RNS Number : 7711I
Utilico Emerging Markets Limited
20 June 2011
 



Date:                20 June 2011

 

Contact:           Charles Jillings                                              

Utilico Emerging Markets Limited                    

01372 271 486                                               

 

Alastair Moreton

Westhouse Securities Limited

0207 601 6100

 

 

Utilico Emerging Markets Limited

Statement of Results

for the year to 31 March 2011

 

Highlights of results

 

 

·      Revenue earnings per share of 5.61p, up 20.1%

·      Net asset value increased to 175.28p, up 18.1%

·      Total return of 31.71p*, equal to 21.4%

·      Dividends per ordinary share of 5.20p up 8.3%

·      Dividends for the year represent a yield of 3.3% on ordinary share price

·      Average annual compound total return since inception of 13.8%

 

               *dividends re-invested

Chairman's Statement

 

I am very pleased to report that Utilico Emerging Markets Limited ("UEM" or "the Company") achieved a total return per ordinary share of 21.4% in the year to 31 March 2011. The total return was achieved by a diluted net asset value ("NAV") per ordinary share gain of 18.1% to 175.28p and dividends paid during the year of 4.80p. This is an outstanding performance in challenging markets. The performance outstripped the MSCI Emerging Markets Index which rose 9.6% over the year (sterling adjusted).

 

Since inception UEM's NAV per ordinary share has gained 78.2%. Adding back dividends of 22.35p over the last six years results in an average annual compound total return per ordinary share of 13.8%.

 

The increase in UEM's NAV was driven by the continuing gains on the portfolio which amounted to £70.4m and arose across most of the portfolio.

 

The revenue earnings per share ("EPS") have been strong reflecting the underlying strengths of the investee companies. It is pleasing to report that the revenue EPS rose by 20.1% to 5.61p.

 

Against this background the Board has proposed an increased final dividend of 1.45p, up 38.1%. The total dividend for the year is 5.20p, up 8.3%.

 

The Company bought back a substantial number of warrants, S shares and ordinary shares over the year. UEM invested £11.5m, buying in 8.1m ordinary shares at an average share price of 141.90p per share. In addition, the Company invested £4.8m in buying back warrants and S shares. The balance of the warrants and S shares were exercised and increased the ordinary shares in issue by 23.4m and raised £23.4m. The net effect of all the above is that the number of shares in issue increased by some 15.3m and UEM's capital increased by £7.0m over the year.

 

It should be emphasised that buybacks are an investment decision and there is little evidence they reduce the discount. It is pleasing to see the Company continue to buy back shares in the current year.

 

ICM Limited (the "Investment Manager" or "ICM") earned a performance fee for the first time in two years due to the Company's strong results. This was settled in early April. Half the fee is payable in ordinary shares which were purchased in the market given the discounts available at the time. As a result UEM reduced its performance fee costs by £0.3m and this has been added back to the assets in the current year.

 

The Investment Manager has continued to exercise tight cost controls and the total expense ratio ("TER") (excluding the performance fee) has been maintained at 0.8%.

 

Your Board has adopted a policy of holding its Board meetings in countries where the underlying portfolio is invested. At the same time as attending the Board meetings the Directors have visited a number of investee companies. Over the last two years the Directors have met with over 50% of UEM's current investee companies by value. This has been a valuable and rewarding experience encouraged by the Investment Manager. This has placed considerable time demands on the Board and I would like to thank all my fellow Directors for their attendance.

 

In view of the increased time commitment and escalating demands placed on the Board the remuneration committee has resolved to increase the Directors' fees by £2,500 to £27,500 and the Chairman's fee by £3,000 to £38,000.

 

I am pleased to see the rising shareholdings of the Directors in UEM as a result not only of their fees being paid in shares but also as a result of the exercise of their warrants and subscription shares. As at 17 June 2011 the Directors held 1.7m ordinary shares with a market value of £2.8m.

 

The Bermuda Stock Exchange is now a recognised exchange and as a consequence enables ordinary shares to qualify for inclusion in ISAs in the UK. Given this change it is proposed that UEM will delist from the Channel Island Stock Exchange as there are no added benefits from maintaining this listing. It is expected that cancellation of the listing on CISX will take effect at 8.00 am on 15 July 2011.

 

During the year Garth Milne stepped down as a Director. I would like to thank Garth for his support and commitment to UEM and I am pleased he will be continuing as a consultant.

 

Anthony Muh joined the Board in October 2010 and stands for election accordingly. Anthony has already added considerably to the Board's deliberations.

 

It is with deep sadness I must report that Rupert Stevenson, of Westhouse Securities, passed away earlier this month. Rupert was instrumental in the formation of UEM. We will all miss his ability, energy, enthusiasm and drive.

 

Most of our investee companies continue to report excellent results both at the top line but also at the bottom line. There are a number of challenges which remain unresolved in the wider economies including high sovereign debt, artificially low interest rates, and inflation. However, our portfolio looks well positioned to meet these challenges and deliver value for the longer term.

 

 

Alexander Zagoreos
Chairman
20 June 2011

 

 

 



Investment Manager's Report

 

At the beginning of the 12 months under review markets were focused on European sovereign debt concerns, economic instability in Portugal, Ireland, Greece and Spain, Government austerity measures and possibilities of a double dip recession. Markets were also focusing on the need for quantitative easing ("QE2"). Markets picked up during the summer months, the emerging market economies more so than the developed world. Oil and gold prices continued to rise. Faced with ongoing weak economic conditions in the US the Federal Reserve Bank introduced QE2 in November last year. The first few months of 2011 brought with it political unrest in the Middle East, and the tsunami in Japan which added to general market uncertainty and to the already high oil price.

 

Against all this, UEM has performed well, achieving a total return of 21.4% in the year to 31 March 2011 which reflects UEM's successful stock selection approach. UEM has outperformed the MSCI Emerging Markets Index (Sterling adjusted) which was up 9.6% over the same 12 months.

 

The performance of the emerging markets index has been good. However, looking at the constituent parts, the underlying sector trends have remained divergent. The utilities sector continues to underperform the wider markets, while the mining sector continues to strongly outperform. It has been very rewarding to see UEM's stock selection result in a strong outperformance by UEM.

 

It is worth emphasising that UEM is about stock selection and the Investment Managers travel extensively to achieve this. Over the 12 months to 31 March 2011 the Investment Manager has visited China, Malaysia, Thailand, Philippines,

Singapore, Romania, Bulgaria and Egypt.

 

UEM's investment focus is mainly on listed companies which are operational and profitable. We believe this gives us a better governance environment and a higher visibility on investee companies' management abilities. On this latter point we maintain extensive databases which enable us to compare performance by a company against its international peer group.

 

PORTFOLIO

UEM's gross assets (less liabilities excluding loans) increased from £344.5m at March 2010 year end to £393.4m at 31 March 2011.

 

The top ten investments remain broadly the same although there have been some positional changes. Further details on each company can be found in the Review of the Top Ten on pages 12 and 13.

 

The one new entry to the top ten is Santos Brasil Participacoes ("Santos"). A port operator with three Brazilian ports including Tecon Santos, the largest container terminal in Latin America. In the year to 31 March 2011, Santos' share price was up 54.4%. Santos is at number nine in the portfolio and replaces ENN Energy Holdings (formerly Xinao Gas).

 

Santos is a classic UEM investment. It is listed in Brazil and is profitable. It is exhibiting strong growth as Brazil's two way trade accelerates as a result of its growing consumer base. Over the period Santos' throughput volumes increased 30.6% and, as a result of its strong operational leverage, net income jumped 72.0%. Santos looks well placed to continue this momentum.

 

Malaysia continues to offer growth combined with structural change. We believe many of the initiatives put forward by Prime Minister Najib Razak will deliver long term sustainable growth.

 

Malaysia Airport Holdings ("MAHB") continued to perform well and its share price rose 26.4%. We took this opportunity to sell £10.3m of our holding in MAHB representing 25.6% of our opening holding of £40.2m. Despite this MAHB remains our largest investment at £40.2m at the year end. We remain convinced that MAHB will offer long term reward as it brings on its new low cost carrier terminal and introduces a third runway both of which are currently under construction at Kuala Lumpur International Airport (KLIA) airport. Long term we remain committed to MAHB.

 

Puncak Niaga ("Puncak") disappointingly under performed for the second year in a row. Puncak is continuing its protracted negotiation with the Malaysian government regarding a possible sale of its assets back to the state, and in the meantime it has not been awarded its full tariffs allowed under its concession contract. As a result of this continuing issue the share price fell 12.6% over the 12 months to 31 March 2011. Revenues for the year to December 2010 were up marginally at 1.5% and normalised net income fell 22.6% on higher depreciation charges and interest expense, the latter due to continued cash outflows throughout the year. After the year end Puncak's bonds fell into a technical default and resulted in escalating concerns and a speedy resolution is now urgent.

 

Brazil continues to be a long-term investment focus. The outcome of the election was broadly positive for investors and the economy continues to benefit from a number of factors including the very significant economic activity around offshore oil exploration, robust commodity prices and the award of the football World Cup in 2014 and the Olympic Games 2016.

 

Ocean Wilsons Holdings Limited ("Ocean Wilsons") had a strong year, with the share price increasing 25.4% to March 2011. While revenue was up 20.4% to US$575.5m, the results were held back by the strong Brazilian Real. Most of Ocean Wilsons' income is based in US dollars. We are not convinced that Ocean Wilsons has the right corporate structure and will continue to push for change and the demerger of Wilson Sons, a 58.3% owned Brazilian maritime services provider.

 

Companhia de Saneamento de Minas Gerais ("Copasa"), our largest investment in the Brazilian water sector, performed well, with the share price up 18.3% over the 12 months. Water and sewage volumes were up 4.0% and revenues up 1.7% in the company's full year to December 2010.

 

AES Tiete ("AES"), a Brazilian hydro generator, had a poor share price performance, down 18.9% over the year to 31 March 2011. Net revenues were up 5.1% and net earnings up 4.4%. AES remains one of UEM's highest yielding stocks with a dividend yield of 8.9% for the December 2010 full year. AES offers a defensive outlook and distributes 100.0% of its earnings as dividends.

 

Companhia de Concessoes Rodoviarias ("CCR") share price has increased by 21.2% over the year to 31 March 2011. Full year company results to December 2010 have been reported in accordance with IFRS standards for the first time and included new revenue and cost components. The results reported vehicle volumes up 12.1% and core revenues up 20.4%.

 

The Philippines is pursuing a policy of improving its corporate governance, privatising infrastructure assets and changing legislation to enable the establishment of REITS. We expect these steps will benefit investors in the Philippines as economic activity rises. This approach, led by President Benigno Aquino III, will, in our view, benefit the wider Philippines economy.

 

International Container Terminal Services Inc ("ICT") based in Manila was a strong performer in the top ten, with its share price up 81.1% over the 12 months to 31 March 2011. Port volumes were up 18.1% to the year ending December 2010 and revenues increased 25.0%, with net income of US$97.9m up an impressive 78.8% on the year to December 2010. ICT is a well managed company focused on long term growth. We believe there is further substantial upside as they bring into operation a number of new ports around the world.

 

Eastern Water Resources PCL ("Eastwater") showed a 31.1% rise in its share price over the year to 31 March 2011. The company's full year results to December 2010 reported raw water sales up 11.0% and revenue increases of 62.4%.

 

Sichuan Expressway has reported increased toll volumes of 10.0% in the year to December 2010 with total revenue up 18.4% and net income up 38.4%. The share price was up 10.8% in the 12 months to 31 March 2011.

 

The geographic split of investments has not seen any major movement, with Brazil remaining our largest holding at 33.7%, China is down 1.3% to 20.3% due to disposals in China Mobile Limited, Zhejiang Expressway and Beijing Capital International Airport. Malaysia is third, down 4.6% to 17.2% due to disposals in Malaysia Airports and Integrax. Sectoral changes are also minimal, the most notable change being the increase in Ports to 23.0% as a result of strong share price movement in Ocean Wilsons, ICT, Santos and Integrax before its disposal.

 

Total investments of £87.5m were made in the 12 months under review, with proceeds from disposals amounting to £97.4m. The most notable transactions were the reduction of Malaysia Airports and exit from Integrax Berhad for £10.3m and £8.5m respectively. The largest investment of £5.4m was into Tractebel Energia, a Brazilian energy generation company.

 

CURRENCY

Currency has been a material factor for UEM. Over the year to 31 March 2011 the Brazilian Real, and Malaysian Ringgit appreciated by 3.7% and 1.9% respectively against Sterling.

 

BANK DEBT

Bank loans have been reduced to £10.2m since the March 2010 year end. The loan was drawn in US Dollars. The £25.0m multi-currency facility provided by HBOS remains available until March 2012 and will be utilised depending on investment opportunities and market conditions.

 

REVENUE RETURN

The revenue return remains a key feature of UEM. Revenue income was £15.2m compared to £13.7m last year, up 11.1%. This was achieved on a lower capital base, as bank debt for most of the year was lower than in past years. The revenue yield on the average portfolio gross assets is 4.1% and reflects the strong earnings growth in the portfolio.

 

Mainly as a result of the increase in gross assets by 14.2%, the management and administration fees increased by 18.2% to £0.8m and other expenses increased by 22.2% to £1.0m. The TER (including expenses charged to the capital return, but excluding the performance fee) remained at 0.8%.

 

Finance costs halved to £0.5m as a result of the reduced debt and the expiry of an interest rate swap.

 

Taxation has increased 9.8% to £1.0m despite our best efforts to reduce it. We continue to seek ways to minimise taxation on revenue.

 

Significantly, as a result of the increased revenue income and lower finance costs, the earnings per share increased to 5.61p (2010: 4.67p) up 20.1%.

 

CAPITAL RETURN

The portfolio gains on investment of £70.4m added to last year's gains of £112.5m. This was a pleasing outcome. Losses on derivative instruments of £5.5m arose mainly as a result of losses on the market hedging strategy.

 

We sharply curtailed our market hedging activity in the second half ending the year with a net position of £0.05m at 31 March 2011. While the losses are disappointing, this reflects the difficulty in maintaining a hedge position in rising markets.

 

As at year end, the market hedging position was 200 S&P 500 June 2011 put options at a strike price of 1100 providing hedge protection over a gross underlying asset value of $22m. However, these put options were well out of the money and, given the high cost of protection, the Investment Manager decided not to move the strike price up to be closer to the market. There was also a small matched (no net long or short position) of S&P call options that was in close-out mode.

 

Management and administration fees increased to £7.8m mainly due to the accrual of a performance fee of £6.5m. Finance costs halved to £1.3m as a result of lower average debt over the year, together with expiry of an interest rate swap.

 

Taxation on capital gains fell sharply from £2.3m to £0.8m, due to lower portfolio gains in investments in Brazil in the period.

 

The net result is a gain on the capital account of £54.6m.

 

BUYBACKS AND WARRANT AND S SHARE EXERCISE

UEM bought back 8.1m ordinary shares at a cost of £11.5m during the year, at an average share price of 141.90p, within a price range of 130.00p and 162.25p.

 

UEM also bought back 14.3m 2010 warrants and S shares at a cost of £4.8m within a price range of 30.00p to 35.00p.

 

Following the final warrant and S share exercise in August 2010, 23.4m new ordinary shares were issued.

 

The net result of the above buybacks, warrant and S shares exercise is that the number of ordinary shares in issue increased by 15.3m to 218,597,234.

 

We continue to believe that buybacks are an investment decision, as evidence in the wider markets suggests they have a modest impact only on the discount to NAV.

 

 



 

GROUP PERFORMANCE SUMMARY

 

 

 

 


 

31 March 2011

31 March 2010

Change %

 

 

 

 

Total return (1) (annual)

21.4%

44.0%

n/a

Annual compound total return

(since inception)

 

13.8%

 

12.4%

 

n/a

 

 

 

 

Net asset value per ordinary share

175.28p

148.37p(2)

18.1

Ordinary share price

157.75p

132.00p

19.5

Discount

(10.0%)

(11.0%)

n/a

 

 

 

 

Earnings per ordinary share (basic)

 

 

 

- Capital

25.63p

48.57p

(47.2)

- Revenue

5.61p

4.67p

20.1

- Total

31.24p

53.24p

(41.3)

Dividends per ordinary share

 

 

 

- Interim

3.75p

3.75p

-

- Final

1.45p(3)

1.05p

38.1

- Total

5.20p

4.80p

8.3

 

 

 

 

Equity holders' funds (£m)

383.2

319.9

19.8

Gross assets (£m)(4)

393.4

344.5

14.2

 

 

 

 

Cash/(overdraft) (£m)

(0.7)

2.0

n/a

Bank debt (£m)

(10.2)

(24.7)

(58.7)

Net Debt (£m)

(10.9)

(22.7)

(52.0)

Net debt gearing on gross assets

2.8%

6.6%

n/a

 

 

 

 

Management and administration fees (£m) (5)

 

 

 

- excluding performance fee

3.1

2.5

24.0

- including performance fee

9.6

2.5

n/a

Total expense ratio (6)

 

 

 

- excluding performance fee

0.8%

0.8%

n/a

- including performance fee

2.5%

0.8%

n/a

 

(1)   Total return is calculated based on diluted NAV per share return plus dividends reinvested from the ex-dividend date

(2)   31 March 2010 based on diluted net asset value

(3)   The final dividend declared has not been included as a liability in these accounts

(4)   Gross assets less liabilities excluding loans

(5)   Including other expenses for both revenue and capital returns

(6)   Management and administration fees over monthly average gross assets

 

 

 

 

 

 



 

Investing Policy

 

The Company's investing policy is to provide long-term total return by investing predominantly in infrastructure, utility and related sectors (including other investment companies investing in those companies) mainly in emerging markets. The Company's investing policy is flexible and permits it to make investments predominantly in infrastructure, utility and related sectors, including (but not limited to) water, sewerage, waste, electricity, gas, telecommunications, ports, airports, service companies, rail, roads, any business with essential service or monopolistic characteristics and in any new infrastructure or utilities which may arise mainly in emerging markets. The Company may also invest in businesses which supply services to, or otherwise support, the infrastructure, utilities and related sectors.

 

The Company focuses on the undeveloped and developing markets of Asia, Latin America, Emerging Europe and Africa but has the flexibility to invest in markets worldwide. The Company generally seeks to invest in emerging market countries where the Directors believe that there are attributes such as political stability, economic development, an acceptable legal framework and an encouraging attitude to foreign investment.

 

The Board and Investment Manager review the risk profile of the Company every six months. Agreed risk parameters are established and compliance is reviewed at the quarterly board meetings.

 

There will be no material change to the investing policy without prior shareholder approval.

 

Borrowings

Borrowings at the time of draw down must not result in gearing (being total borrowings measured against gross assets) exceeding 25.0%. Borrowings will be drawn down in Sterling, US Dollars or any currency for which there is a corresponding asset within the portfolio (at the time of drawing down the value drawn must not exceed the value of the corresponding asset in the portfolio).

 

Unquoted investments

Unquoted and untraded investments (excluding GERP) must not exceed 10% of the gross assets at the time the investment is made.

 

Single investment

No single investment may exceed 20.0% of the gross assets at the time of investment. Investments other than in infrastructure, utility and related companies (including GERP) are limited in total to 20.0% of the gross assets. Investments in a single country must not exceed 50.0% of the gross assets at the time the investment is made.

 

Hedging

The Investment Manager may follow a policy of actively hedging the market and balance sheet risks faced by UEM.

 

A review of the investment portfolio, borrowings and hedging is included in the Investment Manager's Report within these accounts.



DIRECTORS' STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES

 

Risks material to the Company, which have been identified and are monitored as part of the control process, include excessive gearing, inappropriate long-term investment strategy, asset allocation and loss of management personnel. Control of the risks identified cover financial, operational, compliance and overall risk management.

 

These risks and the way they are mitigated are described in more detail under the heading Internal Controls and Management of Risk in the Corporate Governance section of the Company's Annual Report for the year ended 31 March 2011. The Annual Report is published on the Company's website, www.uem.bm.

 

DIRECTORS' STATEMENT OF RESPONSIBILITIES

 

The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable Bermuda law and IFRSs as adopted by the European Union.

 

The Directors are required to prepare accounts for each financial year which present fairly the financial position, financial performance and cash flows of the Group and of the Company for that year. In preparing the accounts the Directors are required to:

 

·      select suitable accounting policies and then apply them consistently;

·      make judgements and estimates that are reasonable and prudent;

·      state whether IFRSs have been followed, subject to any material departure disclosed and explained in the Accounts; and

·      prepare the Accounts on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Accounts comply with Bermuda law. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for prevention and detection of fraud and other irregularities.

 

To the best of the knowledge of the Directors, the Accounts give a true and fair view of the assets, liabilities, financial position and profit of the Company and its special purpose entity included in the consolidation, and the Corporate Governance Statement includes a description of the principal risks and uncertainties that the Group and the Company faces. The financial risks are also provided in Note 31 to the Accounts.

 

Insofar as the Directors are aware:

 

·      there is no relevant audit information of which the Company's auditors are unaware; and

·      the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

 

The Annual Report and Accounts are published on the Company's website, www.uem.bm, the maintenance and integrity of which is the responsibility of the Company. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of the website and accordingly, the Auditors accept no responsibility for any changes that have occurred in the Accounts since they were originally presented on the website. Visitors to the website need to be aware that the legislation governing the preparation and dissemination of the financial statements may differ from legislation in their jurisdiction.

 

 

 



GROUP STATEMENT OF COMPREHENSIVE INCOME

 

                                                                                                                             

 

2011

2010

 

 

Revenue

Capital

Total

Revenue

Capital

Total

 

 

return

return

Return

return

return

return

 

 

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

 

 

 

 

 

 

 

 

Gains and losses on investments

 

-

70,427

70,427

-

112,515

112,515

Gains and losses on derivative

instruments

 

 

-

 

(5,461)

 

(5,461)

 

-

 

(4,426)

 

(4,426)

Exchange gains and losses

 

-

(433)

(433)

-

1,544

1,544

Investment and other income

 

15,190

-

15,190

13,671

-

13,671

Total income

 

15,190

64,533

79,723

13,671

109,633

123,304

Income not receivable

 

-

-

-

(261)

-

(261)

Management and administration fees

 

(773)

(7,790)

(8,563)

(654)

(1,037)

(1,691)

Other expenses

 

(963)

(26)

(989)

(788)

(22)

(810)

Profit before finance costs and taxation

 

13,454

56,717

70,171

11,968

108,574

120,542

Finance costs

 

(547)

(1,277)

(1,824)

(1,150)

(2,683)

(3,833)

Profit before taxation

 

12,907

55,440

68,347

10,818

105,891

116,709

Taxation

 

(951)

(805)

(1,756)

(866)

(2,331)

(3,197)

Profit for the year

 

11,956

54,635

66,591

9,952

103,560

113,512

 

 

 

 

 

 

 

 

Earnings per share (basic) - pence

 

5.61

25.63

31.24

4.67

48.57

53.24

Earnings per share (diluted) - pence

 

5.50

25.13

30.63

4.53

47.13

51.66

 

The total column of this statement represents the Group's Income Statement and the Group's Statement of Comprehensive Income, prepared in accordance with IFRS.

The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies in the UK.

The Group does not have any income or expense that is not included in the profit for the year, and therefore the 'profit for the year' is also the 'total comprehensive income for the year', as defined in International Accounting Standard 1 (revised).

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the Company. There are no minority interests.



COMPANY STATEMENT OF COMPREHENSIVE INCOME

 

                                                                                                                             

 

2011

2010

 

 

Revenue

Capital

Total

Revenue

Capital

Total

 

 

return

return

return

return

return

return

 

 

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

 

 

 

 

 

 

 

 

Gains and losses on investments

 

-

63,852

63,852

-

105,824

105,824

Gains and losses on derivative

instruments

 

 

-

 

1,078

 

1,078

 

-

 

2,243

 

2,243

Exchange gains and losses

 

-

(418)

(418)

-

1,529

1,529

Investment and other income

 

15,190

-

15,190

13,671

-

13,671

Total income

 

15,190

64,512

79,702

13,671

109,596

123,267

Income not receivable

 

-

-

-

(261)

-

(261)

Management and administration fees

 

(773)

(7,790)

(8,563)

(654)

(1,037)

(1,691)

Other expenses

 

(942)

(26)

(968)

(751)

(22)

(773)

Profit before finance costs and taxation

 

13,475

56,696

70,171

12,005

108,537

120,542

Finance costs

 

(547)

(1,277)

(1,824)

(1,150)

(2,683)

(3,833)

Profit before taxation

 

12,928

55,419

68,347

10,855

105,854

116,709

Taxation

 

(951)

(805)

(1,756)

(866)

(2,331)

(3,197)

Profit for the year

 

11,977

54,614

66,591

9,989

103,523

113,512

 

 

 

 

 

 

 

 

Earnings per share (basic) - pence

 

5.62

25.62

31.24

4.68

48.56

53.24

Earnings per share (diluted) - pence

 

5.51

25.12

30.63

4.54

47.12

51.66

 

The total column of this statement represents the Company's Income Statement and the Company's Statement of Comprehensive Income, prepared in accordance with IFRS.

The supplementary revenue and capital return columns are both prepared under guidance published by the Association of Investment Companies in the UK.

The Company does not have any income or expense that is not included in the profit for the year, and therefore the 'profit for the year' is also the 'total comprehensive income for the year', as defined in International Accounting Standard 1 (revised).

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of the Company.



GROUP STATEMENT OF CHANGES IN EQUITY

 

 

for the year to 31 March 2011
















Ordinary

Share



S

Other non-

Retained earnings



share

premium

Special

Warrant

share

distributable

Capital

Revenue



capital

account

reserve

reserve

reserve

reserve

reserves

reserve

Total


£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s











Balance at

31 March

2010

 

 

20,331

 

 

-

 

 

206,394

 

 

8,089

 

 

8,729

 

 

994

 

 

72,378

 

 

2,967

 

 

319,882

Profit for the

year

 

-

 

-

 

-

 

-

 

-

 

-

 

54,635

 

11,956

 

66,591

Ordinary

dividends

paid

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(10,354)

 

 

(10,354)

Conversion of

warrants and

S shares

 

 

2,339

 

 

21,044

 

 

-

 

 

(5,144)

 

 

(4,955)

 

 

10,099

 

 

-

 

 

-

 

 

23,383

Shares and

warrants

purchased

by the

Company

 

 

 

 

(810)

 

 

 

 

(8,908)

 

 

 

 

(1,807)

 

 

 

 

(2,945)

 

 

 

 

(3,774)

 

 

 

 

-

 

 

 

 

1,893

 

 

 

 

-

 

 

 

 

(16,351)

Balance at

31 March

2011

 

 

21,860

 

 

12,136

 

 

204,587

 

 

-

 

 

-

 

 

11,093

 

 

128,906

 

 

4,569

 

 

383,151

 

 

 

for the year to 31 March 2010
















Ordinary

Share



S

Other non-

Retained earnings



share

premium

Special

Warrant

share

distributable

Capital

Revenue



capital

account

reserve

reserve

reserve

reserve

reserves

reserve

Total


£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s











Balance at

31 March

2009

 

 

21,412

 

 

56

 

 

219,500

 

 

8,897

 

 

9,285

 

 

319

 

 

(31,451)

 

 

2,715

 

 

230,733

Profit for the

year

 

-

 

-

 

-

 

-

 

-

 

-

 

103,560

 

9,952

 

113,512

Ordinary

dividends

paid

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(9,700)

 

 

(9,700)

Conversion of

warrants and

S shares

 

 

177

 

 

1,594

 

 

-

 

 

(423)

 

 

(252)

 

 

675

 

 

-

 

 

-

 

 

1,771

Shares and

warrants

purchased

by the

Company

 

 

 

 

(1,258)

 

 

 

 

(1,650)

 

 

 

 

(13,106)

 

 

 

 

(385)

 

 

 

 

(304)

 

 

 

 

-

 

 

 

 

269

 

 

 

 

-

 

 

 

 

(16,434)

Balance at

31 March

2010

 

 

20,331

 

 

-

 

 

206,394

 

 

8,089

 

 

8,729

 

 

994

 

 

72,378

 

 

2,967

 

 

319,882



COMPANY STATEMENT OF CHANGES IN EQUITY

 

 

for the year to 31 March 2011
















Ordinary

Share



S

Other non-

Retained earnings



share

premium

Special

Warrant

share

distributable

Capital

Revenue



capital

account

reserve

reserve

reserve

reserve

reserves

reserve

Total


£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s











Balance at

31 March

2010

 

 

20,331

 

 

-

 

 

206,394

 

 

8,089

 

 

8,729

 

 

994

 

 

72,305

 

 

3,040

 

 

319,882

Profit for the

year

 

-

 

-

 

-

 

-

 

-

 

-

 

54,614

 

11,977

 

66,591

Ordinary

dividends

paid

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(10,354)

 

 

(10,354)

Conversion of

warrants and

S shares

 

 

2,339

 

 

21,044

 

 

-

 

 

(5,144)

 

 

(4,955)

 

 

10,099

 

 

-

 

 

-

 

 

23,383

Shares and

warrants

purchased

by the

Company

 

 

 

 

(810)

 

 

 

 

(8,908)

 

 

 

 

(1,807)

 

 

 

 

(2,945)

 

 

 

 

(3,774)

 

 

 

 

-

 

 

 

 

1,893

 

 

 

 

-

 

 

 

 

(16,351)

Balance at

31 March

2011

 

 

21,860

 

 

12,136

 

 

204,587

 

 

-

 

 

-

 

 

11,093

 

 

128,812

 

 

4,663

 

 

383,151

 

 

 

for the year to 31 March 2010
















Ordinary

Share



S

Other non-

Retained earnings



share

premium

Special

Warrant

share

distributable

Capital

Revenue



capital

account

reserve

reserve

reserve

reserve

reserves

reserve

Total


£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s

£'000s











Balance at

31 March

2009

 

 

21,412

 

 

56

 

 

219,500

 

 

8,897

 

 

9,285

 

 

319

 

 

(31,487)

 

 

2,751

 

 

230,733

Profit for

the year

 

-

 

-

 

-

 

-

 

-

 

-

 

103,523

 

9,989

 

113,512

Ordinary

dividends

paid

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(9,700)

 

 

(9,700)

Conversion of

warrants and

S shares

 

 

177

 

 

1,594

 

 

-

 

 

(423)

 

 

(252)

 

 

675

 

 

-

 

 

-

 

 

1,771

Shares and

warrants

purchased

by the

Company

 

 

 

 

(1,258)

 

 

 

 

(1,650)

 

 

 

 

(13,106)

 

 

 

 

(385)

 

 

 

 

(304)

 

 

 

 

-

 

 

 

 

269

 

 

 

 

-

 

 

 

 

(16,434)

Balance at

31 March

2010

 

 

20,331

 

 

-

 

 

206,394

 

 

8,089

 

 

8,729

 

 

994

 

 

72,305

 

 

3,040

 

 

319,882

 



BALANCE SHEETS

 

 

GROUP

COMPANY

at 31 March

2011

2010

2011

2010

 

£'000s

£'000s

£'000s

£'000s

Non-current assets

 

 

 

 

Investments

403,026

342,451

403,098

344,540

Current assets

 

 

 

 

Other receivables

2,418

5,408

2,418

5,406

Derivative financial instruments

1,769

1,969

-

-

Cash and cash equivalents

211

1,974

192

1,854

 

4,398

9,351

2,610

7,260

Current liabilities

 

 

 

 

Bank loans

(10,231)

-

(10,231)

-

Other payables

(8,612)

(3,085)

(8,612)

(3,083)

Derivative financial instruments

(3,153)

(2,515)

(1,437)

(2,515)

 

(21,996)

(5,600)

(20,280)

(5,598)

Net current (liabilities)/assets

(17,598)

3,751

(17,670)

1,662

Total assets less current liabilities

385,428

346,202

385,428

346,202

Non-current liabilities

 

 

 

 

Bank loans

-

(24,659)

-

(24,659)

Deferred tax

(2,277)

(1,661)

(2,277)

(1,661)

Net assets

383,151

319,882

383,151

319,882

 

 

 

 

 

Equity attributable to equity holders

 

 

 

 

Ordinary share capital

21,860

20,331

21,860

20,331

Share premium account

12,136

-

12,136

-

Special reserve

204,587

206,394

204,587

206,394

Warrant reserve

-

8,089

-

8,089

S share reserve

-

8,729

-

8,729

Other non-distributable reserve

11,093

994

11,093

994

Capital reserves

128,906

72,378

128,812

72,305

Revenue reserve

4,569

2,967

4,663

3,040

Total attributable to equity holders

383,151

319,882

383,151

319,882

 

 

 

 

 

Net asset value per ordinary share

 

 

 

 

Basic - pence

175.28

157.33

175.28

157.33

 

 

 

 



STATEMENTS OF CASH FLOWS

 

 

GROUP

COMPANY

for the year to 31 March

2011

2010

2011

2010

 

£'000s

£'000s

£'000s

£'000s

Cash flows from operating activities

15,467

17,886

15,554

18,069

Cash flows from investing activities

-

-

-

-

Cash flows before financing activities

15,467

17,886

15,554

18,069

Financing activities:

Ordinary dividends paid

 

(10,354)

 

(9,700)

 

(10,354)

 

(9,700)

Movements from loans

(14,576)

(16,341)

(14,576)

(16,341)

Proceeds from warrants converted

Proceeds from S shares converted

Cost of ordinary shares purchased

Cost of warrants purchased

Cost of S shares purchased

18,497

4,886

(11,525)

(3,612)

(1,214)

1,522

249

(16,014)

(330)

(90)

18,497

4,886

(11,525)

(3,612)

(1,214)

1,522

249

(16,014)

(330)

(90)

Cash flows from financing activities

(17,898)

(40,704)

(17,898)

(40,704)

 

 

 

 

 

Net movement in cash and cash

equivalents

 

(2,431)

 

(22,818)

 

(2,344)

 

(22,635)

Cash and cash equivalents at the

beginning of the year

 

1,974

 

24,058

 

1,854

 

23,770

Effect of movement in foreign exchange

(285)

734

(271)

719

Cash and cash equivalents at the

end of the year

 

(742)

 

1,974

 

(761)

 

1,854

 

 

Comprised of:

 

 

 

 

Cash

211

1,974

192

1,854

Bank overdraft

(953)

-

(953)

-

Total

(742)

1,974

(761)

1,854

 

NOTES

 

The Directors have declared a final dividend in respect of the year ended 31 March 2011 of 1.45p per ordinary share payable on 15 July 2011 to shareholders on the register at close of business on 1 July 2011. The total cost of the dividend which has not been accrued in the results for the year to 31 March 2011, is £3,125,000 based on 215,528,793 ordinary shares in issue at the date of this statement.

 

This statement was approved by the Board on 20 June 2011. It is not the Group's or Company's statutory accounts. The statutory accounts for the financial year ended 31 March 2011 have been approved and audited, and received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The statutory accounts for the financial year ended 31 March 2010 received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.

 

The Report & Accounts for the year ended 31 March 2011 will be posted to shareholders in late June 2011. In accordance with AIM Rule 26, a copy is available to view and download from the Company's website at www.uem.bm. Copies may also be obtained during normal business hours from Exchange House, Primrose Street, London, EC2A 2NY.

 

 

 

By order of the Board

F&C Management Limited, Secretary

20 June 2011


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