Interim Results
30 April 2003 - 5:01PM
UK Regulatory
RNS Number:5319K
F&C Capital & Income Inv Tst PLC
30 April 2003
Date: 30 April 2003
Contact: Julian Cane
F&C Management Ltd 020 7628 8000
Emma Chilvers
Lansons Communications 020 7294 3606
F&C CAPITAL AND INCOME INVESTMENT TRUST PLC
(formerly F&C PEP and ISA Investment Trust PLC)
Unaudited Preliminary Statement of Results for the six months to 31 March 2003
Company Objective
To secure long-term capital and income growth from a portfolio consisting mainly
of FTSE All-Share companies and leading European companies.
Highlights
* Interim dividend increases by 2.5% to 2.05 pence per share.
* Over the last 5 years, net asset total return per share of -17.8% is
considerably better than the total return of -26.2% from the FTSE All-Share
Index.
* At the AGM earlier in the year, those voting decided:
* not to liquidate the Company,
* to change the name to F&C Capital and Income Investment Trust,
* that the share buy-back programme should continue. This has meant that
the Company's shares did not stand at any material discount to net asset
value over the last six months.
SUMMARY OF UNAUDITED RESULTS
31 March 30 Sept %
2003 2002 change
Net assets #66.36m #70.06m -5.3
Net asset value per share 133.31p 140.96p -5.4
Share price 133.00p 135.50p -1.8
6 months to 31 6 months to 31 %
March 2003 March 2002 change
Earnings per ordinary share 1.91p 2.11p -9.5
Dividend per ordinary share 2.05p 2.00p +2.5
F&C CAPITAL AND INCOME INVESTMENT TRUST PLC
Unaudited Interim Statement of Results for the six months to 31 March 2003
Chairman's Statement,
Stock markets have continued to be difficult during the six months under review
from 30 September 2002 to 31 March 2003 as the FTSE All-Share index fell 3.7%.
Your Company had mixed results against this benchmark as the net asset value per
share fell by 5.4% while the share price declined by 1.8%. The interim dividend
is increased by 2.5% to 2.05 pence per share.
Capital Performance
Share prices have been very volatile during the period, with gyrations being
caused by the situation in Iraq, economic and company specific news. After steep
and prolonged falls in stock markets since their peaks in 2000, there was a
strong rally during October and November of last year, partly as valuations
looked more attractive, and partly as it seemed as if conflict in Iraq could be
avoided. The shares that rose fastest were in general those that had performed
worst as markets had fallen. Between the end of September and the end of
December, the Telecommunication Services and Software sectors rose 30% and 28%
respectively, while some more defensive sectors, such as Beverages, Food, Retail
and Tobacco actually fell. Due to the positioning of the portfolio, this was
negative for performance. During the second quarter from January to March, the
stock market returned to its previous trend, with the FTSE All-Share declining
by 8.3%; your Company's net asset value per share fell in line with this. It
should be remembered that although the cautious structure of the portfolio
resulted in performance lagging the index over six months, it has brought about
substantially better performance than the index over the longer term. Over the
last five years, net asset total return per share (including gross dividends) of
-17.8%, whilst disappointing, is nonetheless considerably better than the total
return of -26.2% from the FTSE All-Share index (Source: Datastream).
Dividend
As a result of difficult economic and business conditions, many companies are
finding it hard to maintain or grow profits. This in turn has led many companies
to cut their dividends, with the consequence that the underlying implied
dividend on the FTSE All-Share index has fallen by 1.3%. The 2.5% increase in
the interim dividend compares favourably against this background. Although there
has been a fall in revenue and earnings during the first half, mainly due to the
timing of dividend payments, internal estimates indicate that both revenue and
earnings will show a modest increase for the full year. The dividend increase
builds on the Company's record of steady progression over the last ten years.
Discount to Net Asset Value and Share Buy-Backs
Following the commitment given to shareholders in September last year, the share
buy-back programme has continued to ensure that the Company's shares do not
stand at any material discount to net asset value. Over the half-year, 640,000
shares were purchased at an average discount to asset value (including
accumulated income) of almost 3.7%. The average discount over the period was
only 1.8%. The share price stood at a premium to net asset value for some
periods and in order to meet demand for the shares, 718,000 new shares were
issued. These were issued at a sufficient premium to net asset value to ensure
that existing shareholders were not diluted. By having the ability to issue
shares at a premium, and purchase when at a discount, the Board has been able to
keep the share price trading fairly closely in line with the underlying net
asset value.
The Company's shares were trading on 30 September 2002 at a discount to net
asset value of 3.9%, and this had narrowed to a discount of 0.2% at 31 March
2003. The result of this was that the share price declined less than the net
asset value.
F&C CAPITAL AND INCOME INVESTMENT TRUST PLC
Unaudited Interim Statement of Results for the six months to 31 March 2003
Results of the AGM
At the Company's AGM held earlier this year, there were a number of important
votes. The most important was that 97.5% of those voting decided not to
liquidate the Company, and as a result it will continue in its current form.
Shareholders also voted to change the name of the Company to F&C Capital and
Income Investment Trust and to allow the share buy-back programme to continue.
These decisions should be beneficial in helping to attract new shareholders and
in ensuring the share price does not trade at any material discount to net asset
value.
Outlook
The military campaign in Iraq appears to be all but over and this is clearly
positive as it will help to lift some short-term uncertainty. It does, however,
mean that attention is likely to switch back to the economic and business
fundamentals and these have continued to deteriorate. It is difficult at the
moment to separate the indirect effects of the war on the economy through
consumer and business confidence, and the slowdown caused by other reasons.
Regardless of the cause, weakening economies in the UK and elsewhere will be
adverse for most companies, particularly at a time when company profitability is
at its lowest for nine years. On the more positive side, the sharp falls that
stock markets have experienced in recent years, have led valuations to be more
attractive than for many years, so share prices are already discounting a
considerable amount of uncertainty and difficulty. Many companies' dividend
yields, for example, are now greater than bank base rates and government bond
yields, and this has historically provided very good support for equities.
Graham Ross Russell
April 2003
F&C CAPITAL AND INCOME INVESTMENT TRUST PLC
Unaudited Interim Statement of Results for the six months to 31 March 2003
Unaudited Statement of Total Return (incorporating the Revenue Account*)
6 months to 31 March 2003 6 months to 31 March 2002
Revenue Capital Total Revenue Capital Total
#'000s #'000s #'000s #'000s #'000s #'000s
Gains and losses on - (3,639) (3,639) - 10,402 10,402
investments
Exchange gains and losses on (4) 11 7 4 (4) -
currency balances
Income 1,156 - 1,156 1,261 - 1,261
Management fee (82) (82) (164) (112) (112) (224)
Other expenses (115) (4) (119) (89) (3) (92)
Net return before finance costs and 955 (3,714) (2,759) 1,064 10,283 11,347
taxation
Interest payable and similar (4) (4) (8) (2) (2) (4)
charges
Return on ordinary 951 (3,718) (2,767) 1,062 10,281 11,343
activities before taxation
Taxation on ordinary activities (5) - (5) (5) - (5)
Return attributable to equity 946 (3,718) (2,772) 1,057 10,281 11,338
shareholders
Dividends on ordinary shares (equity) (1,011) - (1,011) (986) - (986)
Amount transferred (from)/to (65) (3,718) (3,783) 71 10,281 10,352
reserves
Return per ordinary share - 1.91 (7.51) (5.60) 2.11 20.53 22.64
pence
* The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
activities.
F&C CAPITAL AND INCOME INVESTMENT TRUST PLC
Unaudited Interim Statement of Results for the six months to 31 March 2003
Unaudited Balance Sheet
31 March 2003 31 March 2002 30 Sept 2002
#'000s #'000s #'000s
Fixed assets
Investments 68,366 97,966 70,419
Current assets
Debtors 509 607 492
Taxation recoverable 14 16 19
Cash at bank and short-term 124 255 917
deposits
647 878 1,428
Current liabilities
Creditors: amounts falling due
within one year:
Short-term loans (1,500) - -
Other creditors (1,153) (1,238) (1,786)
(2,653) (1,238) (1,786)
Net current liabilities (2,006) (360) (358)
Net assets 66,360 97,606 70,061
Capital and reserves
Called up equity share capital 12,445 12,425 12,425
Capital redemption reserve 2,492 2,332 2,332
Share premium 17,190 16,394 16,394
Special reserve 17,810 18,705 18,704
Capital reserves 15,473 46,523 19,191
Revenue reserve 950 1,227 1,015
Total shareholders' funds 66,360 97,606 70,061
Net asset value per ordinary
share - pence 133.31 196.39 140.96
Geographical distribution of the investments at 31 March 2003 was:
UK 91%
Europe 9%
F&C CAPITAL AND INCOME INVESTMENT TRUST PLC
Unaudited Interim Statement of Results for the six months to 31 March 2003
Unaudited Cash Flow Statement
6 months to 6 months to
31 March 2003 31 March 2002
#'000s #'000s
Net cash inflow from operating
activities 841 983
Interest paid (7) (4)
Total tax paid (1) (4)
Equity dividends paid (1,606) (1,578)
Net cash (outflow)/inflow from
purchases and sales of investments (1,523) 52
Net cash outflow before use of
liquid resources and financing (2,296) (551)
Decrease in short-term deposits 600 400
Net cash inflow from financing 1,496 79
Decrease in cash during the period (200) (72)
The interim financial statements have been prepared on the basis of the
accounting policies set out in the Company's financial statements at 30
September 2002.
The Directors have declared an interim dividend of 2.05p (2002: 2.00p) per share
payable on 30 May 2003 to shareholders registered on 9 May 2003.
The Interim Report will be posted to shareholders in mid-May 2003. Copies may be
obtained during normal business hours from the Company's Registered Office,
Exchange House, Primrose Street, London EC2A 2NY.
By order of the Board
F&C Management Limited - Secretary
29 April 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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