WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
6 MONTHS ENDED 5th OCTOBER, 2009
CHAIRMAN'S INTERIM STATEMENT
Dear Shareholder,
The results for the half year ended 5th October, 2009 show a considerable
improvement over the comparable period last year reflecting the general increase
in equity markets since the year end. Basic net asset value per ordinary share
as at 5th October, 2009 stands at 334.4p compared with 266.0p as at 5 April,
2009. This improvement of 25.7% compares to a rise of 25.8% in the FT All Shares
Index.
The revenue results for the half year to 5th October, 2009 were virtually the
same as for the comparable period in 2008. Although there has been a reduction
in income of £10,000 this has been offset by a similar reduction in expenses.
The movement in the capital results (from a loss of £1,437,000 for the six month
period to 5th October, 2008 to a profit of £958,000 in the period under review)
is attributable to a general increase in equity values for all the quoted
investments in the portfolio but, in particular, to SpaceandPeople which
increased in value by £337,000 and British American Tobacco which increased by
£112,000.
As a result, basic earnings per share are 74.5p per share compared with a loss
of 102.7p in the six months ended 5th October, 2008.
Between 5th October, 2009 and 23rd November, 2009 the value of the investment
portfolio has increased by 0.5% compared with an increase in the FTSE All Share
Index over the same period of 6.0%.
As in previous years the Board is proposing no interim dividend.
Shareholders may have read the Stock Exchange announcement on 6th November, 2009
that three holders representing 62.1% of the Ordinary shares; namely Gresham
House plc, G V L Oury and associates and F M Earley and Mrs R Chopin-John (as
Trustees of the Rowe Trust) have called for the liquidation of the company and
for the return of capital to shareholders as soon as possible. This
announcement can also be seen on the company's web site (www.welshindustrial.com).
As a result the Board is already implementing a short-term realisation policy
towards achieving this objective.
A circular will be sent to shareholders at the appropriate time convening a
General Meeting of the Company to vote on the liquidation of the Company, a
resolution which will require a majority of 75% of those voting at the meeting.
Shareholders should be aware that, if the requisite majority does not vote in
favour of the resolution, the Board will have to reconsider its investment
policy with the major shareholders in the light of that decision.
A P Stirling
Chairman
2nd December, 2009
WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 5th OCTOBER, 2009
Six months to Six months to Year ended
5 October, 2009 5 October, 2008 5 April, 2009
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Income:
Dividend and
interest income 81 - 81 97 - 97 179 - 179
Other operating
income 7 - 7 1 - 1 18 - 18
---- ---- ---- ----- ----- ----- ---- ---- ----
Total Revenue 88 - 88 98 - 98 197 - 197
Gain/(Loss)
on investments
held at fair
value - 958 958 - (1,437)(1,437) - (2,633)(2,633)
---- ---- ---- ----- ----- ----- ---- ----- -----
Total income
and gains/
(losses) on
investments 88 958 1,046 98 (1,437)(1,339) 197 (2,633)(2,436)
---- ---- ----- ----- ----- ----- ---- ----- -----
Expenses
Operating
Expenses (38) - (38) (46) - (46) (86) - (86)
Finance costs (2) - (2) (2) - (2) (4) - (4)
----- ----- ---- ----- ----- ----- ----- ----- -----
(40) - (40) (48) - (48) (90) - (90)
----- ----- ---- ----- ----- ----- ----- ----- -----
Profit/(loss)
before taxation 48 958 1,006 50 (1,437)(1,387) 107 (2,633)(2,526)
Taxation - - - - - - - - -
----- ----- ----- ----- ----- ----- ----- ----- -----
Profit/(loss)
For the period 48 958 1,006 50 (1,437)(1,387) 107 (2,633)(2,526)
===== ===== ===== ===== ===== ===== ===== ===== =====
Basic & diluted Earnings
Per Ordinary share (note 9) 74.5p (102.7)p (187.1)p
==== ===== =====
The total column of this statement represents the Group's Income Statement,
prepared in accordance with IFRS.
The revenue and capital columns are supplementary to this and are prepared under
guidance published by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
The profit/(loss) for the period is attributable to equity shareholders of the
Parent Company.
WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 5th OCTOBER, 2009
Half year ended 5 October, 2009
Ordinary
share Capital Retained
capital reserve Earnings Total
£'000 £'000 £'000 £'000
Balance at 5 April, 2009 67 3,132 391 3,590
Total comprehensive income
for the period - 958 48 1,006
Ordinary dividend paid (Note 8) - - (81) (81)
------- ------- ------- -------
Balance at 5 October, 2009 67 4,090 358 4,515
======= ======= ======= =======
Half year ended 5 October, 2008
Ordinary
share Capital Retained
capital reserve Earnings Total
£'000 £'000 £'000 £'000
Balance at 5 April, 2008 67 5,765 402 6,234
Total comprehensive income/(loss)
for the period - (1,437) 50 (1,387)
Ordinary dividend paid (Note 8) - - (118) (118)
------- ------- ------- -------
Balance at 5 October, 2008 67 4,328 334 4,729
======= ======= ======= =======
Year ended 5 April, 2009
Ordinary
share Capital Retained
capital reserve Earnings Total
£'000 £'000 £'000 £'000
Balance at 5 April, 2008 67 5,765 402 6,234
Total comprehensive income/(loss)
for the period - (2,633) 107 (2,526)
Ordinary dividend paid (Note 8) - - (118) (118)
------- ------- ------- -------
Balance at 5 April, 2009 67 3,132 391 3,590
======= ======= ======= =======
WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 5th OCTOBER, 2009
5 October 5 October 5 April
2009 2008 2009
Assets £'000 £'000 £'000
Non current assets
Financial assets 4,070 4,132 2,936
------- ------- -------
Total non current assets 4,070 4,132 2,936
------- ------- -------
Current assets
Accrued income and prepaid expenses 25 20 15
Other current assets 5 2 1
Cash 495 661 723
------- ------- -------
Total current assets 525 683 739
------- ------- -------
Total assets 4,595 4,815 3,675
------- ------- -------
Current liabilities
Trade and other payables (35) (41) (40)
------- ------- -------
Total current liabilities (35) (41) (40)
------- ------- -------
Total assets less current liabilities 4,560 4,774 3,635
Non current liabilities
8.75% Cumulative Preference shares (45) (45) (45)
------- ------- -------
Net assets 4,515 4,729 3,590
======= ======= =======
Capital and reserves
Ordinary share capital (note 10) 67 67 67
Capital reserve 4,090 4,328 3,132
Retained earnings 358 334 391
------- ------- -------
Total equity attributable to equity
Holders of the parent 4,515 4,729 3,590
======= ======= =======
Basic & diluted net asset value
per ordinary share (note 11) 334.4p 350.3p 266.0p
======= ======= =======
WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
UNAUDITED CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 5th OCTOBER, 2009
Half Half
year ended year ended Year ended
5 October 5 October 5 April
2009 2008 2009
£'000 £'000 £'000
Cashflow from operating activities
Investment income received 80 94 162
Deposit interest received 1 3 17
Share dealing loss 3 (1) 14
Other income - - 1
Other operating expenses (54) (54) (88)
------- ------- -------
Net cash flows from operating activities 30 42 106
------- ------- -------
Cash flows from investing activities
Purchase of investments (213) (412) (491)
Sale of investments 36 271 352
------- ------- -------
(177) (141) (139)
------- ------- -------
Cash flows from financing activities
Preference dividends paid - - (4)
Equity dividends paid (81) (118) (118)
------- ------- -------
(81) (118) (122)
------- ------- -------
Decrease in cash and cash equivalents (228) (217) (155)
Cash and cash equivalents at start of period 723 878 878
------- ------- -------
Cash and cash equivalents at end of period 495 661 723
======= ======= =======
WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE UNAUDITED CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
The Directors confirm that, to the best of their knowledge:
(a) the unaudited consolidated interim financial statements, which have been
prepared in accordance with the applicable set of accounting standards, gives a
true and fair view of the assets, liabilities, financial position and profit or
loss of the Group;
(b) the Chairman's interim statement and management report includes a fair
review of the information required by:
(i)DTR 4.2.7R of the Disclosure and Transparency Rule, being an indication of
important events that have occurred during the first six months of the financial
year and their impact on the unaudited consolidated financial statements; and a
description of the principal risks and uncertainties for the remaining six
months of the year; and
(ii)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.
PRINCIPAL RISKS, MANAGEMENT AND REGULATORY ENVIRONMENT
The Directors believe that the principal risks and uncertainties of the Group
remain unchanged from those as set out in the Report and Financial Statements
for the year ended 5th April, 2009 ("Annual Report"). The principal risks of the
Group relate to its investment activities in securities and include market price
risk, liquidity risk, interest rate risk and credit risk.
Further details can be found on pages 2 and 3 (Investment Policy) and in note 17
(Financial Instruments) of the Annual Report.
A P Stirling
Chairman
WELSH INDUSTRIAL INVESTMENT TRUST PLC
INTERIM RESULTS
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 REPORTING ENTITY
Welsh Industrial Investment Trust plc ("the Company") is a company incorporated
in England. The unaudited consolidated interim financial statements of the
Company as at and for the six months ended 5th October, 2009 comprise the
Company and its subsidiary undertakings (together referred to as the "Group").
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
2 STATEMENT OF COMPLIANCE
These unaudited consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim
Financial Reporting. They do not constitute statutory accounts within the
meaning of section 435 of the Companies Act 2006. The Group has adopted IAS 1
(Revised) Presentation of Financial Statements for the first time in these
interim financial statements.
The unaudited consolidated interim financial statements should be read in
conjunction with the consolidated financial statements of the Group and Company
as at and for the year ended 5th April, 2009 which were prepared in accordance
with IFRS as adopted by the European Union and those parts of the Companies Act
2006 applicable to companies reporting under IFRS, and have been reported on by
the Company's auditors.
The unaudited consolidated interim financial statements were approved by a duly
appointed and authorised committee of the Board of Directors on 2nd December,
2009. The financial information for the half years ended 5th October, 2009 and
5th October, 2008 has not been audited and the auditors have not reported on or
reviewed these interim financial statements. The information for the year ended
5th April, 2009 has been extracted from the latest published audited financial
statements. The auditors' report was unqualified, did not include references to
any matters to which the auditors drew attention by way of emphasis without
qualifying their report and did not contain a statement under section 498(2) or
(3) of the Companies Act 2006.
3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Group in these unaudited consolidated
interim financial statements are the same as those applied by the Group in its
consolidated financial statements as at and for the year ended 5th April, 2009,
and which are expected to be applied for the year ended 5th April, 2010.
Where presentational guidance set out in the Statement of Recommended Practice
("the SORP") for investment trusts issued by the Association of Investment
Companies ("the AIC") is consistent with the requirements of IFRS and
appropriate in the context of the Company's activities, the directors have
sought to prepare the financial statements on a basis compliant with the
recommendations of the SORP.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the unaudited consolidated interim financial statements
requires the use of estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these unaudited consolidated interim financial statements, the
significant judgements made by management were the same as those that applied to
the consolidated financial statements as at and for the year ended 5th April,
2009.
5 PRINCIPAL RISKS
The principal risks of the Group are consistent with those disclosed in the
consolidated financial statements as at and for the year ended 5th April, 2009.
6 INCOME
Half Half
year ended year ended Year ended
5 October 5 October 5 April
2009 2008 2009
Income from investments £'000 £'000 £'000
Dividend income (UK Listed) 62 74 127
Other UK investment income 18 20 35
Interest receivable: bank and brokers 1 3 17
----- ----- -----
81 97 179
----- ----- -----
Other operating income
Share dealing profit 3 4 22
Unrealised gains/(losses) on trading
securities held in subsidiary 4 (3) (5)
Other - - 1
----- ----- -----
7 1 18
----- ----- -----
Total income 88 98 197
===== ===== =====
Total income comprises:
Dividends 62 74 127
Interest 19 23 52
Other income 7 1 18
----- ----- -----
88 98 197
===== ===== =====
7 FINANCE COSTS
Half Half
year ended year ended Year ended
5 October 5 October 5 April
2009 2008 2009
£'000 £'000 £'000
Dividends on non equity shares:-
8.75% cumulative preference 2 2 4
----- ----- -----
2 2 4
===== ===== =====
8 DIVIDENDS
Half Half
year ended year ended Year ended
5 October 5 October 5 April
2009 2008 2009
£'000 £'000 £'000
Amounts recognised as distributions to
equity holders in the period:
Final dividend for the year ended 5th April,
2009 of 6p (2008: 8.75p) per share 81 118 118
------- ------- -------
81 118 118
======= ======= =======
9 EARNINGS/(LOSS) PER ORDINARY SHARE
Basic and diluted earnings/(loss) per ordinary share is based on the net profit
for the half year of £1,006,000 (half year ended 5th October, 2008: net loss
£1,387,000, year ended 5th April, 2009: net loss £2,526,000) and on 1,350,000
ordinary shares being the weighted average number of ordinary shares in issue
during the period.
The earnings/(loss) per ordinary share figures detailed above can be further
analysed between revenue and capital as follows:-
Half Half
year ended year ended Year ended
5 October 5 October 5 April
2009 2008 2009
£'000 £'000 £'000
Net revenue profit attributable to equity
holders of the parent 48 50 107
Net capital profit/(loss) attributable to
equity holders of the parent 958 (1,437) (2,633)
----- ----- -----
Net total profit/(loss) 1,006 (1,387) (2,526)
===== ===== =====
The weighted average number of ordinary shares in issue during the period was
1,350,000
Basic and diluted earnings/(loss) per share Pence Pence Pence
Revenue 3.6 3.7 8.0
Capital 70.9 (106.4) (195.1)
------- ------- -------
Total basic and diluted
earnings/(loss)per share 74.5 (102.7) (187.1)
======= ======= =======
There are no potentially dilutive shares in issue
10 SHARE CAPITAL
(i) Ordinary
1,350,000 ordinary shares were in issue throughout the periods covered in this
statement.
(ii) Preference
In addition there were in issue 225,000 8.75% cumulative preference shares of
20p each. The preference dividend is payable in one instalment on 5th April
every year, and is deemed to accrue evenly from day to day. The voting rights of
the preference shareholders are restricted to resolutions to winding up the
company, or to vary the special rights attached to the preference shares, in
which event each shareholder is entitled to one vote. Upon the winding up of the
company the preference shareholders rank first in the return of capital, being
however restricted to the nominal amount paid up, together with any arrears of
the preference dividend.
11 NET ASSET VALUE PER ORDINARY SHARE
Basic and diluted net asset value per ordinary share is based on Equity
attributable to equity shareholders of £4,515,000 (half year ended 5th October,
2008: £4,729,000; year ended 5th April, 2008: £3,590,000) and on 1,350,000
ordinary shares, being the number of ordinary shares in issue at each period
end.
12 INVESTMENTS - SECURITIES
As at 5 October 2009 the Company's ten largest investments were:-
Market Value % of invested
£'000s portfolio
UK Listed Securities
Anglo Pacific Group plc 197 4.85
British American Tobacco plc 581 14.28
Devro plc 259 6.35
Lloyds TSB plc 13% perp 101 2.48
London & Associated Properties plc 132 3.24
National Grid plc 184 4.52
Treasury Stock 6.25% 2010 197 4.83
Securities dealt in under AIM
Sinclair (William) Holdings plc 146 3.59
SpaceandPeople plc 877 21.56
Unlisted Securities
Wheelsure Holdings plc 9% loan stock 116 2.85
----- -----
2,790 68.55
===== =====
13 RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS
Half Half
year ended year ended Year ended
5 October 5 October 5 April
2009 2008 2009
£'000 £'000 £'000
Revenue return before taxation 48 50 107
Interest payable 2 2 4
Realised and unrealised gains on
securities held for trading (4) (2) (2)
Increase in current assets (10) (5) (1)
Decrease in current liabilities (6) (3) (2)
------- ------- -------
Net cash flows from operating activities 30 42 106
======= ======= =======
14 RELATED PARTY TRANSACTIONS
During the period the Group paid management charges totalling £9,315 (comparable
period 2008: £nil) to Watlington Securities Limited, a company which Mr A. P.
Stirling is a director and substantial shareholder. At the period end the Group
owed £nil (5th October 2008: £1,763) to Watlington Securities Limited.
In the ordinary course of business some share transactions are conducted through
Charles Stanley and Company Limited, a company with which Mr. Oury is
associated.