EUT.L Regulatory News (EUT)

28 Sep 2005 14:51

EUROPEAN UTILITIES TRUST PLCPRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTSThe Directors announce the unaudited statement of results for the year ended 31July 2005 as follows:STATEMENT OF TOTAL RETURN(incorporating the revenue account) 1 August 2004 1 August 2003 to 31 July 2005 to 31 July 2004 Revenue Capital Total Revenue Capital Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Gains on investments - 7,031 7,031 - 4,249 4,249 Dividends and interest 1,047 - 1,047 1,648 - 1,648 Other income 64 - 64 - - - Investment management fee (99) (98) (197) (136) (136) (272) Other expenses (219) - (219) (233) - (233) Exchange (losses)/gains - (143) (143) - 443 443on capital items Reconstruction costs 1 - 1 (321) (255) (576) Return on ordinary activities before finance costs and taxation 794 6,790 7,584 958 4,301 5,259 Interest payable and similar charges (103) (103) (206) (238) (238) (476) Return on ordinary activities before taxation 691 6,687 7,378 720 4,063 4,783 Taxation on ordinary (118) 30 (88) (99) 13 (86)activities Return on ordinary activities after taxation 573 6,717 7,290 621 4,076 4,697 Appropriations in respect of non-equity shares: - Zero Coupon Preference - (594) (594) - (948) (948)shares Return attributable to equity shares 573 6,123 6,696 621 3,128 3,749 Dividends in respect of equity shares: - Interim dividend of 1.97p paid 25 April 2005 (2004: (178) - (178) (210) - (210)1.97p) - Second interim dividend of 4.53p(2004: 4.53p) (410) - (410) (410) - (410)payable on 28 October 2005 Transfer (from)/to (15) 6,123 6,108 1 3,128 3,129 reserves pence pence pence pence pence pence Return per Ordinary Income Share 6.33 67.64 73.97 5.91 29.77 35.68 Return per Zero Coupon Preference share - 18.13 18.13 - 22.28 22.28 SUMMARISED BALANCE SHEET As at As at 31 July 2005 31 July 2004 ‚£'000 ‚£'000 Investments at market value 24,715 21,711 Net current assets 4,969 1,125 Total assets less current 29,684 22,836 liabilities Long-term liabilities (3,564) (3,418) 26,120 19,418 As at As at 31 July 2005 31 July 2004 pence pence NET ASSETS PER ORDINARY INCOME SHARE 191.51 124.04 NET ASSETS PER ZERO COUPON 268.19 250.06 PREFERENCE SHARE Ordinary Income Shares in issue 9,052,500 9,052,500 Zero Coupon Preference Shares in 3,275,000 3,275,000 issue SUMMARISED STATEMENT OF CASHFLOWS Year ended Year ended 31 July 2005 31 July 2004 ‚£'000 ‚£'000 Net cash inflow from operating 366 708 activities Net cash outflow from servicing (202) (507)of finance Net tax recovered 20 23 Net cash inflow from financial 5,514 11,086 investment Equity dividends paid (588) (692) Net cash outflow from financing - (10,525) Increase in cash 5,110 93 The above financial information does not constitute statutory financialstatements as defined in Section 240 of the Companies Act 1985 and has beenprepared on the basis of the accounting policies set out in the statutoryaccounts of the Company for the year ended 31 July 2004, and, where applicable,on the accounting policies contained within the circular to shareholdersconcerning the proposals for the extension of the life of the Company. Fullaccounts of European Utilities Trust plc for the year ended 31 July 2004, onwhich the auditors, Ernst & Young LLP gave an unqualified report, have beendelivered to the Registrar of Companies.The Board has declared a second interim net dividend of 4.53p (2004: 4.53p) onthe Ordinary Income shares, to be paid on 28 October 2005 to holders on theregister at the close of business on 7 October 2005.The annual report will be sent to shareholders in mid-October and will beavailable to members of the public from the Registered Office at 23 CathedralYard, Exeter, EX1 1HB.CHAIRMAN'S STATEMENTAs you will read later, I will be retiring as Chairman of your Board at the endof the Annual General Meeting in November. This is, therefore my last Reportand I am delighted to be able to tell you that your Company prospered in theyear ended 31 July 2005.PerformanceAlthough the environment for the major European economies remains challenging,share price indices have been strong, helped by continuing low inflation andinterest rates. With investors now placing more emphasis on current andprospective income, utilities, with their strong and sustainable cash flows,have generally been in demand and have participated fully in the market rally.A more detailed commentary will be given in the Investment Manager's Reportcontained within the Annual Report.Against that background your Company's investment portfolio has performed well.Total gross assets rose over the year from ‚£22.84m to ‚£29.68m, an increase of29.95%. Over the period under review the Dow Jones Stoxx composite benchmark,which we have adopted as the most appropriate benchmark against which to judgethe performance of our portfolio, rose by 29.74%. After deducting the Euroloan, (whose sterling value went up by ‚£146,000 because of movement in theexchange rate), total net assets rose from ‚£19.42m to ‚£26.12m, an increase of34.51%, whilst net asset value per Ordinary Income Share increased by 54.39%from 124.04p to 191.51p.Earnings and DividendsIn an otherwise very satisfactory year the Revenue Account was something of adisappointment. At the interim stage we drew ‚£99,000 from the Revenue Reservein order to pay an unchanged First Interim Dividend but I reported then thatthe Board expected revenue in the second half of the Company's year to be morethan sufficient to make up the shortfall. This would probably have been thecase if two companies, in which we have large holdings, had not unexpectedlypostponed their dividend payment dates until after our year end. As a result,investment income for the year declined to ‚£1.11m from ‚£1.65m last year.However, total expenses fell by an almost identical amount to ‚£420,000 from ‚£928,000 last year, when we bore the bulk of the costs incurred in achievingextension of your Company's life and reorganisation of its share capital. Wealso benefited from the agreed reduction of the investment management fee from0.75% to 0.65%. The end result for the year is net profit available fordistribution of ‚£573,000.In line with its policy of aiming to maintain or, whenever possible, increaseannual distributions, the Board has decided to declare an unchanged SecondInterim Dividend of 4.53p, thus total distributions for the year will again be6.50p. The cost of these distributions is ‚£588,000, exceeding the net profitfor the year by ‚£15,000, which is the final sum for the year to be drawn fromthe Revenue Reserve. One of the main justifications for creating a RevenueReserve is to cater for the sort of timing problem we have encountered. Asseveral of the companies in the portfolio have declared increased dividendspayable in our current year, your Board feels comfortable with a RevenueReserve now standing at ‚£192,000.DirectorsIn my statement accompanying the interim accounts I reported that RebeccaThomas had resigned as a Director, having moved to New Zealand with her family,and that Charles Wilkinson had been appointed to the Board.I have been Chairman of your Company since its formation in 1994. I considerthat that is quite long enough and that it is high time for a change. I,therefore, will not be seeking re-election at the Annual General Meeting, atthe end of which Charles Wilkinson, by unanimous resolution of the Board, willsucceed me as Chairman. I have no doubts at all that he is an excellent choice.In anticipation of my retirement and, in order to ensure that your Companycontinues to have four independent Directors, Robert Clinton was appointed tothe Board on 17 June 2005. Robert brings a wealth of experience as a presentand recent non-executive Chairman or Director of several investment trusts ofsimilar size and other companies. A current appointment is Chairman ofRegulatory Solutions Limited, which specialises in advising on all aspects ofcompliance and regulatory activity. His expertise in those fields should beparticularly valuable. It has been agreed by the Board that Robert shouldsucceed me as Chairman of the Audit Committee.OutlookDespite uncertainties about the prospects for economic growth within the Eurozone, equity markets have continued to rise since the Company's year end. Thesearch for investments offering sustainable income growth potential hascontinued to benefit the utilities and telecoms sectors. Your Board agrees withthe Investment Managers that this trend is likely to continue and that it willbring further benefits to your Company.I hope I am not burdening my successor with a problem by bowing out on such arelatively optimistic note. It has been a privilege and pleasure to work theselast 11 years on your behalf with my fellow Directors and the succession ofInvestment Managers.Lord InchyraChairman28 September 2005ENDEUROPEAN UTILITIES TRUST PLC