EPG.L Regulatory News (EPG)

18 Aug 2005 14:16

EP GLOBAL OPPORTUNITIES TRUST plcPRELIMINARY ANNOUNCEMENT OF INTERIM RESULTSThe Directors announce the unaudited statement of results for the six months to30 June 2005 as follows:-STATEMENT OF TOTAL RETURN(incorporating the revenue account* of the Company) 1 January 2005 13 November 2003 to 30 June 2005 to 30 June 2004 (restated**) Revenue Capital Total Revenue Capital Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Gains on investments - 2,594 2,594 - 1,643 1,643 Dividends and interest 552 - 552 390 - 390 Investment management fee (99) - (99) (90) - (90) Other expenses (118) - (118) (141) - (141) Net return before 335 2,594 2,929 159 1,643 1,802 taxation Taxation on ordinary (50) - (50) (21) - (21)activities Return on ordinary 285 2,594 2,879 138 1,643 1,781 activities after taxation Dividend in respect of (91) - (91) - - - Ordinary shares (note 3) Transfer to reserves 194 2,594 2,788 138 1,643 1,781 Pence Pence Pence Pence Pence Pence Return per Ordinary share 1.25 11.41 12.66 0.62 7.37 7.99 *** * The revenue column of this statement is the revenue account of the Company.** For details of the restatement of the Company's comparative figures pleaserefer to the notes that accompany this announcement.*** The revenue return per Ordinary share is based on earnings of ‚£285,000 andon 22,740,588 Ordinary shares being the weighted number of shares in issueduring the period 1 January 2005 to 30 June 2005.The capital return per Ordinary shares is based on net capital gains of ‚£2,594,000 and on 22,740,588 Ordinary shares being the weighted number of sharesin issue during the period 1 January 2005 to 30 June 2005.All revenue and capital items derive from continuing operations.BALANCE SHEET As at As at As at 30 June 2005 31 December 2004 30 June 2004 (restated*) (restated*) ‚£'000 ‚£'000 ‚£'000 Fixed Assets Investments at fair value 29,406 25,389 22,067 Current assets Debtors 151 60 68 Cash at bank 219 826 2,396 370 886 2,464 Creditors - amounts falling due 101 145 849 within one year Net current assets 269 741 1,615 Total net assets 29,675 26,130 23,682 Capital and Reserves Called up share capital 231 224 225 Capital redemption reserve 1 1 - Share premium account 1,842 1,092 1,092 Special reserve 20,506 20,506 20,584 Capital reserve - realised 1,373 393 344 - unrealised 5,397 3,783 1,299 Revenue reserve 325 131 138 Total shareholders' funds 29,675 26,130 23,682 Pence Pence Pence Net asset value per Ordinary share 128.65 116.41 105.14 including current period revenue (note 2) * For details of the restatement of the Company's comparative figures pleaserefer to the notes that accompany this announcement.SUMMARISED STATEMENT OF CASH FLOWS 1 January 2005 13 November 2003 to 30 June 2005 to 30 June 2004 ‚£'000 ‚£'000 Net cash inflow from operating activities 195 195 Capital expenditure and financial investment Purchases of investments (6,494) (22,525) Sales of investments 5,026 2,822 Net cash outflow from capital expenditure and financial investment (1,468) (19,703) Net cash outflow before financing (1,273) (19,508) Equity dividends paid (note 3) (91) - Financing Proceeds of share issue net of issue 757 21,904 expenses Net cash inflow from financing 757 21,904 (Decrease)/increase in cash (607) 2,396 Notes to this announcement:The unaudited interim financial information does not constitute statutoryaccounts. This information has been prepared on the basis of the accountingpolicies used in the statutory accounts of the Company for the year ended 31December 2004, with the exception of the changes stated below. The statutoryaccounts for the year ended 31 December 2004 received an unqualified auditopinion.1. Changes in accounting policiesThis Interim Report has been prepared using new accounting standards which havebeen issued to begin the process of converging UK standards with InternationalFinancial Reporting Standards ("IFRS"). The small effect on the Net Asset Valueof these changes is laid out in the table in note 2. The first change,Financial Reporting Standard ("FRS ") 21, is to recognise any dividend payableas a liability only after it has been declared, (a) in the table. The second,FRS 25, is to value the portfolio at bid prices rather than at mid marketprices, (b) in the table.With effect from 1 January 2005, the Company has adopted the followingFinancial Reporting Standards :FRS 21 Events after the balance sheet dateDividends paid by the Company are accounted for in the period in which thedividend has been declared. Previously, the Company recognised dividends in theperiod in which net revenue, to which those dividends related, was accountedfor.FRS 25 Financial Instruments: Disclosure and Presentation and FRS 26 Financialinstruments: MeasurementAll investments held by the Company are classified as `fair value throughprofit and loss'. For investments actively traded in organised financialmarkets, fair value is generally determined by reference to Stock Exchangequoted market bid prices at the close of business on the balance sheet date.Previously all listed investments were valued using closing mid market pricesat the balance sheet date.2. Net asset value per shareThe net asset value per Ordinary share is based on total net assets at 30 June2005 of ‚£29,675,000 (31 December 2004 ‚£26,130,000, 30 June 2004 ‚£23,682,000)and on 23,065,339 Ordinary shares (31 December 2004 22,445,339, 30 June 200422,525,339) being the issued share capital at that date. These net asset valueshave been calculated in accordance with the revised accounting policies set outin note 1 and include current period revenue.Reconciliation of changes to net asset values resulting from accounting policychanges 30 June 2005 31 December 2004 30 June 2004 ‚£'000 pence ‚£'000 pence ‚£'000 pence Net asset value 29,708 128.80 26,077 116.18 23,719 105.30 (including current period revenue ) Increase due to dividend - - 90 0.40 - -accounting change (a) Reduction due to using bid (33) (0.15) (37) (0.17) (37) (0.16)prices (b) Net assets per revised UK GAAP 29,675 128.65 26,130 116.41 23,682 105.143. Dividends paidThe Company issued 200,000 Ordinary shares on 9 February 2005 and a further100,000 on 17 February 2005. These issues were prior to the record date for thefinal dividend of the period ended 31 December 2004 and therefore were entitledto receive that dividend. The total amount paid by the Company was ‚£91,000, ‚£1,000 higher than the original accrual. See note 1 for details of the Company'srevised policy relating to dividends payable to shareholders.4. Status of the CompanyIt is the intention of the Directors to conduct the affairs of the Company sothat they satisfy the conditions for approval as an investment trust companyset out in Section 842 of the Income and Corporations Taxes Act 1988.Chairman's StatementInvestment PerformanceThis is the second Interim Report of your Company since it commenced operationsin December 2003 and it is pleasing to report another six months of excellentperformance. At the end of June 2005, the net asset value per share had risento 128.7p, a gain of 10.5 per cent over the year end figure, which isfractionally greater than that reported in the Annual Report due to accountingchanges. For comparison, the FT World Index and the FT All-Share Index achievedtotal return performances of 7.4 per cent and 8.2 per cent respectively in thefirst half of 2005. The share price increased 18.3 per cent to 130.8p. Thesubstantially greater increase in the share price resulted from a change in thelevel of the discount to net asset value. At the end of 2004, the shares werequoted at a discount of 5 per cent to the net asset value. By the end of June,this had become a premium of 1. 6 per cent.As was stated in the annual report, it is your Board's intention to buy-inshares in the open market and to issue shares to limit, as far as possible, thedivergence of the share price and the net asset value per share. Encouragingly,the discount was eliminated without any shares being bought-in and, in fact, wewere able to place 620,000 new shares during the six months at a small premiumto net asset value.Revenue AccountThe revenue account shows a considerable improvement compared to the sameperiod last year. The revenue per share is 1.25p, compared to 0.62p in theperiod to the end of June 2004. The improvement is the result of investing in anumber of higher yielding shares in the second half of last year. This was notdone with a view to improving the revenue account but is simply a consequenceof where our Investment Manager found the best value in individual shares.The majority of the revenue is received in the first half of the year, so thenet revenue at the year end may be little different from the level in thisInterim Report. As was the case last year, your Board has not declared aninterim dividend but will wait until the year end, when the amount availablefor distribution will be known, before proposing a dividend.Investment PolicyEdinburgh Partners, our Investment Manager, is committed to a policy ofidentifying undervalued shares in global markets. Good stock selection hasmaintained its positive contribution to the investment performance in the sixmonths to the end of June. It was also noteworthy that stock markets have riseneven where economies have demonstrated weakness. The UK exemplified thisfeature with a strong stock market performance despite poor performance insectors close to the consumer. The Manager continues its relative preferencefor Japan, Europe and the UK, because it finds better value in these markets.Europe, in particular, has afforded several opportunities to invest inundervalued stocks and these have provided much of the good performance.Our Manager was cautious of valuations in the American market and Wall Streetproved to be one of the poorer performers in the half year. That cautiongenerally remains and the Federal Reserve has clearly flagged the need to keepraising short term interest rates to head off the risk of inflation. Somesegments of the U.S. stock market remain overvalued but exposure may be changedto reflect the emergence of better value in some American stocks. Within Europeour Manager continues to find value in corporate restructuring and in theinvolvement of companies in Central and Eastern Europe.OutlookEquity markets have now been recovering for over two years and that in itselfmight be cause to take a more cautious view of the outlook. Also, there havebeen signs of a slower rate of growth in economic activity in a number ofcountries, no doubt partly caused by the rise in the oil price, which remainsat a high level, as well as the distressing increase in terrorist activity.There are, however, a number of positive factors, including the relativelysubdued level of inflation, long term interest rates trending lower and thelikelihood that short term interest rates in the UK and elsewhere, with theprobable exception of the United States, have peaked.The lower long term interest rates are particularly encouraging as thisincreases the attractiveness of equities relative to bonds. On balance, wecontinue to believe that there remain opportunities to make money in equitymarkets.Teddy TullochChairman18 August 2005Enquiries:Kenneth GreigEdinburgh PartnersTelephone: 0131 272 2701ENDEP GLOBAL OPPORTUNITIES TRUST PLC