Last checked at 
26 Feb 2010 18:07
NEW STAR INVESTMENT TRUST PLC
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
FINANCIAL HIGHLIGHTS 31st 30th % December June 2009 2009 Change PERFORMANCE Net assets (£'000) 66,685 58,746 13.5
Net asset value per Ordinary share 93.89p 82.71p 13.5 Mid-market price per Ordinary share 70.00p 58.00p 20.7 Discount of share price to net asset value 25.4% 29.9% - FTSE World Index (total return, sterling 523.73 415.61 26.0adjusted) FTSE All-Share Index (total return) 3,590.71 2781.88 29.1 Six months ended Six months ended 31st December 31st December 2009 2008 REVENUE Return per Ordinary share (0.13p) 1.13p Dividend per Ordinary share - - TOTAL RETURN Net assets 14.8% (34.7%) FTSE All-Share Index 29.1% (21.1%) CHAIRMAN'S STATEMENT The six months to 31st December 2009 was a period of positive returns for yourCompany, with net assets rising 13.5% to £66.7 million. This gain, however,lagged the FTSE All-Share Price Index, which rose 29.1%. At the period end, thenet asset value per Ordinary share was 93.89p. This compares with the launchprice of 100p in May 2000. The FTSE All-Share Price Index over the same periodfell 7.2%.
The net revenue loss before tax for the period was £129,000. In common with previous years, your Directors are not recommending payment of an interim dividend to shareholders.
Change of investment manager
On 1st January 2010, Brompton Asset Management LLP commenced acting as the Company's investment manager, replacing New Star Asset Management Limited.
Market review Global equities gained 22.5% in sterling terms during the period. Havingbounced from their March 2009 bear-market low, shares maintained their upwardmomentum in late 2009 in response to central bank quantitative easing, therestoration of bank balance sheets and evidence of a global economic recoveryfrom the third quarter, fuelled by growth in emerging markets. Investors werecheered, in particular, by central bank signals that the priority was torestore monetary expansion to entrench economic growth and official short-terminterest rates were held at historically low levels. Latin American markets were strongest, returning 43.2% in sterling as a resultof rising commodity prices and recovering risk appetite among investors. Overthe half year, the Thomson Reuters industrial commodities index gained 38.3% indollar terms, gold gained 16.8% and oil rose 11.2%. Other relatively strongareas included Europe excluding the UK, 30.2% ahead in sterling, Asia excludingJapan, up 29.5%, and the UK, up 29.1%, while US equities returned 25.0%. Bycontrast, Japanese equities lagged, rising 5.7%.Economic recovery also had a significant impact on sector returns. Basicmaterials outperformed, rising 41.8%. Other strong sectors included technology,up 31.4%, industrial stocks, up 28.9%, and financial stocks, up 26.8%. As mightbe expected in a rally after a deep bear market, defensive sectorsunderperformed, with telecommunications rising 16.2% and utilities gaining19.8%.
Increased investor risk appetite and concerns about fiscal deficits and inflation were apparent in bond markets, where the total return on gilts was just 0.98%. By contrast, UK BBB-rated corporate bonds returned 17.3% as measured by Barclays Capital.
Portfolio review Your Company invested a significant proportion of its cash in equity marketsduring the period. The largest new investment was in the New Star EuropeanSpecial Situations Fund, a new fund investing in Europe excluding the UK. Theother new investments were in Atlantis China and in Polar Capital GlobalTechnology. Among disposals, your Company took partial profits on its holdingin an exchange-traded fund (ETF) invested in gold. Your Company ended the period with 70.5% of its assets in retail funds, 5.6% inETFs, 3.5% in investment trusts, 1.0% in hedge funds, 2.0% in other securitiesand 17.4% in cash. Geographically, the biggest non-cash exposures were the UK,at 15.2%, emerging markets, at 15.1%, and Asia excluding Japan, at 7.4%. Inasset class terms, the biggest non-cash holdings were in equities, at 48.1%,commodities, at 16.2%, and fixed income, at 8.8%. Outlook At the period end, investors were confident that profits and dividends wouldrevive in response to economic recovery. As a result, global equities weretrading at 31 December on a trailing multiple of 19.1 as measured by Datastreamagainst an 8.9 low in March 2009. The dividend yield on equities had,meanwhile, shrunk from a 4.57% high in March to 2.47%. Statistics announced at the turn of the year showed that industrial output inthe Group of Seven (G7) industrial economies and the Emerging Seven (E7)economies of Brazil, China, India, Mexico, Russia, South Korea and Taiwan hadrecovered 9% between February and November 2009, retracing more than half thepeak-to-trough fall from late 2007. While G7 output was still below itslong-term trend, E7 output was moving above trend. This suggests the E7economies may overheat later in 2010 but G7 monetary trends suggest the reverse- that developed world growth may slow from the spring. A modest growthslowdown may not, however, prevent a turn upwards in the monetary policy cyclelater in 2010, with G7 inflation moving above short-term interest rates. The impact of recovery on markets may depend on liquidity conditions. In therally beginning in March 2009, equities benefited from the fact that theinflation-adjusted money supply had outpaced industrial output. In the secondhalf of 2009, however, the gap narrowed and may close this year as inflationrises. Sentiment will also be affected by the timing of the withdrawal ofquantitative easing. These factors suggest that volatility may increase andsustained gains may require that investors pull cash out of other assetclasses.
In such conditions, the dispersion of returns between stocks and sectors may remain significant and careful security selection will be important in generating performance.
The unaudited net asset value at 31st January 2010 was 92.36p per Ordinary share.
On 30th October 2009 James Roe retired as a Director due to ill health. TheBoard will miss his guidance and we thank him for his valuable contributionover a number of years. Geoffrey Howard-SpinkChairman26th February 2010 INTERIM MANAGEMENT REPORT Performance In the six months to 31st December 2009 the net asset value per Ordinary shareincreased by 13.5% to 93.89p. In the same period the share price increased by20.7% to 70.00p. This compares to increases of 29.1% and 26.0% respectively inthe FTSE All-Share Index and the FTSE World Index. Further details of theCompany's performance may be found in the Chairman's Statement. Investment objective
The Company's investment objective is to achieve long-term capital growth.
Investment policy The Company's investment policy has been to allocate assets to globalinvestment opportunities through investment in equity, bond, commodity, realestate, currency and other markets. The Company's assets may have significantweightings to any one asset class or market, including cash.
The Company will invest in pooled investment vehicles, exchange traded funds, futures, options, limited partnerships and direct investments in relevant markets. The Company may invest up to 15% of its net assets in direct investments in relevant markets.
The Company will not follow any index with reference to asset classes,countries, sectors or stocks. Aggregate asset class exposure to any one of theUnited States, the United Kingdom, Europe ex UK, Asia ex Japan, Japan orEmerging Markets and to any individual industry sector will be limited to 50%of the Company's net assets, such values being assessed at the time ofinvestment and for funds by reference to their published investment policy or,where appropriate, their underlying investment exposure. The Company may invest up to 20% of its net asset value in unlisted securities(excluding unquoted pooled investment vehicles) such values being assessed
atthe time of investment.
The Company will not invest more than 15% of its net assets in any single investment, such values being assessed at the time of investment.
Derivative instruments and forward foreign exchange contracts may be used forthe purposes of efficient portfolio management and currency hedging. Derivatives may also be used outside of efficient portfolio management to meetthe Company's investment objective. The Company may take outright shortpositions in relation to up to 30% of its net assets, with a limit on shortsales of individual stocks of up to 5% of its net assets, such values beingassessed at the time of investment.
The Company may borrow up to 30% of net assets for short-term funding or long-term investment purposes.
No more than 10%, in aggregate, of the value of the Company's total assets maybe invested in other closed-ended investment funds except where such funds havethemselves published investment policies to invest no more than 15% of theirtotal assets in other listed closed-ended investment funds. Share capital At 31st December 2009, the Company had 71,023,695 Ordinary shares of 1p nominaleach in issue. There were no changes to the issued share capital of the Companyduring the period. Risk management
The principal risks associated with the Company that have been identified by the Board together with the steps taken to mitigate them are as follows:
Investment strategy: inappropriate long-term strategy, asset allocation and manager selection might lead to the underperformance of the Company. The Company's strategy is kept under regular review by the Board.
Business conditions and general economy: the Company's investment returns areinfluenced by general economic conditions in the UK and globally. Factors suchas interest rates, inflation, investor sentiment and the availability and costof credit could adversely affect investment returns. The portfolio is managedwith a view to mitigating risk by investing in a spread of different assetclasses and geographic areas. Portfolio risks: market price, foreign currency and interest rate risks: thedownward movement of investments contained in the portfolio would lead to areduction in the Company's net asset value. A proportion of the Group'sportfolio is invested in investments denominated in foreign currencies andmovements in exchange rates can significantly affect their sterling value. Itis the Board's policy to hold an appropriate spread of investments in order toreduce the risk arising from factors specific to a particular investment orsector. The Investment Manager takes account of foreign currency risk andinterest rate risk when making investment decisions.
The Company does not normally hedge against foreign currency movements affecting the value of the investment portfolio, although hedging techniques may be employed in appropriate circumstances.
Investment Manager: the quality of the management team employed by theInvestment Manager is an important factor in delivering good performance andthe loss by the Investment Manager of key staff could adversely affectinvestment returns. The Investment Manager usually attends board meetings andthe Board is kept informed of any personnel changes to the investment teamemployed by the Investment Manager. Tax and regulatory risks: a breach of section 842 ICTA 1988 could lead to aloss of investment trust status, resulting in capital gains realised within theportfolio being subject to corporation tax. A breach of the UKLA Listing Rulescould result in suspension of the Company's shares, while a breach of companylaw could lead to criminal proceedings, or financial or reputational damage. The Board employs experienced third parties to help manage the Company's legaland regulatory obligations. The Board receives a monthly financial report whichincludes information on the Company's compliance with Section 842. Operational: disruption to, or failure of, the Investment Manager's andAdministrator's accounting, dealing or payment systems or the Custodian'srecords could prevent the accurate reporting and monitoring of the Company'sfinancial position. The Company is also exposed to the operational risk thatone or more of its suppliers may not provide the required level of service.
Investment Management Arrangements
The Company's investments were managed by New Star Asset Management Limited ('New Star') a subsidiary of Henderson Global Investors Plc, throughout the period. The Company's investments during the period included funds managed by subsidiaries of Henderson Global Investors Plc.
On 1st January 2010 Brompton Asset Management LLP ('Brompton') replaced New Star as Investment Manager. The portfolio manager, Simon Akroyd, transferred from New Star to Brompton. Mr Duffield is the Senior Partner of Brompton.
Change of Custodian and Administrator
On 1st January 2010 Brown Brothers Harriman & Co was appointed as the independent custodian and Phoenix Administration Services Limited was appointed the Company's independent administrator.
Change of Company Secretary
On 1st January 2010 Phoenix Administration Services Limited was appointed Secretary to the Company.
Auditors The half-yearly financial report has been reviewed, but not audited, by Ernst &Young LLP pursuant to the Auditing Practices Board guidance on the Review ofInterim Financial Information. Responsibility statement
The Directors (Mr G Howard-Spink (Chairman), Mr J Duffield and Mr M Gregson) confirm that to the best of their knowledge:
• The condensed set of financial statements contained within the half-yearlyreport to 31st December 2009 has been prepared in accordance with InternationalFinancial Reporting Standards.
• The interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the financial statements.
• The interim management report includes a description of the principal risks and uncertainties for the remaining six months of the year.
• The interim management report includes a fair review of the information concerning related party transactions as required by DTR 4.2.8R of the FSA's Disclosure and Transparency Rules.
By order of the Board
Phoenix Administration Services Limited - Secretary
26th February 2010
INDEPENDENT REVIEW REPORT TO NEW STAR INVESTMENT TRUST PLC
Introduction We have been engaged by the Company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31stDecember 2009 which comprises the consolidated income statement, consolidatedstatement of changes in equity, consolidated balance sheet, consolidated cashflow statement and related explanatory notes 1 to 9. We have read the otherinformation contained in the half-yearly financial report and consideredwhether it contains any apparent misstatements or material inconsistencies withthe information in the condensed set of financial statements. This report is made solely to the Company in accordance with guidance containedin ISRE 2410 (UK and Ireland) "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the Company, for our work, for thisreport, 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 Services Authority.
As disclosed in note 1, the annual financial statements of the Group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting", as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review
We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof 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 tobelieve that the condensed set of financial statements in the half-yearlyfinancial report for the six months ended 31st December 2009 is not prepared,in all material respects, in accordance with International Accounting Standard34 as adopted by the European Union and the Disclosure and Transparency Rulesof the United Kingdom's Financial Services Authority. Ernst & Young LLPLondon26th February 2010
SCHEDULE OF TWENTY LARGEST INVESTMENTS
at 31st December 2009 Bid-market Value Holding Activity
£'000 Percentage of Portfolio
BlackRock Gold & General Income Fund Investment Fund 5,229 10.13 Occam Umbrella Asia Focus Fund Investment Fund 4,006 7.76 Natixis Loomis Sayles Multisector Income Fund Investment Fund
3,848 7.45 Investec Africa Fund Investment Fund 3,573 6.92
New Star European Special Situations Fund Investment Fund 3,060 5.93 Skandia UK Strategic Best Ideas Fund Investment Fund
3,002 5.82 Atlantis China Fund Investment Fund 2,545 4.93 M&G Optimal Income Fund Investment Fund 2,437 4.72
Polar Capital Global Technology Fund Investment Fund
2,377 4.60 Trojan Investment Fund Investment Fund 2,368 4.59
Artemis UK Special Situations Fund Investment Fund
2,291 4.44 Prusik Asia Fund Investment Fund 2,252 4.36
iShares FTSE/Xinhua China 25 ETF Exchange Traded Fund 2,093 4.05 Lyxor Gold Bullion Securities ETF Exchange Traded Fund 1,852 3.59 Neptune Russia & Greater Russia Fund Investment Fund 1,580 3.06 Henderson Private Equity Investment Trust Investment Company
1,393 2.70 GWI Brazil Fund Investment Fund 1,122 2.17
BH Global Investment Limited Investment Company
1,065 2.06 The Sierra Investment Fund Investment Fund 1,000 1.94 Corndon Limited Equity 1,000 1.94 48,093 93.16
Balance held in 14 investments
3,530 6.84 Total investments 51,623 100.00
The investment portfolio can be further analysed as follows:
Equities 2,981 Convertible securities 458
Investments funds, investment companies and ETFs 48,184
51,623
CONSOLIDATED INCOME STATEMENT
for the six months to 31st December 2009
Six months ended 31st December 2009 (unaudited) Revenue Capital Total Return Return Return Notes £'000 £'000 £'000 INCOME Investment income 232 - 232 Other operating income 12 - 12 Total income 2 244 - 244
GAINS AND LOSSES ON INVESTMENTS
Gains / (losses) on investments at fair value through profit or loss - 8,175 8,175 Gains / (losses) on index future contracts - - - Losses on forward currency contracts - - - Other exchange gains / (losses) - 257 257 Trail commission - 78 78 244 8,510 8,754 EXPENSES Management fees 3 (235) - (235) VAT recovery - - - Other expenses (138) - (138)
PROFIT/(LOSS) BEFORE FINANCE COSTS
AND TAX (129) 8,510 8,381 Finance costs - - - PROFIT/(LOSS) BEFORE TAX (129) 8,510 8,381 Tax 36 19 55 PROFIT/(LOSS) FOR THE PERIOD (93) 8,529 8,436 EARNINGS/ (LOSS) PER SHARE Ordinary shares (pence) 4 (0.13) 12.01 11.88
The total column of this statement represents the Group's Income Statement,prepared in accordance with IFRS. The supplementary revenue return and capitalreturn columns are both prepared under guidance published by The Association ofInvestment Companies. All items in the above statement derive from continuingoperations. No operations were acquired or discontinued during the period.
All income is attributable to the equity holders of the parent company.
There are no minority interests.
CONSOLIDATED INCOME STATEMENTfor the six months to 31st December 2008 (unaudited) and the year ended 30thJune 2009 Six months ended Year ended 31st December 2008 30th June 2009 (unaudited) (audited) Revenue Capital Total Revenue Capital Total Return Return Return Return Return Return Notes £'000 £'000 £'000 £'000 £'000 £'000INCOME Investment income 918 - 918 1,049 - 1,049 Other operating income 163 - 163 223 - 223 Total income 2 1,081 - 1,081 1,272 - 1,272
GAINS AND LOSSES ON INVESTMENTS
Gains / (losses) on investments at fair value through profit or loss
(34,928) (34,928) - (36,822) (36,822)
Gains / (losses) on index future contracts -
25 25 - (672) (672)
Losses on forward currency contracts -
(302) (302) - (302) (302)
Other exchange gains / (losses) - 285 285 - (167) (167) Trail commission - - - - 129 129 1,081 (34,920) (33,839) 1,272 (37,834) (36,562) EXPENSES Management fees 3 (88) - (88) (311) - (311) VAT recovery 170 - 170 170 - 170 Other expenses (103) (1) (104) (268) (2) (270) PROFIT/(LOSS) BEFORE FINANCE COSTS AND TAX 1,060 (34,921) (33,861) 863 (37,836) (36,973) Finance costs (71) - (71) (77) - (77) PROFIT/(LOSS) BEFORE TAX 989 (34,921) (33,932) 786 (37,836) (37,050) Tax (184) - (184) (131) 40 (91) PROFIT/(LOSS) FOR THE PERIOD 805
(34,921) (34,116) 655 (37,796) (37,141)
EARNINGS/(LOSS) PER SHARE Ordinary shares (pence) 4 1.13 (49.17) (48.04) 0.92 (53.22) (52.3)
The total column of this statement represents the Group's Income Statement,prepared in accordance with IFRS. The supplementary revenue return and capitalreturn columns are both prepared under guidance published by The Association ofInvestment Companies. All items in the above statement derive from continuingoperations. No operations were acquired or discontinued during the period.
All income is attributable to the equity holders of the parent company. There are no minority interests.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2009 (unaudited)
Share Share Special Retained capital premium reserve earnings Total £'000 £'000 £'000 £'000 £'000 AT 30TH JUNE 2009 710 21,573 56,908 (20,445) 58,746 Profit for the period - - - 8,436 8,436 Dividend paid - - - (497) (497) AT 31ST DECEMBER 2009 710 21,573 56,908 (12,506) 66,685
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31st December 2008 (unaudited)
Share Share Special Retained capital premium reserve earnings Total £'000 £'000 £'000 £'000 £'000 AT 30TH JUNE 2008 710 21,573 56,908 17,214 96,405 Loss for the period - - - (34,116) (34,116) Dividend paid - - - (518) (518) AT 31ST DECEMBER 2008 710 21,573 56,908 (17,420) 61,771
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th June 2009 (audited)
Share Share Special Retained capital premium reserve earnings Total £'000 £'000 £'000 £'000 £'000 AT 30TH JUNE 2008 710 21,573 56,908 17,214 96,405 Loss for the year - - - (37,141) (37,141) Dividend paid - - - (518) (518) AT 30TH JUNE 2009 710 21,573 56,908 (20,445) 58,746
CONSOLIDATED BALANCE SHEET
at 31st December 2009
31st December 31st December 30th June 2009 2008 2009 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000 NON-CURRENT ASSETS
Investments at fair value through profit or loss 51,623 48,440 39,228 CURRENT ASSETS Other receivables 173 8,744 94 Cash and cash equivalents 15,626 6,728 20,189 15,799 15,472 20,283 TOTAL ASSETS 67,422 63,912 59,511 CURRENT LIABILITIES Other payables (448) (1,715) (421) TOTAL ASSETS LESS CURRENT LIABILITIES 66,974 62,197 59,090 NON-CURRENT LIABILITIES Deferred tax liability (289) (426) (344) NET ASSETS 66,685 61,771 58,746
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS Called-up share capital 710 710 710 Share premium 21,573 21,573 21,573 Special reserve 56,908 56,908 56,908 Retained earnings 5 (12,506) (17,420) (20,445) TOTAL EQUITY 66,685 61,771 58,746
NET ASSET VALUE PER ORDINARY SHARE (PENCE)
6 93.89 86.97 82.71
The interim report was approved and authorised for issue by the Board on 26th February 2010.
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31st December 2009
Six months Six months Year ended ended ended 31st December 31st December 30th June 2009 2008 2009 (unaudited) (unaudited) (audited) Notes £'000 £'000 £'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before finance costs
and tax 8,381 (33,861) (36,973) Adjustments for: (Gains) / losses on investments (12,395) 37,128 46,340
Operating cash flows before movements in
working capital (4,014) 3,267 9,367 (Increase) / decrease in receivables (74) (8,635) 8 Increase/(decrease) in payables 28 1,026 (347)
Net cash from operating activities before
finance costs and tax (4,060) (4,342) 9,028 Taxation (6) (175) (78) NET CASH FROM OPERATING ACTIVITIES 7 (4,066) (4,517) 8,950
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid (497) (518) (518) Interest paid - (71) (77) NET CASH USED IN FINANCING ACTIVITIES (497) (589) (595)
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (4,563) (5,106) 8,355
Cash and cash equivalents at beginning of
period 20,189 11,834 11,834
CASH AND CASH EQUIVALENTS AT END OF
PERIOD 15,626 6,728 20,189
NOTES TO THE INTERIM FINANCIAL REPORT
1 Accounting policies The consolidated Interim Financial Report on pages 12 to 20 comprise theunaudited results of the Company and its subsidiary, JIT Securities Limited,for the six months to 31st December 2009, and do not constitute statutoryaccounts under the Companies Act 2006. Full statutory accounts for the year to30th June 2009 included an unqualified audit report, did not contain anystatements under section 498 of the Companies Act 2006 and have been filed
withthe Registrar of Companies. The interim financial report has been prepared in accordance with InternationalFinancial Reporting Standards (IFRS). These comprise standards andinterpretations approved by the International Accounting Standards Boardadopted by the European Union and are presented in pounds sterling, as this isthe principal currency in which the Group's transactions are undertaken.
The same accounting policies have been followed in the interim financial report as compared to the accounts for the year ended 30th June 2009, which are prepared in accordance with IFRSs as adopted by the European Union.
2 Total income For the six For the six For the months ended months ended year ended 31st December 31st December 30th June 2009 2008 2009 £'000 £'000 £'000 Income from investments UK net dividend income - 308 319 UK unfranked investment income 86 555 570 Fixed interest income 118 27 105 Interest on convertible loan stock 28 28 55 232 918 1,049 Other Operating Income Bank interest receivable 12 155 188 HMRC interest received - 8 35 12 163 223 Total Income Comprises Investment Income 232 918 1,049 Other income 12 163 223 244 1,081 1,272
Other Operating Income for the six months ended 31st December 2008 and the yearended 30th June 2009 include interest relating to the final recovery of VAT
onpast management fees. 3 Management fees For the six For the six For the months ended months ended Year ended 31st December 31st December 30th June 2009 2008 2009 £'000 £'000 £'000 Investment management 235 88 311 Performance fee - - - 235 88 311
The management fee is payable in arrears and is calculated at a rate of 3/16% per quarter of the total assets of the Company and its subsidiary after the
deduction of the value of any New Star managed investments (as defined in the management agreement). With effect from 1st September 2008, the investment
manager has also been entitled to a performance fee of 15% of the growth in netassets over a hurdle of 3-month Sterling LIBOR plus 1% per annum, payable six monthly in arrears, subject to a high water mark. The aggregate of the Company's management fee and any performance fee are subject to a cap of 4.99% of net assets in any financial year (with any performance fee in excess of thiscap capable of being earned in subsequent periods). The performance fee will be charged 100% to capital, in accordance with the board's expectation of how any out performance will be generated.
4 Return per Ordinary share For the six For the six For the months ended months ended year ended 31st December 31st December 30th June 2009 2008 2009 £'000 £'000 £'000 Revenue return (93) 805 655 Capital return 8,529 (34,921) (37,796) Total return 8,436 (34,116) (37,141) Weighted average number of Ordinary shares 71,023,695 71,023,695 71,023,695 Revenue return (0.13)p 1.13p 0.92p Capital return 12.01p (49.17)p (53.22)p Total return 11.88p (48.04)p (52.30)p 5 Retained earnings
The components of retained earnings are set out below:
31st December 31st December 30th June 2009 2008 2009 £'000 £'000 £'000 Capital reserve - realised (8,856) 498 (5,165) Capital reserve - revaluation (4,229) (19,237) (16,449) Revenue reserve 579 1,319 1,169 (12,506) (17,420) (20,445) 6 Net asset value per Ordinary share 31st December 31st December 30th June 2009 2008 2009 £'000 £'000 £'000
Net assets attributable to Ordinary
shareholders 66,685 61,771 58,746 Ordinary shares in issue at end of period 71,023,695 71,023,695 71,023,695 Net asset value per Ordinary share 93.89p 86.97p 82.71p 7 Notes to the cash flow statement
Cash and cash equivalents comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.
Cash flows from operating activities
Included within the cash flows from operating activities are the cash flows associated with the purchases and sales of investments as these are not considered to be investing activities given the objective of the Company.
Cash flows from operating activities can therefore be further analysed asfollows: 31st 31st December December 30th June 2009 2008 2009 £'000 £'000 £'000
Proceeds on disposal of investments at fair value through profit and loss 4,854 41,202
69,304
Purchase costs of investments at fair value
through profit and loss (9,074) (46,252) (59,786) Net cash flows from investment transactions (4,220) (5,050) 9,518 Cash flows from other operating activities 154 533 (568) Net cash from operating activities (4,066) (4,517) 8,950 8 Related party transactions
There have been no related party transactions that have materially affected the financial position or performance of the Group.
9 Comparative information
The financial information contained in the interim report to 31st December 2009does not constitute statutory accounts under the Companies Act 2006. Thefinancial information for the six months to 31st December 2009 and 2008 has notbeen audited. The information for the year ended 30th June 2009 has beenextracted from the latest published audited financial statements. The auditedfinancial statements for the year ended 30th June 2009 have been filed with theRegistrar of Companies. The report of the auditors on those accounts wasunqualified and did not contain any statements under section 498 of theCompanies Act 2006. 10 Availability of Report
Printed copies of this Interim Report will be sent to shareholders shortly.
The Interim Report will be available to view and download from the Company's website at www.nsitplc.com
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