1 1.4
Investment companies - 1.8
Non life insurance 2.8 2.6
Life assurance 6.2 9.6
14.0 26.5
----------------------------------- -------- -------------------
Net current assets 5.6 -
----------------------------------- -------- -------------------
Net assets 100.0 100.0
----------------------------------- -------- -------------------
Note: The distribution of investments is based on the valuations
at 30 June 2012 and 30 June 2011. All of the investments above are
listed or quoted on the London Stock Exchange.
Sector Distribution as at 30 June 2012 (continued)
1 Resources 20.9%
2 Basic industrials 7.7%
Non-cyclical consumer
3 goods 22.7%
4 Cyclical services 17.0%
5 General industrials 6.8%
6 Utilities 5.3%
7 Financials 14.0%
---------------------- ------
By sector as a percentage
Condensed Statement of Comprehensive Income
for the six months ended 30 June 2012 (unaudited)
Six months ended 30 June Six months ended 30 June
2012 2011
Notes Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Dividend revenue 3 404 - 404 553 - 553
Net (losses)/gains on financial
assets
at fair value through profit
or loss 5 - (400) (400) - 1,571 1,571
Net foreign exchange
loss - (18) (18) - (1) (1)
--------- -------- ------- ---------- --------- -------
404 (418) (14) 553 1,570 2,123
Expenses
Investment management
fees 9 18 54 72 22 65 87
Performance fee 9 - - - 1 4 5
Administration fees 9 51 - 51 49 - 49
Registrars' fees 13 - 13 10 - 10
Auditors'
fees 9 - 9 9 - 9
Directors' fees
and expenses 9 58 - 58 55 - 55
Legal and professional
fees 80 - 80 - - -
Other expenses 56 - 56 76 - 76
--------- -------- ------- ---------- --------- -------
Total operating
expenses before
finance costs 285 54 339 222 69 291
--------- -------- ------- ---------- --------- -------
Operating profit/(loss)
before finance costs 119 (472) (353) 331 1,501 1,832
Finance costs
Interest payable 1 2 3 1 4 5
--------- -------- ------- ---------- --------- -------
Profit/(loss) for the
period 118 (474) (356) 330 1,497 1,827
Basic return/(deficit)
per ordinary share 4 0.57p (2.31)p (1.73)p 1.60p 7.25p 8.85p
--------- -------- ------- ---------- --------- -------
The total column of this statement is the condensed statement of
comprehensive income of the Company, with the revenue and capital
columns representing supplementary information.
All revenue and capital items in the above statement derive from
continuing operations. All income is attributable to the ordinary
shareholders of the Company.
The Notes on Pages 20 to 24 are an integral part of these
condensed financial statements.
Condensed Statement of Comprehensive Income (continued)
for the six months ended 30 June 2012 (unaudited)
Year ended 31 December 2011
Notes Revenue Capital Total
GBP'000 GBP'000 GBP'000
Income
Dividend revenue 3 1,307 - 1,307
Other revenue 3 - - -
Net losses on financial assets
at fair value through profit or loss
5 - (4,064) (4,064)
Net foreign exchange gain - 19 19
------------ ----------- ----------
1,307 (4,045) (2,738)
Expenses
Investment management fees 9 40 121 161
Administration fees 9 99 - 99
Registrars' fees 27 - 27
Auditors' fees 18 - 18
Directors' fees and expenses 9 111 - 111
Other expenses 103 - 103
------------ ----------- ----------
Total operating expenses
before finance costs 398 121 519
------------ ----------- ----------
Operating profit/(loss)
before finance costs 909 (4,166) (3,257)
Finance costs
Interest payable 2 7 9
------------ ----------- ----------
Profit/(loss) for the year 907 (4,173) (3,266)
Basic return/(deficit) per ordinary
share 4 4.38p (20.15)p (15.77)p
------------ ----------- ----------
The total column of this statement is the condensed statement of
comprehensive income of the Company, with the revenue and capital
columns representing supplementary information.
All revenue and capital items in the above statement derive from
continuing operations. All income is attributable to the ordinary
shareholders of the Company.
The Notes on Pages 20 to 24 are an integral part of these
condensed financial statements.
Condensed Statement of Financial Position
as at 30 June 2012 (unaudited)
30 June 30 June 31 December
Notes 2012 2011 2011
GBP'000 GBP'000 GBP'000
Assets
Cash and cash equivalents 1,244 346 2,340
Due from brokers 1,466 - -
Other receivables and accrued
income 28 122 226
Financial assets at fair value
through profit or loss 5 26,896 34,885 27,067
----------- ----------- ------------
Total assets 29,634 35,353 29,633
----------- ----------- ------------
Liabilities
Due to brokers 897 366 -
Other payables and accrued
expenses 268 167 162
Total liabilities 1,165 533 162
----------- ----------- ------------
Net assets attributable to shareholders 28,469 34,820 29,471
----------- ----------- ------------
Represented by
Share capital 7 2,083 2,083 2,083
Treasury share reserve 7 (157) (94) (153)
Reserves 26,543 32,831 27,541
----------- ----------- ------------
Net assets attributable to shareholders 28,469 34,820 29,471
----------- ----------- ------------
Number of ordinary shares in
issue (net of Treasury shares) 7 20,735,573 20,792,485 20,742,606
Net asset value per share 8 137.30p 167.46p 142.08p
----------- ----------- ------------
These financial statements were approved by the Board of
Directors on 23 August 2012 and signed on behalf of the Board
by:
JM Le Pelley D Warr
Director Director
The Notes on Pages 20 to 24 are an integral part of these
condensed financial statements.
Condensed Statement of Net Assets Attributable to
Shareholders
for the six months ended 30 June 2012 (unaudited)
Capital
Equity Treasury Capital Capital reserve-
share share Share redemption reserve-realised unrealised Revenue
capital reserve premium reserve *reclassified *reclassified reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2012 2,083 (153) 5,401 4,308 16,507* (2,748)* 4,073 29,471
Shares
repurchased
during the
period - (298) - - - - (298)
Cash
dividends:
-2011 2(nd)
interim
dividend - - - - - - (348) (348)
Scrip
dividends - 294 - - (294) - - -
Net profit - - - - (329) (145) 118 (276)
--------- --------- --------- ------------ ----------------- -------------- --------- --------
At 30 June
2012 2,083 (157) 5,401 4,308 15,884 (2,893) 3,843 28,469
--------- --------- --------- ------------ ----------------- -------------- --------- --------
There is no other recognised income and expenses for the six
months ended 30 June 2012
For the six months ended 30 June 2011 (unaudited)
Capital
Equity Treasury Capital Capital reserve-
share share Share redemption reserve-realised unrealised Revenue
capital reserve premium reserve *reclassified *reclassified reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January
2011 2,083 (245) 5,401 4,308 17,801* 131* 3,981 33,460
Shares
repurchased
during the
period - (124) - - - - - (124)
Cash
dividends:
-2010 second
interim
dividend - - - - - - (343) (343)
Scrip
dividends - 275 - - - - (275) -
Net profit - - - - 1,091 406 330 1,827
--------- --------- --------- ------------ ----------------- -------------- --------- --------
At 30 June
2011 2,083 (94) 5,401 4,308 18,892* 537* 3,693 34,820
--------- --------- --------- ------------ ----------------- -------------- --------- --------
There are no other recognised income and expenses for the six
months ended 30 June 2011
* Immaterial purchase transaction costs are initially
capitalised into the book cost of investments. For each year 2005
to 2009, adjustments were made to remove these capitalised costs.
However, these adjustments were overstated as they also included
sales transaction costs, as well as purchase transaction costs that
had already been expensed through the net gain/(loss) on the sale
of investments. As such, these historic adjustments have been
reversed. The reclassification increases the realised capital
reserve and decreases the unrealised capital reserve although total
capital reserves are unaffected. The reclassification has no impact
on the net assets of the Company.
The Notes on Pages 20 to 24 are an integral part of these
condensed financial statements.
Condensed Statement of Cash Flows
for the six months ended 30 June 2012 (unaudited)
Six months ended Year ended
30 June 30 June 31 December
2012 2011 2011
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Payment on purchase of financial
investments (19,742) (23,891) (50,910)
Proceeds from sale of financial
investments 18,942 20,450 49,286
Cash received from investments 597 602 1,286
Investment management fee paid (72) (42) (129)
Other cash payments (148) (142) (327)
Net cash outflow from operating
activities (423) (3,023) (794)
--------- ----------- ------------
Cash flows from financing activities
Interest paid (9) (5) (3)
Share repurchase (298) (124) (273)
Equity dividends paid (348) (343) (450)
Net cash outflow from financing
activities (655) (472) (726)
--------- ----------- ------------
Net decrease in cash and cash equivalents (1,078) (3,495) (1,520)
Effect of exchange rate changes
on cash and cash equivalents (18) - 19
Cash and cash equivalents at the
beginning of the period/year 2,340 3,841 3,841
Cash and cash equivalents at the
end of the period/year 1,244 346 2,340
--------- ----------- ------------
The Notes on Pages 20 to 24 are an integral part of these
condensed financial statements.
Notes to the Condensed Financial Statements (unaudited)
1. General information
UK Select Trust Limited is a close ended investment company
incorporated under The Companies (Guernsey) Law, 2008, as amended
with its registered office at Dorey Court, Admiral Park, St Peter
Port, Guernsey. UK Select Trust Limited's shares are traded on Main
Market of the London Stock Exchange.
The Company has no employees.
The half-yearly financial report has not been audited or
reviewed by the auditors Deloitte LLP pursuant to the Auditing
Practices Board guidance on 'Review of Interim Financial
Information'.
The information presented for the year ended 31 December 2011
does not constitute the statutory financial statements of the
Company. The 31 December 2011 annual financial report was made
public on 18 April 2012. The auditors' report on those financial
statements was unqualified and did not contain a statement under
Section 263(2) of The Companies (Guernsey) Law, 2008, as
amended.
2. Accounting Policies
a. Basis of presentation
The half-yearly report for the six months ended 30 June 2012 has
been prepared in accordance with IAS 34 'Interim Financial
Reporting' as adopted by the European Union.
b. Standards and interpretations
The accounting policies applied in the half-yearly report are
consistent with those of the annual financial statements for the
year ended 31 December 2011, as described in those financial
statements.
c. Going Concern
In the opinion of the Directors, there is a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. For this reason
the condensed financial statements have been prepared using the
going concern basis.
The Directors have arrived at this opinion by considering,
inter-alia, the following factors:
-- the Company has sufficient liquidity to meet all on-going expenses;
-- the portfolio of investments held by the Company consists of
listed investments which are readily realisable and therefore the
Company will have sufficient resources to meet its liquidity
requirements; and
-- the Company currently has no external borrowings and
therefore is under no obligation to repay any borrowing facilities
for the foreseeable future.
Notes to the Condensed Financial Statements (unaudited)
(continued)
3. Dividend and other revenue
Six months ended Year ended
30 June 30 June 31 December
2012 2011 2011
GBP'000 GBP'000 GBP'000
Dividend revenue from
investments designated
at fair value through
profit or loss:
Dividends 404 553 1,307
--------- -------- ------------
Total revenue 404 553 1,307
--------- -------- ------------
4. Basic return/(deficit) per ordinary share
Six months ended Six months ended Year ended
30 June 2012 30 June 2011 31 December 2011
Revenue Capital Total Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence pence pence pence
Return/(deficit) 0.57 (2.31) (1.73) 1.60 7.25 8.85 4.38 (20.15) (15.77)
======== ======== ======= ======== ======== ====== ======== ======== ========
Revenue return per ordinary share is based on the net revenue on
ordinary activities of GBP118,000 (Six months ended 30 June 2011:
GBP330,000. Year ended 31 December 2011: GBP907,000.) and on
20,562,644 ordinary shares, being the weighted average number of
ordinary shares in issue during the period (Six months ended 30
June 2011: 20,645,138. Year ended 31 December 2011:
20,704,828).
Capital return per ordinary share is based on a net capital
deficit for the financial period of GBP474,000 (Six months ended 30
June 2011: capital surplus GBP1,497,000. Year ended 31 December
2011: capital deficit GBP4,173,000) and on 20,562,644 ordinary
shares, being the weighted average number of ordinary shares in
issue during the period (Six months ended 30 June 2011: 20,645,138.
Year ended 31 December 2011: 20,704,828).
Notes to the Condensed Financial Statements (unaudited)
(continued)
5. Financial assets at fair value through profit or loss
Six months ended Six months Year ended
ended
30 June 2012 30 June 2011 31 December 2011
Fair % of Fair % of Fair % of net
Value net assets Value net assets Value assets
GBP'000 GBP'000 GBP'000
Financial assets at
fair value through profit
or loss
- Listed equity securities 26,896 94.47 34,875 100.23 27,057 91.82
-De-listed trading entities - - 10 0.03 10 0.03
26,896 94.47 34,885 100.26 27,067 91.85
-------- ------------ -------- ------------ -------- ------------
Six months ended Year ended
30 June 30 June 31 December
2012 2011 2011
Net (losses)/gains on financial GBP'000 GBP'000 GBP'000
assets at fair value through
profit or loss
Realised (losses)/gains (255) 1,165 (1,185)
Unrealised (losses)/gains (145) 406 (2,879)
------------ ------------ ------------
(400) 1,571 (4,064)
------------ ------------ ------------
6. Loan facility
The Company has a revolving 5 year loan facility, secured on the
assets of the Company, which is due to expire on 19 September 2012
with an aggregate principal amount of GBP2,000,000, for the
purposes of future investment. During the half-year ended 30 June
2012, the loan facility was not utilised. Interest is payable at a
rate of six month sterling LIBOR plus 0.6% and the borrowing is
held at amortised cost. During the period, interest of GBPnil (Six
months ended 30 June 2011: GBPnil. Year ended 31 December 2011:
GBPnil) was paid. A fee of 0.30% per annum is payable on the
undrawn amount of this facility, resulting in GBP3,000 being paid
for the period ended 30 June 2012(1) . Further, the Company is
required to comply with the following financial covenants imposed
by the bank:
-- the Company is required to ensure that the borrowing does not
at any time exceed 45% of the Adjusted Gross Asset Value;
-- the Company is required to maintain the Net Worth at not less that GBP20,000,000; and
-- the Company is required to ensure that the investment
portfolio includes holdings in not less that 30 separate
businesses.
(1) The loan is secured on the assets of the Company.
Notes to the Condensed Financial Statements (unaudited)
(continued)
7. Share capital
30 June 30 June 31 December
2012 2011 2011
GBP'000 GBP'000 GBP'000
Authorised
100,000,000 ordinary shares
of 10p each 10,000 10,000 10,000
250,000 5% cumulative preference
restrictive voting shares of
GBP1 each 250 250 250
10,250 10,250 10,250
============= ========= =====================
The holders of the five per cent cumulative preference
restrictive voting shares shall be entitled, out of profits for
dividend, to a fixed cumulative preferential dividend at the rate
of five per cent per annum and in a winding-up or on a return of
capital shall be entitled to repayment of capital in priority to
the ordinary shareholders. At 30 June 2012, no five per cent
cumulative preference restrictive voting shares had been issued (30
June 2011: none, 31 December 2011: none). The ordinary shareholders
carry the right to receive any surplus income and in winding-up any
surplus assets, after repayment of the preference capital and
dividends as above.
30 June 31 December
2012 2011
GBP'000 GBP'000
Issued, called up
and fully paid:
20,830,484 ordinary shares of 10p
each
(2011: 20,830,484) 2,083 2,083
================ ===================
30 June 2012
Treasury share
reserve Shares in issue
Shares Cost Shares Cost
Nominal GBP'000 Nominal GBP'000
Balance at 1 January
2012 87,878 153 20,830,484 2,083
Shares purchased and held in
Treasury 250,000 298 - -
Shares issued in lieu of dividends
from Treasury (242,967) (294) - -
Balance at 30
June 2012 94,911 157 20,830,484 2,083
------------- ----------- ---------------------- ---------
31 December 2011
Treasury share
reserve Shares in issue
Shares Cost Shares Cost
Nominal GBP'000 Nominal GBP'000
Balance at 1 January
2011 143,644 245 20,830,484 2,083
Shares purchased and held in
Treasury 214,000 273 - -
Shares issued in lieu of dividends
from Treasury (269,766) (365) - -
Balance at 31 December
2011 87,878 153 20,830,484 2,083
------------- ----------- ---------------------- ---------
During the period no shares were purchased for cancellation
(year ended 31 December 2011: none).
Notes to the Condensed Financial Statements (unaudited)
(continued)
7. Share capital (continued)
On 16 January 2012, 250,000 shares were purchased for Treasury
at a total cost including expenses of GBP297,500.
On 25 May 2012, 242,967 shares were issued to shareholders who
elected to receive them in lieu of a second interim cash dividend
for 2011. Ordinary shares of 10p each, fully paid were issued to
shareholders from the Treasury reserves account held by the
Company.
8. Net asset value per share
Net asset value per ordinary share is based on net assets
attributable to the ordinary shareholders of GBP28,469,000 (Six
months ended 30 June 2011: GBP34,820,000. Year ended 31 December
2011: GBP29,471,000) and on 20,735,573 (Six months ended 30 June
2011: 20,792,485. Year ended 31 December 2011: 20,742,606) ordinary
shares, being the number of ordinary shares in issue at the end of
the period.
9. Related party transactions
The members of the Board of Directors are listed on page 4 of
the half-yearly report. Fees earned by the Directors of the Company
during the period were GBP56,600 (Six months ended 30 June 2011:
GBP53,750. Year ended 31 December 2011: GBP107,500) of which
GBP27,000 (Six months ended 30 June 2011: GBPNil. Year ended 31
December 2011: GBPnil) was outstanding at the period end. Allowable
expenses claimed by Directors in the course of their duties
amounted to GBP1,389 for the six months ended 30 June 2012 (Six
months ended 30 June 2011: GBP1,067.Year ended 31 December 2011:
GBP3,417).
D Warr is a Non-Executive Director of Breedon Aggregates Limited
of which the Company holds 2,222,159 shares as at 30 June 2012.
The previous Investment Manager, Scottish Widows Investment
Partnership Limited ("SWIP") exercised discretion over 28.55% (Six
months ended 30 June 2011: 28.50%. Year ended 31 December 2011:
28.42%) of shares in the Company, on behalf of their clients, and
earned investment management fees of GBP71,786 (Six months ended 30
June 2011: GBP87,254. Year ended 31 December 2011: GBP161,204)
during the period of which GBP74,302 (Six months ended 30 June
2011: GBP87,254. Year ended 31 December 2011: GBP73,977) was
outstanding at the period end. During 2012 SWIP earned a
performance fee of GBPNil (Six months ended 30 June 2011: GBP5,232.
Year ended 31 December 2011: GBPNil) with nothing outstanding at
the period end. The basis of calculation of these fees is detailed
in note 4 of the annual financial statements.
The Company has appointed Kleinwort Benson (Channel Islands)
Funds Services Limited to provide administrative and accounting
services. Administrative fees (including the accounting fee) for
the period ended 30 June 2012 totalled GBP50,688 (Six months ended
30 June 2011: GBP49,330. Year ended 31 December 2011: GBP99,011) of
which GBP48,423 (Six months ended 30 June 2011: GBP49,330. Year
ended 31 December 2011: GBP49,330) was outstanding at the period
end.
10. Events after the reporting date
Other than as set out below there have been no significant
events after the reporting date which in the opinion of the Board
of Directors requires disclosure in the financial statements.
As of 31 July 2012 Threadneedle Asset Management Limited has
been appointed as Investment Manager on the same management and
performance fees as SWIP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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