RIGHTS AND ISSUES INVESTMENT TRUST PLC
HALF YEARLY FINANCIAL REPORT
for the six months ended 30th June
2017
A copy of the Company's Half Yearly Financial Report for the six
months ended 30th June
2017 will shortly be available to view and download from
www.rightsandissues.co.uk. Neither the contents of this
website nor the contents of any website accessible from hyperlinks
on this website (or any other website) is incorporated into or
forms part of this announcement.
Printed copies of the Report will be sent to shareholders
shortly. Additional copies may be obtained from the Corporate
Secretary – Maitland Administration services Limited, Springfield
Lodge, Colchester Road, Chelmsford, Essex CM2 5PW.
INTERIM DIVIDEND
An interim dividend of 10.25p per share has been approved by the
Board and is payable on 29th September
2017 to shareholders on the register as at 1st September 2017 (ex-dividend 31st August 2017).
The following text is copied from the Half Yearly Financial
Report.
CHAIRMAN’S STATEMENT
Markets have made further progress in 2017 with 3.3% rise in FTSE
All-Share Index in the six months. UK Smaller Companies have
performed even better with rises of over 10% in relevant
indices.
The Company has again performed well with the net asset value of
the Income shares increasing by 17.6% to 2353.6p. Total equity was
a new record exceeding £200m for the first time.
The share buy-back programme has continued in the half year with
a further £5.9m of purchases and the issued equity has now been
reduced by 4%.
The interim income dividend is being raised by 2.5% to
10.25p.
The political situation in UK has been complicated by the recent
General Election and the immediate future will remain dominated by
Brexit.
Dr D. M. BRAMWELL
Chairman
28th July 2017
You can view or download copies of the Half Yearly and the
Annual Reports from our website at www.rightsandissues.co.uk.
The Half Yearly Report will be posted to shareholders and copies
are available at the registered office of the Company.
Risks and uncertainties Cautionary statement
This Half Yearly Report contains forward-looking statements that
involve risk and uncertainty. These have been made by the Directors
in good faith based on the information available to them at the
time of their approval of this Report. Due to the inherent
uncertainties, including stock market risk factor, actual results
may differ materially from those expressed or implied by these
forward-looking statements.
There are a number of potential risks and uncertainties which
could have a material impact on the Company’s performance over the
remaining six months of the financial year and could cause actual
results to differ materially from expected and historical results.
The Company’s results continue to be exposed to market price risk.
Further information on the principal long-term risks and
uncertainties of the Company is included in the latest Annual
Report.
STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30th June
2017
|
|
|
Six months ended 30th June 2017 |
|
Six months ended 30th June 2016 |
Notes |
Revenue
£'000 |
Capital
£'000 |
Total
£'000 |
Revenue
£'000 |
Capital
£'000 |
Total
£'000 |
Investment
income |
2 |
1,359 |
– |
1,359 |
1,561 |
– |
1,561 |
Other operating
income |
2 |
1 |
– |
1 |
3 |
– |
3 |
Total income |
|
1,360 |
– |
1,360 |
1,564 |
– |
1,564 |
Gains on fair value
through profit or loss assets |
|
– |
30,968 |
30,968 |
– |
452 |
452 |
Losses on subsidiary
holding |
|
– |
– |
– |
– |
(45) |
(45) |
|
|
1,360 |
30,968 |
32,328 |
1,564 |
407 |
1,971 |
Expenses |
|
|
|
|
|
|
|
Investment management
fee |
|
– |
– |
– |
– |
– |
– |
Other expenses |
|
372 |
45 |
417 |
296 |
– |
296 |
|
|
372 |
45 |
417 |
296 |
– |
296 |
Profit before
tax |
|
988 |
30,923 |
31,911 |
1,268 |
407 |
1,675 |
Tax– |
|
|
– |
– |
– |
– |
– |
Profit for the
period |
|
988 |
30,923 |
31,911 |
1,268 |
407 |
1,675 |
Earnings per
share |
|
|
|
|
|
|
|
Return per
Income |
|
|
|
|
|
|
|
Share |
|
11.2p |
351.0p |
362.2p |
14.1p |
4.5p |
18.6p |
Return per share is calculated using the weighted average number
of Income shares in issue during the period ended 30th June 2017 of 8,810,500 (2016:
9,020,000).
The total column of this statement represents the Statement of
Comprehensive Income, prepared in accordance with International
Financial Reporting Standards as adopted by the EU. 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 are those of the single
entity and derive from continuing operations.
The profit for the period disclosed above represents the
Company’s total Comprehensive Income. The Company does not have any
other Comprehensive Income.
An interim dividend of 10.25p (2016: 10.0p) per share and
amounting to £884,000 (2016: £902,000) is payable on 29th September 2017 to shareholders on the
register as at 1st September 2017
(ex-dividend 31st August 2017).
|
|
|
Year ended 31st December 2016 |
Notes |
Revenue
£'000 |
Capital
£'000 |
Total
£'000 |
Investment
income |
2 |
3,311 |
– |
3,311 |
Other operating
income |
2 |
4 |
– |
4 |
Total income |
|
3,315 |
– |
3,315 |
Gains on fair value
through profit or loss assets |
|
– |
37,774 |
37,774 |
Losses on subsidiary
holding |
|
– |
(68) |
(68) |
|
|
3,315 |
37,706 |
41,021 |
Expenses |
|
|
|
|
Investment management
fee |
|
– |
– |
– |
Other expenses |
|
688 |
7 |
695 |
|
|
688 |
7 |
695 |
Profit before
tax |
|
2,627 |
37,699 |
40,326 |
Tax |
|
– |
– |
– |
Profit for the
period |
|
2,627 |
37,699 |
40,326 |
Earnings per
share |
|
|
|
|
Return per
Income |
|
|
|
|
Share |
|
29.1p |
418.1p |
447.2p |
Return per share is calculated using the weighted average number of
Income shares in issue during the year ended 31st December 2016 of 9,017,874.
The financial information contained in this Half Yearly
Financial Report does not constitute statutory accounts as defined
in Sections 434 – 436 of the Companies Act 2006. The information
for the six months to 30th June 2017
and 30th June 2016 has not been
audited.
The information for the year ended 31st
December 2016 has been extracted from the latest published
audited accounts which have been filed with the Registrar of
Companies. The report of the auditors on those accounts contained
no qualification or statement under Section 498 (2) or (4) of the
Companies Act 2006.
The auditors have reviewed the financial information for the six
months ended 30th June 2017 pursuant
to the Auditing Practices Board guidance on Review of Interim
Financial Information and their report is on page 12.
BALANCE SHEET
as at 30th June 2017
Non-current
assets |
30th
June
2017
£'000 |
30th
June
2016
£'000 |
31st
December
2016
£'000 |
Investments – fair
value through profit or loss |
184,168 |
125,347 |
159,821 |
|
184,168 |
125,347 |
159,821 |
Current
assets |
|
|
|
Trade and other
receivables |
2,182 |
742 |
517 |
Current tax
receivable |
– |
29 |
– |
Amounts due from Group
undertakings |
78 |
140 |
294 |
Cash and cash
equivalents |
17,529 |
16,509 |
19,071 |
|
19,789 |
17,420 |
19,882 |
Total
assets |
203,957 |
142,767 |
179,703 |
Current
liabilities |
|
|
|
Trade and other
payables |
228 |
41 |
200 |
|
228 |
41 |
200 |
Total assets less
current liabilities |
203,729 |
142,726 |
179,503 |
Net assets |
203,729 |
142,726 |
179,503 |
Equity |
|
|
|
Called up share
capital |
2,164 |
2,255 |
2,241 |
Capital redemption
reserve |
91 |
– |
14 |
Retained
reserves: |
|
|
|
Capital reserve |
65,784 |
62,665 |
62,695 |
Revaluation
reserve |
133,496 |
75,290 |
111,580 |
Revenue reserve |
2,194 |
2,516 |
2,973 |
Total
equity |
203,729 |
142,726 |
179,503 |
Net asset value per
share |
|
|
|
Income shares |
2,353.6p |
1,582.3p |
2002.2p |
STATEMENT OF CHANGES IN EQUITY
for the six months ended 30th June
2017
|
Share
capital
£'000 |
Share
premium account
£'000 |
Capital redemption reserve £'000 |
Capital
reserve
£'000 |
Revaluation reserve
£'000 |
Revenue
reserve
£'000 |
Total
£'000 |
For the six months
ended June 2016 |
|
|
|
|
|
|
|
Balance at
31st December 2015 |
1,025 |
225 |
– |
63,709 |
74,883 |
2,827 |
142,669 |
Profit for the
period |
– |
– |
– |
– |
407 |
1,268 |
1,675 |
Total recognised
income and expense |
1,025 |
225 |
– |
63,709 |
75,290 |
4,095 |
144,344 |
Bonus issue of Income
shares |
1,230 |
(225) |
– |
(1,005) |
– |
– |
– |
Cost of bonus
issue |
– |
– |
– |
(39) |
– |
– |
(39) |
Dividends (Note
3) |
– |
– |
– |
– |
– |
(1,579) |
(1,579) |
Balance at
30th June 2016 |
2,255 |
– |
– |
62,665 |
75,290 |
2,516 |
142,726 |
|
Share
capital
£'000 |
Share
premium
account
£'000 |
Capital
redemption
reserve
£'000 |
Capital
reserve
£'000 |
Revaluation
reserve
£'000 |
Revenue
reserve
£'000 |
Total
£'000 |
|
For
the year
ended December 2016 |
|
|
|
|
|
|
|
Balance at
31st December 2015 |
1,025 |
225 |
– |
63,709 |
74,883 |
2,827 |
142,669 |
Profit for the
year |
– |
– |
– |
1,002 |
36,697 |
2,627 |
40,326 |
Total recognised
income and expense |
1,025 |
225 |
– |
64,711 |
111,580 |
5,454 |
182,995 |
Bonus issue of Income
shares |
1,230 |
(225) |
– |
(1,005) |
– |
– |
– |
Cost of bonus
issue |
– |
– |
– |
(73) |
– |
– |
(73) |
Income shares bought
back and cancelled |
(14) |
– |
14 |
(938) |
– |
– |
(938) |
Dividends (Note
3) |
– |
– |
– |
– |
– |
(2,481) |
(2,481) |
Balance at
31 December 2016 |
2,241 |
– |
14 |
62,695 |
111,580 |
2,973 |
179,503 |
|
Share
capital
£'000 |
Share
Premium
Account
£’000 |
Capital redemption reserve £'000 |
Capital
reserve
£'000 |
Revaluation reserve
£'000 |
Revenue
reserve
£'000 |
Total
£'000 |
For
the six months ended June 2017 |
|
|
|
|
|
|
|
Balance at
31st December 2016 |
2,241 |
– |
14 |
62,695 |
111,580 |
2,973 |
179,503 |
Profit for the
period |
– |
– |
– |
9,007 |
21,916 |
988 |
31,911 |
Total recognised
income and expense |
2,241 |
– |
14 |
71,702 |
133,496 |
3,961 |
211,414 |
Income shares bought
back and cancelled |
(77) |
– |
77 |
(5,918) |
– |
– |
(5,918) |
Dividends (Note
3) |
– |
– |
– |
– |
– |
(1,767) |
(1,767) |
Balance at
30th June 2017 |
2,164 |
– |
91 |
65,784 |
133,496 |
2,194 |
203,729 |
STATEMENT OF CASH FLOWS
for the six months ended 30th June
2017
Cashflows from
operating activities |
30
June
2017
£'000 |
30
June
2016
£'000 |
31
December
2016
£'000 |
Profit before tax |
31,911 |
1,675 |
40,326 |
Adjustments for: |
|
|
|
Gains on
investments |
(30,968) |
(452) |
(37,774) |
Losses on revaluation
of subsidiary |
– |
45 |
68 |
Purchases of
investments |
(7,226) |
(1,684) |
(2,721) |
Proceeds on disposal
of investments |
12,199 |
– |
3,862 |
Operating cash flows
before movements in working capital |
5,916 |
(416) |
3,761 |
Decrease/(increase) in
receivables |
198 |
(330) |
(230) |
(Decrease)/increase in
payables |
(33) |
(36) |
123 |
Net cash from
operating activities before income taxes |
6,081 |
(782) |
3,654 |
Income taxes
received |
– |
– |
– |
Net cash from
operating activities |
6,081 |
(782) |
3,654 |
Cashflows from
financing activities |
|
|
|
Expenses from bonus
issue |
– |
(39) |
(73) |
Income shares bought
back and cancelled |
(5,856) |
– |
(938) |
Dividends paid |
(1,767) |
(1,579) |
(2,481) |
Net cash used in
financing activities |
(7,623) |
(1,618) |
(3,492) |
Net
(decrease)/increase in cash and cash equivalents |
(1,542) |
(2,400) |
162 |
Cash and cash
equivalents at beginning of period |
19,071 |
18,909 |
18,909 |
Cash and cash
equivalents at end of period |
17,529 |
16,509 |
19,071 |
NOTES TO THE HALF YEARLY FINANCIAL REPORT
for the six months ended 30th June
2017
1. Accounting
Standards
The condensed interim financial report has been prepared in
accordance with International Financial Reporting Standards
(IFRSs), including IAS 34 “Interim financial reporting” as adopted
by the European Union. The same accounting policies and methods of
computation are followed in the interim financial report as those
used in the Company’s latest published annual financial
statements.
2.
Income |
|
|
|
|
30
June |
30
June |
31
December |
|
2017 |
2016 |
2016 |
|
£'000 |
£'000 |
£'000 |
Total income
comprises: |
|
|
|
Dividends |
1,359 |
1,561 |
3,311 |
Interest |
1 |
3 |
4 |
Total
income |
1,360 |
1,564 |
3,315 |
3.
Dividends |
|
|
|
Amounts
recognised as distributions to equity holders in the year:
Income (Paid)
Interim dividend for the year ended 31 December 2016 |
30
June
2017
£'000 |
30
June
2016
£'000 |
31
December
2016
£'000 |
of 10.0p per
share |
– |
– |
902 |
Final dividend for the
year ended 31 December 2016 of 20.0p per share (year ended 31
December 2015: 25.5p) |
1,767 |
627 |
627 |
Special dividend for
the year ended 31 December 2016 of 22.5p per share (year ended 31
December 2015: nil) |
– |
553 |
553 |
Capital
(Paid) |
|
|
|
Final dividend for the
year ended 31 December 2016 of nil p per share (year ended 31
December 2015: 1.8p) |
– |
30 |
30 |
Special dividend for
the year ended 31 December 2016 of 22.5p per share (year ended 31
December 2015: nil) |
– |
369 |
369 |
|
1,767 |
1,579 |
2,481 |
|
30 June |
|
2017 |
|
£'000 |
Income |
|
Proposed interim dividend of 10.25p
per share |
884 |
|
884 |
This proposed interim dividend was approved by the Board on
28th July 2017 and has not been
included as a liability at 30th June
2017.
4. Valuation of financial
instruments
IFRS 13 requires the Company to classify fair value measurements
using a fair value hierarchy that reflects the significance of
inputs used in making the measurements. The valuation techniques
used by the Company are explained in the accounting policies note 1
Investments, as set out in the Company’s Annual Report and
Financial Statements for the year ended 31st
December 2016.
The fair value hierarchy has the following levels:
Level 1 – Unadjusted prices quoted in active markets for identical
assets and liabilities.
Level 2 – Having inputs other than quoted prices included within
Level 1 that are observable for the asset or
liability, either directly (ie as prices) or indirectly (ie derived
from prices).
Level 3 – Having inputs for the asset or liability that are not
based on observable data.
30 June
2017 |
Level
1 |
Level
2 |
Level
3 |
Total |
|
£000 |
£000 |
£000 |
£000 |
Financial assets at
fair value through profit or loss |
|
|
|
|
UK Equity
Listed |
135,979 |
– |
– |
135,979 |
AIM trades
stocks |
47,634 |
– |
– |
47,634 |
Investment in
subsidiary |
– |
– |
555 |
555 |
Net fair
value |
183,613 |
– |
555 |
184,168 |
30 June 2016 |
Level
1 |
Level
2 |
Level
3 |
Total |
|
£000 |
£000 |
£000 |
£000 |
Financial assets at
fair value through profit or loss |
|
|
|
|
UK Equity Listed |
92,239 |
– |
– |
92,239 |
AIM trades stocks |
32,530 |
– |
– |
32,530 |
Investment in
subsidiary |
– |
– |
578 |
578 |
Net fair value |
124,769 |
– |
578 |
125,347 |
31 December 2016 |
Level
1 |
Level
2 |
Level
3 |
Total |
Financial assets at
fair value through profit or loss |
£000 |
£000 |
£000 |
£000 |
UK Equity Listed |
118,452 |
– |
– |
118,452 |
AIM trades stocks |
40,814 |
– |
– |
40,814 |
Investment in
subsidiary |
- |
– |
555 |
555 |
Net fair value |
159,266 |
– |
555 |
159,821 |
There were no transfers between Level 1 and Level 2 during the
period.
A reconciliation of fair value measurements in Level 3 is set
out in the following table.
|
30
June
2017
£'000 |
30
June
2016
£'000 |
31
December
2016
£'000 |
Opening Balance |
555 |
623 |
623 |
Purchases |
– |
– |
– |
Sales |
– |
– |
– |
Total gains or losses
included in gains on investments in the Income Statement: |
|
|
|
– on assets sold |
– |
– |
– |
– on assets held at
period end |
– |
(45) |
(68) |
Closing
Balance |
555 |
578 |
555 |
The Level 3 investment relates to the Company’s subsidiary,
Discretionary Unit Fund Managers Limited which has been valued
based on the most recent estimated NAV.
5.
Related Party Transactions
Under IFRS, the Directors have been identified as related parties.
Their fees and interests for the year nded 31st December 2016 have been disclosed in the
Directors’ Annual Remuneration Report within the 2016 Annual Report
and Financial Statements.
During the period the Company had the following transactions
with Discretionary Unit Fund Managers Limited, its subsidiary
undertaking:
|
30 June |
30 June |
31 December |
|
2017 |
2016 |
2016 |
|
£'000 |
£'000 |
£'000 |
Dividends received |
– |
– |
125 |
|
– |
– |
125 |
Amounts owed by subsidiary
undertaking |
79 |
140 |
294 |
6. Going
Concern
The Company's assets comprise mainly realisable equity
securities and cash and the value of its assets is greater than its
liabilities. Additionally, after reviewing the Company's budget
including the current financial resources and projected expenses
for the next twelve months and its medium-term plans, the Directors
believe that the Company's resources are adequate for continuing in
business for the foreseeable future. Accordingly it is appropriate
to continue to prepare accounts on a going concern basis.
DIRECTORS’ STATEMENT OF RESPONSIBILITY FOR THE HALF YEARLY
FINANCIAL REPORT
The Directors are responsible for preparing the Half Yearly
financial report in accordance with applicable law and
regulations.
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements has been prepared in
accordance with IAS 34 “Interim financial reporting”; and
- the Half Yearly management report includes a fair review of the
information required by DTR 4.2.7R and 4.2.8R.
This report was approved on 28th July
2017.
Dr D. M. BRAMWELL
Chairman
PORTFOLIO STATEMENT
Details of the twenty largest investments as at 30th June 2017 are given below by the market
value:
UK
Investments |
|
Holdings |
|
Market
Value |
30
June 2017 |
31
December 2016 |
30
June 2017
£’000 |
31
December 2016
£’000 |
Scapa Group |
6,650,000 |
8,000,000 |
31,455 |
26,800 |
Treatt |
5,775,000 |
5,775,000 |
27,056 |
14,437 |
Hill & Smith
Holdings |
1,434,230 |
1,434,230 |
19,792 |
17,182 |
RPC Group |
2,400,000 |
2,259,672 |
18,036 |
24,043 |
Vp |
1,800,000 |
1,800,000 |
15,480 |
13,410 |
Colefax Group |
2,436,979 |
2,050,000 |
11,697 |
10,455 |
Macfarlane Group |
16,741,368 |
16,741,368 |
9,961 |
10,045 |
Electrocomponents |
1,300,000 |
1,300,000 |
7,495 |
6,196 |
Spirax-Sarco
Engineering |
120,714 |
120,714 |
6,452 |
5,051 |
Menzies (John) |
882,142 |
882,142 |
6,215 |
5,205 |
Renold |
11,000,000 |
9,425,207 |
5,775 |
4,124 |
Low & Bonar |
6,000,000 |
4,440,000 |
5,100 |
2,842 |
Vitec Group |
400,000 |
400,000 |
4,044 |
2,572 |
Dialight |
238,095 |
238,095 |
2,614 |
1,881 |
Elecosoft |
4,520,781 |
4,520,781 |
2,034 |
1,311 |
Titon Holdings |
1,265,000 |
1,265,000 |
1,986 |
1,391 |
Castings |
400,000 |
400,000 |
1,800 |
1,644 |
National Grid |
137,500 |
150,000 |
1,308 |
1,425 |
Chamberlin |
1,000,000 |
1,000,000 |
1,300 |
730 |
GlaxoSmithKline |
70,000 |
70,000 |
1,144 |
1,092 |
|
|
|
180,744 |
151,836 |
Balance held in other
investments |
|
|
3,424 |
7,985 |
|
|
|
184,168 |
159,821 |
Unless otherwise specified, the actual holdings as at
30th June 2017 are, in each case, of
ordinary shares or stock units and of the nominal value for which
listing has been granted.
INDEPENDENT REVIEW REPORT TO RIGHTS AND ISSUES INVESTMENT TRUST
PLC
INTRODUCTION
We have been engaged by the Company to review the financial
statements in the Half Yearly Financial Report for the six months
ended 30th June 2017 which comprises
the Statement of Comprehensive Income, the Balance Sheet, the
Statement of Changes in Equity, the Statement of Cash Flows and the
related explanatory notes 1 to 6. We have read the other
information contained in the Half Yearly Report and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
The report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410 issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
DIRECTORS’ RESPONSIBILITIES
The Half Yearly Financial Report is the responsibility of, and has
been approved by, the Directors. The Directors are responsible for
preparing the Half Yearly Financial Report in accordance with the
Disclosure and Transparency Rules of the United Kingdom’s Financial
Conduct Authority.
As disclosed in note 1, the Annual Financial Statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The financial statements included in this Half
Yearly Financial Report have been prepared in accordance with
International Accounting Standard 34 “Interim Financial Reporting”
as adopted by the European Union.
OUR RESPONSIBILITY
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the Half Yearly Financial
Report based on our review.
SCOPE OF REVIEW
We conducted our review in accordance with International Standard
on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial
Information Performed by the Independent Auditor of the Entity”
issued by the Auditing Practices Board for use in the United Kingdom. A review of interim
information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than in an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not enable us
to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly we do not
express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that causes
us to believe that the financial statements in the Half Yearly
Financial Report for the six months ended 30th June 2017 are not prepared, in all material
respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom’s Financial Conduct
Authority.
COLIN WAIN
For and on behalf of Begbies
Chartered Accountants
9 Bonhill Street
London
EC2A 4DJ
28th July 2017
END.