|Sociedade :||Invesco||Compartimento :||Outro|
|ISIN :||GB0001282697||Difusor :||PR Newswire|
|Tipo de documento :||Comunicados de informaçao permanente / Vida da empresa|
|Data de publicação :||6/7/2012 9:49:00 AM|
Annual Financial Report
Perpetual Income and Growth Investment Trust plc Annual Financial Report Announcement for the Year Ended 31 March 2012 FINANCIAL INFORMATION and performance statistics The Benchmark Index of the Company is the FTSE All-Share Index. AT AT 31 MARCH 31 MARCH % 2012 2011 CHANGE Total return (all income reinvested): Diluted net assets(1) +8.4 Benchmark(1) +1.4 Diluted net asset value per ordinary share: - after charging all dividends for the year 264.2p 252.8p +4.5 (capital NAV) - as balance sheet 267.4p 255.5p +4.7 Shareholders' funds (£'000) 579,908 545,341 +6.3 Mid-market price per: - ordinary share 267.7p 252.8p +5.9 - subscription share 42.5p 40.0p +6.3 (Premium)/discount per ordinary share (0.1)% 1.1% Capital return Benchmark(1) -2.1 Return per ordinary share: Diluted revenue return 10.86p 9.85p Diluted capital return 11.61p 22.95p Diluted total return 22.47p 32.80p Dividend per ordinary share: First interim dividend 2.40p 2.20p Second interim dividend 2.40p 2.20p Third interim dividend 2.40p 2.20p Fourth interim dividend 3.20p 2.75p Total dividend 10.40p 9.35p +11.2 Ongoing charges ratio Excluding performance fee 1.00% 1.03% Performance Fee 0.16% - Gearing Gross gearing 18.0% 19.0% Net gearing 18.0% 19.0% Note: 1 Source: Thomson Reuters and Morningstar. CHAIRMAN'S STATEMENT Performance Over the 12 months from 1 April 2011 to 31 March 2012, the Company's shares produced a total return of 8.4% to shareholders, while the total return of the Company's benchmark for performance measuring purposes, the FTSE All-Share Index, was 1.4%. (All these figures are with income reinvested.) On 31 March 2012, the premium of the share price relative to net asset value (debt at par) was 0.1%. Further details can be found in the Investment Manager's Report, which follows. Dividend For the year ended 31 March 2012, three interim dividends of 2.4p each were paid to shareholders in September and December 2011, and March 2012, and a fourth interim dividend of 3.2p will be paid on 29 June 2012. This gives a total dividend for the year of 10.4p, representing an increase of 11.2% on the previous year. The Board's aim remains for the Company to maintain its policy of real dividend growth over the medium term. Gearing The gearing of the Company was 18% at the year end (2011: 19%). The Board's policy is to allow gearing up to a level of 25%. During the year ended 31 March 2012, gearing was provided by maximum bank borrowings of £100 million and debentures of £30 million. Further information relating to the Company's gearing policy can be found in the Annual Financial Report. Subscription Share Exercise During the year under review, subscription shareholders had their fifth opportunity to exercise their right to subscribe for one ordinary share of the Company at a price of 218.94p. The subscription period ended on 31 August 2011. As a result, 491,203 shares were allotted on 13 September 2011. Subscription shareholders will have further opportunities to convert their holdings in 2012 and 2013. Annual General Meeting (`AGM') Shareholders' attention is drawn to the special business in the Notice of Meeting which includes the usual renewal of powers to issue and buy back shares and to allow application of the minimum notice required for general meetings (other than the annual general meeting) by the Companies Act 2006,and in addition, a resolution to adopt new Articles of Association. This is prompted by the introduction of new investment trust tax rules, which came into effect for the Company on 1 April 2012 and which, amongst other things, no longer prohibit investment trust companies from distributing capital profits by way of dividend. The changes to the Articles will enable the Company to take advantage of the added flexibility allowed by the new tax rules, however the Directors have no current intention to distribute capital profits as dividends. The opportunity has additionally been taken to update the articles generally to reflect current law and best practice. The Directors have carefully considered all the resolutions proposed in the Notice of the AGM contained in the Annual Financial Report and, in their opinion, consider them all to be in the interests of shareholders as a whole. The Directors therefore recommend that shareholders vote in favour of each resolution. The AGM of the Company will be held at Perpetual Park, Henley-on-Thames, Oxfordshire RG9 1HH on Thursday 12 July 2012 at 11.00 am. I do hope that as many shareholders as possible are able to attend. The Directors and the Portfolio Manager, Mr Mark Barnett, will be available at the meeting to answer shareholder questions. Bill Alexander Chairman 7 June 2012 INVESTMENT MANAGER'S REPORT Market Review A total return of 1.4% by the FTSE All-Share Index over the 12 months masked some major swings in sentiment and significant stock market volatility. The optimistic mood in which markets had started 2011 diminished as the year progressed and global events, particularly the Eurozone sovereign debt and banking crisis, dominated UK stock market sentiment. The three months ending September 2011 witnessed the worst quarterly performance by the index since 2002. The stock market saw a strong recovery into the end of 2011, driven by a significant shift in policy by the European Central Bank (ECB), which announced its longer-term refinancing operation (LTRO). This provided liquidity to the banking system and was seen as removing the near term risk of a major European banking crisis. The pattern continued into 2012, as the UK stock market rose following improved economic news from the US along with a second round of LTRO from the ECB. The last month of the period, however, saw optimism waning and some profit taking, as doubts re-emerged about the strength of the global economic recovery and the longer term resolution of the Eurozone debt crisis. Portfolio Strategy and Review The Company's net asset value, including reinvested dividends, rose by 8.4% during the period, compared to a rise of 1.4% by the FTSE All-Share Index. Against such a turbulent stock market backdrop, the positioning of the Company provided a healthy positive absolute return while also mitigating a large amount of the volatility, thereby protecting capital. Positive contributions to performance came from a spread of the fund's largest investments in companies that have historically exhibited dependable earnings and dividend growth. The tobacco sector, in particular, continued to deliver outperformance. The holdings in British American Tobacco, Imperial Tobacco and Reynolds American delivered returns in excess of 30% over the 12 months, as investors again focused on the sector's reliable characteristics and cash flow. The Company is heavily invested in the pharmaceutical sector, which also performed well over the year. This was particularly the case for the holding in GlaxoSmithKline, which announced a 15% increase in its share buy-back during the year as well as confirming that 10 new drugs are likely to be filed for regulatory approval in 2012. This announcement surprised the market, which had given up on the industry's ability to discover new drugs. The Company's holdings in two European pharmaceuticals Roche and Novartis, also helped performance and gained additionally from the strength of the Swiss franc. While the performance of AstraZeneca was poorer by comparison, but the total return from the holding still exceeded that of the index over the 12 months. The holding in BT again delivered positive returns. As well as pleasing the stock market with news that its roll-out of high speed broadband is progressing faster than expected, the company announced that it had reached an agreement with its pension scheme trustees on a reduction plan for the scheme's deficit. This should allow BT greater flexibility to increase future returns to shareholders. The relative performance of the Company also benefited from its zero weighting in the large mining sector. This sector fell sharply over the 12 months as concerns over the outlook for global economic growth weighed on metal prices and profit forecasts. Newsflow over the period from the Company's major holdings was mostly positive. This was not, however, the case for Tesco. The company's trading update and profit warning suggested that too much confidence had been placed in the business's ability to cope with the economic headwinds and also a realisation that some of the company's investment decisions of recent years have not created the value originally envisaged. For example, the programme to build much larger stores to cope with an expanding product range has coincided with a more rapid consumer migration to internet shopping. There was also disappointing news from the investment in Chemring - the company announced that unexpected delays in customer orders would hit full year revenues and profits. A negative impact on performance came from the holding in Homeserve, the share price of which fell sharply on news last October that, following an independent review, the company had decided to suspend part of its sales operation pending a re-training of its telephone sales staff. Both holdings have been retained, the share prices are now reflecting more pessimism than the recent news flows and are looking undervalued. In terms of portfolio activity, it is noteworthy that overall activity was limited as the manager's views on the UK stock market and the wider economy were largely unaltered. The position in Tesco was sold for the reasons outlined above. The holdings in Altria, Balfour Beatty and Daily Mail & General Trust were also sold. New investments were made in Doric Nimrod Air Two, Filtrona, Lancashire Holdings, Novartis, Regus, Rolls Royce and TalkTalk Telecom. Outlook In many respects the recent performance of the UK stock market has borne a strong similarity to the early months of last year. It is likely that these similarities will continue for the foreseeable future as there remains a high correlation between equity market returns and Government stimulus measures in the form of Quantitative Easing or Central Bank liquidity schemes. The market will remain extremely sensitive to changes in the future direction of this kind of stimulus. Ultimately these measures are likely to be seen as only symptomatic relief of the problems rather that addressing the cause; an excess of debt across the developed world. However, it has become increasingly clear that the equity asset class in this environment is highly attractive relative to bonds or cash, notwithstanding the extra volatility which accompanies it. Through this period of Government stimulus, the underlying performance of the companies within the market has begun to polarise, whereby companies with specific characteristics have become more highly valued. The most valued characteristics include earnings reliability, financial strength, sustainable growing dividends and geographic diversification. The portfolio has the advantage of the relative strength of the UK stock market towards companies that exhibit these features both within the largest companies and increasingly within the mid-caps as well. The fund will also continue to take advantage of overseas equities which fit these criteria. This theme remains in place as it is likely that the re-rating of these stocks will be maintained against a backdrop of little or no growth in the economies of the developed world, due to the intractable nature of the debt problem in these economies and the glacial pace at which incumbent governments are acting. It may well be the case that, given the volatile nature of equity markets in the short term, a higher proportion of the shareholders' return will be received in the form of income. However, the risk of owning these stocks is low and the inherent nature of markets means that undervalued companies delivering a sustainably growing level of dividend income will not remain unnoticed forever. Mark Barnett Investment Manager 7 June 2012 INVESTMENTS IN ORDER OF VALUATION at 31 March 2012 Ordinary shares listed in the UK unless stated otherwise MARKET VALUE % OF ISSUER SECTOR £'000 PORTFOLIO Equity Investments BT Fixed Line Telecommunications 37,838 5.5 Imperial Tobacco Tobacco 37,375 5.5 British American Tobacco Tobacco 34,594 5.1 Reynolds American (US Tobacco 33,594 4.9 common stock) GlaxoSmithKline Pharmaceuticals & Biotechnology 31,127 4.6 Vodafone Mobile Telecommunications 29,075 4.3 BG Oil & Gas Producers 28,424 4.2 AstraZeneca Pharmaceuticals & Biotechnology 26,319 3.9 Roche (Swiss common stock) Pharmaceuticals & Biotechnology 24,859 3.6 BAE Systems Aerospace & Defence 23,161 3.4 Top ten holdings 306,366 45.0 Reckitt Benckiser Household Goods & Home 22,282 3.3 Construction Babcock International Support Services 21,468 3.1 Provident Financial Financial Services 16,758 2.5 Hiscox Non-life Insurance 16,340 2.4 Centrica Gas, Water & Multiutilities 16,058 2.3 Capita Support Services 15,103 2.2 Compass Travel & Leisure 14,663 2.1 International Power Gas, Water Multiutilities 13,590 2.0 BTG Pharmaceuticals & Biotechnology 13,445 2.0 Amlin Non-life Insurance 12,712 1.9 Top twenty holdings 468,785 68.8 KCOM Fixed Line Telecommunications 12,515 1.8 Drax Electricity 12,407 1.8 Pennon Gas, Water & Multiutilities 12,346 1.8 Rentokil Initial Support Services 11,461 1.7 Beazley Non-life Insurance 11,022 1.6 Novartis (Swiss common Pharmaceuticals & Biotechnology 9,981 1.5 stock) Wm Morrison Supermarkets Food & Drug Retailers 9,836 1.4 Napo Pharmaceuticals(3) Pharmaceuticals & Biotechnology 9,359 1.4 Ladbrokes Travel & Leisure 9,033 1.3 Serco Support Services 8,574 1.3 Top thirty holdings 575,319 84.4 SSE Electricity 8,370 1.2 TalkTalk Telecom Fixed Line Telecommunications 8,318 1.2 Tate & Lyle Food Producers 7,591 1.1 Chemring Aerospace & Defence 7,181 1.0 Homeserve Support Services 5,922 0.9 Brown (N) General Retailers 5,765 0.8 Lombard Medical Healthcare Equipment & Services 4,755 0.7 Technologies Doric Nimrod Air Two Equity Investment Instruments 4,666 0.7 Workspace Real Estate Investment & 4,207 0.6 Services Impax Asian Environment Equity Investment Instruments 4,067 0.6 Markets - ordinary & subscription shares Top forty holdings 636,161 93.2 Equity Investments Impax Environmental Equity Investment Instruments 4,018 0.6 Markets Filtrona Support Services 3,847 0.6 Rolls Royce Aerospace & Defence 3,768 0.5 Fusion IP Financial Services 3,467 0.5 Damille Investments II Equity Investment Instruments 3,410 0.5 Imperial Innovations Financial Services - convertible `B' shares 1,636 0.4 (3) - ordinary shares 1,362 Vectura Pharmaceuticals & Biotechnology 2,662 0.4 Lancashire Non-life Insurance 2,528 0.4 Altus Resource Equity Investment Instruments 2,523 0.4 Damille Investments Equity Investment Instruments 2,465 0.4 Top fifty holdings 667,847 97.9 Macau Property Real Estate Investment & 2,206 0.3 Opportunities Fund Services PuriCore Healthcare Equipment & Services 1,467 0.2 XCounter AB (Swedish Healthcare Equipment & Services 1,291 0.2 common stock) UK Coal Mining 1,131 0.1 Trading Emissions Financial Services 858 0.1 Regus Support Services 731 0.1 Halosource Chemicals 719 0.1 Renovo Pharmaceuticals & Biotechnology 517 0.1 Yell Media 515 0.1 XTL Biopharmaceutical (US Pharmaceuticals & Biotechnology 312 - ADR) Top sixty holdings 677,594 99.2 Walton & Co(3) Banks 157 - Helphire Financial Services 74 - Mirada Media 11 - Ecofin Water & Power Equity Investment Instruments - - Opportunities Total Equity Investments 677,836 99.2 (64) MARKET MOODY/S&P VALUE % OF ISSUER AND ISSUE RATING(1) SECTOR £'000 PORTFOLIO Other Investments Lombard Medical Technologies 8% NR/NR Healthcare 2,100 0.3 01 Sep 2013(3) Equipment & Services Barclays Bank - Nuclear Power NR/NR Electricity 1,678 0.2 Notes 28 Feb 2019(2) PuriCore Convertible Loan Notes NR/NR Healthcare 1,500 0.2 6% 31 Dec 2013(3) Equipment & Services Ecofin Water & Power NR/NR Equity 465 0.1 Opportunities 6% 31 Jul 2016 Investment Instruments Total Other Investments (4) 5,743 0.8 Total Investments (68) 683,579 100.0 Notes: (1) NR is non-rated. (2) Contingent Value Rights (`CVRs') referred to as Nuclear Power Notes (`NPNs') were offered by EDF as a partial alternative to cash in its bid for British Energy (`BE'). The NPNs were issued by Barclays Bank. The CVRs participate in BE's existing business at the time of the takeover. (3) Unquoted security. REPORT OF THE DIRECTORS Principal Risks and Uncertainties Investment Objective There can be no guarantee that the Company will meet its investment objective. Market Risk As at 31 March 2012, a majority the Company's investments were traded on the London Stock Exchange. The prices of securities and the income derived from them are influenced by many factors such as general economic conditions, interest rates, inflation, political events, and government policies as well as by supply and demand reflecting investor sentiment. In addition, over the coming months there is the risk that European policy makers fail to restore market confidence by implementing an effective and lasting solution to the Eurozone crisis. Such factors are outside the control of the Board and Manager and may give rise to high levels of volatility in the prices of investments held by the Company. Investment Risk Bad performance of individual portfolio investments is mitigated as the Board has established guidelines to ensure that the Investment Policy of the Company is pursued by the portfolio manager who undertakes continual analysis of the fundamentals of all holdings and ensures that the Company's portfolio of investments is appropriately diversified. The performance of the portfolio manager is carefully monitored by the Board and the continuation of the management contract is reviewed each year. Past performance of the Company is not necessarily indicative of future performance. A fuller discussion of the economic and market conditions facing the Company and the current and future performance of the portfolio of the Company are included in the Investment Manager's Report. Shares The market value of the shares in the Company may not reflect their underlying net asset value (`NAV') and may trade at a discount to it. The Board and the Manager maintain an active dialogue with the aim of ensuring that the market rating of the Company's shares reflects the underlying NAV and there are in place both share repurchase and issuance facilities to help the management of this process. As at 31 March 2012 shares in the Company traded at a premium of 0.1% (2011: discount 1.1%). The value of an investment in the Company and the income derived from that investment may go down as well as up and an investor may not get back the amount invested. While it is the intention of the Directors to pay dividends to shareholders quarterly, the ability to do so will depend upon the level of income received from securities and the timing of receipt of such income by the Company. Accordingly, the amount of quarterly dividends paid to shareholders may fluctuate. Any change in the tax or accounting treatment of dividends or other investment income received by the Company may also affect the level of dividend paid on the shares in future years. Gearing Whilst the use of borrowings by the Company should enhance the total return on the ordinary shares where the return on the Company's underlying securities is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is falling. Regulatory The Company is subject to various laws and regulations by virtue of its status as a public limited company registered under section 833 of the Act, its status as an investment trust, and its listing on the Official List of the UK Listing Authority. Loss of investment trust status for tax purposes could lead to the Company being subject to tax on the realised capital profits on the sale of its investments. A serious breach of other regulatory rules could lead to suspension from the Official List, a fine or qualified audit report. Other control failures, either by the Manager or any other of the Company's service providers, could result in operational or reputational problems, erroneous disclosures or loss of assets through fraud, as well as breaches of regulations. The Manager reviews compliance with tax and other financial regulatory requirements on a daily basis. All transactions, income and expenditure are reported to the Board. The Board regularly considers all perceived risks and the measures in place to control them. The Board ensures that satisfactory assurances are received from service providers. The Manager's Compliance and internal Audit Officers produce reports regularly for review by the Company's Audit Committee. Reliance on Third Party Service Providers The Company has no employees and the Directors have all been appointed on a non-executive basis. The Company is reliant upon the performance of third party service providers for its executive function. The Company's most significant contract is with the Manager, to whom responsibility both for the Company's portfolio and for the provision of company secretarial and administrative services are delegated. The Company has other contractual arrangements with third parties to act as Auditor, Registrar, Custodian and Broker. Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to successfully pursue its investment policy and expose the Company to reputational risk. In particular, the Manager performs services which are integral to the operation of the Company. The Manager may be exposed to the risk that litigation, misconduct, operational failures, negative publicity and press speculation, whether or not it is valid, will harm its reputation. Any damage to the reputation of the Manager could result in counterparties and third parties being unwilling to deal with the Manager and by extension the Company. This could have an adverse impact on the ability of the Company to pursue its investment policy. The Board seeks to manage these risks in a number of ways: • The Manager monitors the performance of all third party providers in relation to agreed service standards on a regular basis, and any issues and concerns are dealt with promptly and reported to the Board. The Manager formally reviews the performance of all third party providers and reports to the Board on an annual basis. • The Board reviews the performance of the Manager at every board meeting and otherwise as appropriate. The Board has the power to replace the Manager and reviews the management contract formally once a year. • The day-to-day management of the portfolio is the responsibility of Mark Barnett, who has worked in equity markets since 1992 and has been the portfolio manager of the Company since 1999. The Board has adopted guidelines within which the portfolio manager is permitted wide discretion. Any proposed variation outside these guidelines is referred to the Board and the guidelines themselves are reviewed at every board meeting. • The risk that the portfolio manager might be incapacitated or otherwise unavailable is mitigated by the fact that he works within, and is supported by, the wider Invesco Perpetual UK Equity team. Other Risks The Company may be exposed to other business and strategic risks in the future, including fiscal, legal or regulatory changes, and the perceived impact of the designated Investment Manager ceasing to be involved with the Company. The instruments in which the Company's cash positions are invested are reviewed by the Board to ensure liquidity and concentration risks are adequately managed. Where an Invesco Group vehicle is utilised, it is assessed for suitability against other similar investment options. There is an ongoing process for the Board to consider these other risks. In addition, the composition of the Board is regularly reviewed to ensure the membership offers sufficient knowledge and experience to, as far as possible, assess and anticipate these risks. DIRECTORS' RESPONSIBILITY STATEMENT in respect of the preparation of the Annual Financial Report The Directors are responsible for preparing the annual financial report in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under the law the Directors have elected to prepare financial statements in accordance with UK Generally Accepted Accounting Practice. Under company law, the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, 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 applicable UK?accounting standards have been followed; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors confirm that they have complied with the above requirements in preparing the financial statements. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that the financial statements comply with the Companies Act 2006 (`CA 2006'). They are responsible for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, a Directors' Remuneration Report and a Corporate Governance Statement that comply with that law and those regulations. In so far as each of the Directors is aware: • there is no relevant audit information of which the Company's Auditor is 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 Auditor is aware of that information. This confirmation is given and should be interpreted in accordance with s418 of CA 2006. The Directors of the Company each confirm to the best of their knowledge, that: • the financial statements, prepared in accordance with UK Generally Accepted Accounting Practice, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and • this annual financial report includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that it faces. Signed on behalf of the Board of Directors Bill Alexander Chairman 7 June 2012 Income Statement for the year ended 31 march 2012 2011 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments at - 31,275 31,275 - 54,819 54,819 fair value Foreign exchange gains/ - 19 19 - (1,064) (1,064) (losses) Income - note 2 26,792 112 26,904 24,149 - 24,149 Investment management (1,496) (4,376) (5,872) (1,377) (3,213) (4,590) fees - note 3 Other expenses (545) (2) (547) (676) (1) (677) Net return before 24,751 27,028 51,779 22,096 50,541 72,637 finance costs and taxation Finance costs (887) (2,070) (2,957) (853) (1,989) (2,842) Return on ordinary 23,864 24,958 48,822 21,243 48,552 69,795 activities before tax Tax on ordinary (514) - (514) (421) - (421) activities Return on ordinary 23,350 24,958 48,308 20,822 48,552 69,374 activities after tax for the financial year Return per ordinary share: - note 4 Basic 10.99p 11.75p 22.74p 9.90p 23.09p 32.99p Diluted 10.86p 11.61p 22.47p 9.85p 22.95p 32.80p The total column of this statement represents the Company's profit and loss account, prepared in accordance with the accounting policies detailed in note 1 to the financial statements. The supplementary revenue and capital columns are presented for information purposes in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All items in the above statement derive from continuing operations and the Company has no other gains or losses therefore no statement of total recognised gains or losses is presented. No operations were acquired or discontinued in the year. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS for the year ended 31 March Share Share Capital Revenue capital premium reserve reserve Total £'000 £'000 £'000 £'000 £'000 At 31 March 2010 21,005 185,691 269,253 11,778 487,727 Net return on ordinary - - 48,552 20,822 69,374 activities Dividends paid - note 5 - - - (13,886) (13,886) Issue of new shares 65 1,616 - - 1,681 Exercise of subscription 20 425 - - 445 shares At 31 March 2011 21,090 187,732 317,805 18,714 545,341 Net return on ordinary - - 24,958 23,350 48,308 activities Dividends paid - note 5 - - - (21,117) (21,117) Issue of new shares 243 6,058 - - 6,301 Exercise of subscription 49 1,026 - - 1,075 shares At 31 March 2012 21,382 194,816 342,763 20,947 579,908 BALANCE SHEET AS AT 31 march 2012 2011 £'000 £'000 Fixed assets Investments at fair value 683,579 645,324 Current assets Debtors 4,413 6,648 Creditors: amounts falling due within one year (78,224) (76,826) Net current liabilities (73,811) (70,178) Total assets less current liabilities 609,768 575,146 Creditors: amounts falling due after more than one (29,860) (29,805) year Net assets 579,908 545,341 Capital and reserves Share capital - note 6 21,382 21,090 Share premium 194,816 187,732 Capital reserve 342,763 317,805 Revenue reserve 20,947 18,714 Shareholders' funds 579,908 545,341 Net asset value per ordinary share - note 7 Basic 271.2p 258.6p Diluted 267.4p 255.5p These financial statements were approved and authorised for issue by the Board of Directors on 7 June 2012. Bill Alexander Chairman Signed on behalf of the Board of Directors Cash Flow Statement for the year ended 31 March 2012 2011 £'000 £'000 Net cash inflow from operating activities 20,989 17,338 Servicing of finance (2,902) (2,789) Capital expenditure and financial investment (3,818) (5,774) Equity dividends paid - note 5 (21,117) (13,886) Net cash outflow before management of liquid resources (6,848) (5,111) and financing Financing 6,483 2,126 Decrease in cash (365) (2,985) Reconciliation of Net Cash flow to movement in net debt For the year ended 31 March 2012 2011 £'000 £'000 Decrease in cash in year (365) (2,985) Exchange movements 19 (1,064) Debenture stock non-cash movement (55) (53) Movement in net debt in the year (401) (4,102) Net debt at beginning of year (103,761) (99,659) Net debt at end of year (104,162) (103,761) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012 1. Principal Accounting Policies The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied during the year and the preceding year, unless otherwise stated. (a) Basis of Preparation Accounting Standards applied The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain fixed assets, in accordance with applicable United Kingdom Accounting Standards and with the Statement of Recommended Practice (`SORP') `Financial Statements of Investment Trust Companies and Venture Capital Trusts', issued by the Association of Investment Companies in January 2009. The financial statements are also prepared on a going concern basis. 2. Income 2012 2011 £'000 £'000 Income from investments UK dividends 23,216 21,165 Overseas dividends 3,427 2,807 Unfranked investment income 117 94 Scrip dividends 32 83 Total income 26,792 24,149 A GlaxoSmithKline special dividend of £112,800 (2011: nil) has been recognised in capital. 3. Investment Management Fees 2012 2011 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Investment management fee 1,496 3,490 4,986 1,377 3,213 4,590 (i) Performance-related - 886 886 - - - management fee (ii) 1,496 4,376 5,872 1,377 3,213 4,590 (i) Invesco Asset Management Limited (`IAML') provides investment management, company secretarial and administration services to the Company under an agreement dated 20 February 1996 and subsequently amended on 27 December 2001. Details of this are contained in the Report of the Directors in the Annual Financial Report. At 31 March 2012 £1,284,000 (2011: £1,256,000) was due for payment in respect of the investment management fee. (ii) A performance-related fee is payable annually in arrears to the Manager, if the Company's performance exceeds the FTSE All-Share Index, to the extent that it exceeds any brought forward underperformance. The Company's performance was in excess of the benchmark index and as at 31 March 2012 £886,000 (2011: nil) was due for the payment in respect of the performance-related fee. 4. Return per Ordinary Share 2012 2011 £'000 £'000 Returns after tax: - revenue 23,350 20,822 - capital 24,958 48,552 - total 48,308 69,374 Weighted average number of ordinary shares in issue during the year: - basic 212,400,366 210,315,382 - diluted 215,051,088 211,498,088 The subscription shares are dilutive for the purposes of return per share when they would result in the issue of ordinary shares. This occurs when the average market price of the ordinary shares during the year is greater than the exercise price of 218.94p. The average market price for the year ended 31 March 2012 at 258.13p was dilutive (2011: dilutive at 234.74p). 5. Dividends on Ordinary Shares Dividends on equity shares paid in the year: 2012 2011 pence £'000 pence £'000 Fourth interim in respect of previous 2.75 5,800 - - year First interim paid 2.40 5,093 2.20 4,620 Second interim paid 2.40 5,114 2.20 4,626 Third interim paid 2.40 5,123 2.20 4,640 Return of unclaimed dividends from - (13) - - previous years 9.95 21,117 6.60 13,886 Dividends on equity shares payable in respect of the year: 2012 2011 pence £'000 pence £'000 First interim paid 2.40 5,093 2.20 4,620 Second interim paid 2.40 5,114 2.20 4,626 Third interim paid 2.40 5,123 2.20 4,640 Fourth interim payable 3.20 6,842 2.75 5,800 10.40 22,172 9.35 19,686 During the year, three interim dividends of 2.4p each per share were paid on 27 September 2011, 30 December 2011 and 31 March 2012 respectively. A fourth interim dividend of 3.2p per share was declared on 29 May 2012, for payment on 29 June 2012. 6. Share Capital (a) Allotted 2012 2011 Number £'000 Number £'000 Allotted, called-up and fully paid: Ordinary shares of 10p each 213,816,850 21,382 210,900,504 21,090 (b) Share Movements 2012 2011 ORDINARY SUBSCRIPTION ORDINARY SUBSCRIPTION Number Number Number Number Number at start of year 210,900,504 17,478,825 210,051,017 17,682,432 Exercise of subscription 491,203 (491,203) 203,607 (203,607) shares Issue of new shares 2,425,143 - 645,880 - Number at end of year 213,816,850 16,987,622 210,900,504 17,478,825 £'000 £'000 Net proceeds from issue of 6,301 1,681 shares Each subscription share of 0.001p carries the right to subscribe for one ordinary share at a price of 218.94p on 31 August in each of the years 2008 to 2013. 7. Net Asset Value 2012 2011 £'000 £'000 Shareholders' funds: - basic 579,908 545,341 - diluted 617,101 583,609 number number Ordinary shares in issue at year end: - basic 213,816,850 210,900,504 - diluted 230,804,472 228,379,329 Pence pence Net Asset Value: - basic 271.2 258.6 - diluted 267.4 255.5 As the basic NAV per share is greater than the exercise price of 218.94p, the subscription shares are dilutive and subscription shareholders are likely to exercise their option. 8. Related Party Transactions Invesco Asset Management Limited (`IAML'), a wholly-owned subsidiary of Invesco Limited, acts as Manager, Company Secretary and Administrator to the Company. Details of IAML's services and fees are disclosed in the Report of the Directors. Full details of Directors' interests are set out in the Report of the Directors in the Annual Financial Report. There are no other related party transactions. 9. This annual financial report announcement is not the Company's statutory accounts. The statutory accounts for the year ended 31 March 2011 have been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 March 2011 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 and did not include a statement under either section 498(2) or 498(3) of the Companies Act 2006. The statutory accounts for the financial year ended 31 March 2012 have been approved and audited but have not yet been delivered to the Registrar of Companies. 9. The audited Annual Financial Report will be posted to shareholders shortly. Copies may be obtained during normal business hours from the Company's Registered Office, 30 Finsbury Square, London, EC2A 1AG or the Manager's website at www.invescoperpetual.co.uk/investmenttrusts.co.uk 10. The Annual General Meeting will be held on 12 July 2012 at 11.00 am at Perpetual Park, Henley-on-Thames, Oxfordshire RG9 1HH. By order of the Board Invesco Asset Management Limited - Company Secretary Contacts Andrew Watkins Tel: 020 7065 4023 Kelly Nice Tel: 020 7065 4647 7 June 2012 END The content and accuracy of news releases published on this site and/or distributed by PR Newswire or its partners are the sole responsibility of the originating company or organisation. Whilst every effort is made to ensure the accuracy of our services, such releases are not actively monitored or reviewed by PR Newswire or its partners and under no circumstances shall PR Newswire or its partners be liable for any loss or damage resulting from the use of such information. All information should be checked prior to publication.