AUSTRALIAN UNITED INVESTMENT COMPANY LIMITED December 2006 - Final Docs... · 2014-12-22 · DIVERSIFIED UNITED INVESTMENT LIMITED ABN 33 006 713 177 LEVEL 4 TEL (613) 9654 0499 45

DIVERSIFIED UNITED INVESTMENT LIMITED ABN 33 006 713 177

APPENDIX 4D STATEMENT FOR THE HALF YEAR ENDING 31 DECEMBER 2006

CONTENTS

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Results for announcement to the market

Letter to Australian Stock Exchange

Financial Statements

Independent Audit Report

Appendix 4D: Results for Announcement to the Market Diversified United Investment Limited

1

RESULTS FOR ANNOUNCEMENT TO THE MARKET The reporting period is the half year ended 31 December 2006 with the corresponding period being the half year ended 31 December 2005. Results for announcement to the market •

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Revenue from ordinary activities was $10.4 million, 35% up from the prior period.

Operating Profit after tax and before net realised gains on the investment portfolio was $8.9 million, up 40% from the prior period.

Revenue and Operating Profit for the period include income earned on additional investments made following the 1:5 rights issue in May 2006.

Earnings per share based on net operating profit after tax were 7.2 cents, an increase of 20% from the prior period

Net realised gains on the investment portfolio after tax were $6.1 million, up 58% from the prior period.

Total net profits for the period were $15.0 million, 47% up from the prior period.

In the current period special dividends and distributions of $867,000 after tax were received. In the previous corresponding period special dividends of $804,000 after tax were received.

The interim dividend for the half year is 5.5 cents per share (38% increase on 4.0 cents for the previous period) fully franked payable on 12 April 2007. The record date for determining entitlement to the interim dividend is 22 March 2007.

DIVERSIFIED UNITED INVESTMENT LIMITED ABN 33 006 713 177

LEVEL 4 TEL (613) 9654 0499 45 EXHIBITION STREET FAX (613) 9654 3499 MELBOURNE VIC 3000 AUSTRALIA

15 February 2007 The General Manager Australian Stock Exchange Ltd 10th Floor 20 Bond Street Sydney NSW 2000 Dear Sir,

Half Yearly Financial Report and Dividend Announcement for the Half Year Ended 31 December 2006

The Directors are pleased to make the following report concerning the company’s performance and interim dividend:-

Operating Profit and Realised Capital Gains Operating profit after income tax and before net realised gains on the investment portfolio for the half year ended 31 December 2006 was $8,890,000 (previous corresponding period: $6,343,000). Operating profit includes special dividends and distributions received of $867,000 (previously $804,000). Operating profit for the period includes income earned on additional investments made following the 1:5 rights issue in May 2006. Net realised gains on the investment portfolio after tax were $6,110,000 (previously $3,865,000). In accordance with accounting standards, these gains include the non-cash, scrip based deemed sales arising from the scheme of arrangement affecting our holdings in Alinta Limited and Australian Gas Light Company. Operating expenses (excluding interest) were 0.11% of the average market value of the portfolio (previously 0.12%).

Earnings Per Share The operating earnings per share based on the weighted average number of shares on issue for the half year was 7.2 cents per share (6.5 cents excluding the special dividends) compared to 6.0 cents for the half year to 31 December 2005 (5.3 cents excluding special dividends). Including capital gains and special dividends, earnings per share were 12.2 cents (previously 9.7 cents).

Dividends The Directors also announce an interim dividend of 5.5 cents per share fully franked to shareholders registered on 22 March 2007, to be paid on 12 April 2007. The comparable 2006 interim dividend was 4.0 cents per share fully franked. The dividend contains no Listed Investment Company capital gains.

Dividend Reinvestment Plan The last date for receipt of election notices under the Dividend Reinvestment Plan is 22 March 2007. The Plan offers shares lieu of the cash dividend, at current market prices without discount.

Asset Backing The net tangible asset backing per share based on the market valuation of investments was $3.70 at 31 December 2006 and $3.80 at 31 January 2007. These calculations are after provision for tax on net realised gains, before tax on unrealised gains and before provision for the interim dividend.

C:\Documents and Settings\SANDY\My Documents\DUI\Final Docs 31.12.06\ASX Letter 31.12.06.doc

- 2 - The Company is a long term investor and does not intend disposing of its total portfolio. If estimated tax on unrealised gains were to be deducted, the above figures would be $3.08 at 31 December 2006 and $3.15 at 31 January 2007.

Investment Portfolio At 31 December 2006 the investment portfolio at market values was invested 99% in Australian equities (including property companies and trusts) and 1% in fixed interest securities and cash. As at 31 December 2006 the twenty-five largest shareholdings of the company, at market values were: Company

Market Value $’000

% of Market Value of Total Investments

1. Woodside Petroleum Ltd 38,110 7.6% 2. BHP Billiton Ltd 32,890 6.5% 3. ANZ Banking Group Ltd 28,210 5.6% 4. Rio Tinto Ltd 26,005 5.2% 5. QBE Insurance Group Ltd 25,965 5.2% 6. Westfield Group 25,188 5.0% 7. Commonwealth Bank of Australia Ltd 24,740 4.9% 8. Alumina Ltd 20,605 4.1% 9. Westpac Banking Corporation Ltd 19,392 3.9% 10. Tabcorp Holdings Ltd 16,850 3.4% 11. National Australia Bank Ltd 16,160 3.2% 12. Perpetual Trustees Australia Ltd 15,642 3.1% 13. Brambles Ltd 12,830 2.6% 14. Southern Cross Broadcasting (Aust) Ltd 11,186 2.2% 15. Suncorp Metway Ltd 10,175 2.0% 16. CSL Ltd 10,132 2.0% 17. Transurban Group Ltd 9,906 2.0% 18. St George Bank Ltd 9,900 2.0% 19. AGL Energy Ltd 9,708 1.9% 20. Woolworths Ltd 9,560 1.9% 21. Coles Group Ltd 8,400 1.7% 22. News Corporation Inc Class A Common CDI’s 8,214 1.6% 23. IOOF Holdings Ltd 7,735 1.5% 24. AXA Asia Pacific Holdings Ltd 7,290 1.4% 25. Australand Holdings Ltd 6,983 1.4%

411,776

81.9%

Total Investments at Market Value and Cash

502,546

Yours faithfully A J Hancock Company Secretary

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DIVERSIFIED UNITED INVESTMENT LIMITED (ABN 33 006 713 177)

INTERIM FINANCIAL REPORT

31 DECEMBER 2006

Diversified United Investment Limited Page 1

DIVERSIFIED UNITED INVESTMENT LIMITED

Directors C B Goode AC - Chairman G E Moir M K Myer R H Myer AM Company Secretary Andrew Justin Hancock FCA Principal Office Level 4 45 Exhibition Street Melbourne Vic 3000 Tel: (613) 9654 0499 Fax: (613) 9654 3499 Email: [email protected] Website: www.dui.com.au Registered Office Diversified United Investment Limited C/- KPMG 147 Collins Street Melbourne Vic 3000 Bankers Australia and New Zealand Banking Group Limited National Australia Bank Limited Auditors KPMG Chartered Accountants Share Registry Computershare Investor Services Pty Ltd Yarra Falls 452 Johnston Street Abbotsford Vic 3067 Tel: 1300 850 505 or (613) 9415 5000 Fax: (613) 9473 2500 Website: www.computershare.com Stock Exchange The Company is listed on the Australian Securities Exchange Ltd.



Directors' Report

The directors of Diversified United Investment Limited present their report together with the financial report for the half-year ended 31 December 2006 and the auditors’ review report thereon. Directors The directors of the Company at any time during or since the end of the half-year are: Name Period of Directorship Charles B. Goode AC Director since 1991 Chairman Appointed Chairman 1991 Graeme E. Moir Director since 1991 Martyn K. Myer Director since 1991 Rupert H. Myer AM Director since 2002 Review of Operations Operating profit (excluding net realised gains) after income tax for the half-year ended 31 December 2006 was $8,890,000 (previous corresponding period: $6,343,000). Operating profit (including net realised gains) after income tax for the half-year ended 31 December 2006 was $15,000,000 (previous corresponding period: $10,208,000). The operating profit after tax includes $867,000 of special dividends received. The 2005 half-year operating profit after tax included special dividends of $804,000. Net realised gains on the investment portfolio for the period include the non-cash, scrip based deemed sales arising from the scheme of arrangement affecting our holdings in Alinta Ltd and Australian Gas Light Company. At 31 December 2006, the investment portfolio at market values was invested 99% in Australian equities (including property companies and trusts), and 1% in fixed interest securities and cash. Operating expenses (excluding interest) were 0.11% of the average market value of the portfolio (2005: 0.12%).



Directors' Report (Continued) Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 The lead auditor’s independence declaration is set out on page 5 and forms part of the Directors’ Report for the half-year ended 31 December 2006. Rounding off The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report and directors’ report have been rounded to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the directors, for and on behalf of the board. Melbourne, 15th February 2007 C B Goode Director



Interim Income Statement for the Six Months Ended 31 December 2006

31 December 2006

31 December 2005

$’000’s $’000’s Revenue from investment portfolio 10,419 7,717 Administration and other expenses (490) (411) Finance expenses (1,106) (1,097) Operating profit before income tax expense and net realised gains on investment portfolio

8,823

6,209

Income tax benefit * 67 134 Net operating profit before net realised gains on investment portfolio

8,890

6,343

Net realised gains on investment portfolio transferred from revaluation reserve

9,006

5,712

Income tax expense thereon *

(2,896)

(1,847)

6,110 3,865 Profit for the period 15,000 10,208 Basic and diluted earnings per share (cents) 12.2 9.7 Basic and diluted operating earnings per share (cents) before net realised gains on investment portfolio are shown in Note 4.

* Total income tax expense (2,829) (1,713)

The income statement is to be read in conjunction with the condensed notes to the interim financial report set out on pages 10 to 13.



Interim Balance Sheet as at 31 December 2006

Note

31 December 2006

$’000’s

30 June 2006

$’000’s CURRENT ASSETS Cash assets 3,449 8,523 Receivables 1,059 2,678 Other 32 31 TOTAL CURRENT ASSETS 4,540 11,232 NON CURRENT ASSETS Investment portfolio 498,038 423,220 Deferred tax assets - 260 TOTAL NON CURRENT ASSETS 498,038 423,480 TOTAL ASSETS 502,578 434,712 CURRENT LIABILITIES Current tax liability 9 1,389 Payables 98 59 TOTAL CURRENT LIABILITIES 107 1,448 NON CURRENT LIABILITIES Borrowings – interest bearing 47,659 24,960 Deferred tax liability 75,710 62,907 Employee benefits - 866 TOTAL NON CURRENT LIABILITIES 123,369 88,733 TOTAL LIABILITIES 123,476 90,181 NET ASSETS 379,102 344,531 EQUITY Issued capital 6a 170,139 168,912 Revaluation reserve 6b 163,022 137,900 Realisation reserve 6b 15,033 14,167 Retained earnings 6b 30,908 23,552 TOTAL EQUITY 379,102 344,531 The balance sheet is to be read in conjunction with the condensed notes to the interim financial report set out on pages 10 to 13.



Interim Statement of Changes in Equity for the Six Months ended 31 December 2006

Note

31 December 2006

$’000’s

31 December 2005

$’000’s Total equity at the beginning of the period 6b 344,531 236,711 Revaluation of investment portfolio 43,243 47,706 Net realised gains on investment portfolio after tax transferred to income statement

(6,110)

(3,865)

Provision for tax on unrealised gains (13,166) (14,698) Total direct equity adjustments 23,967 29,143 Profit for the period 15,000 10,208 Total direct equity adjustments and profit for the period

38,967 39,351

Transactions with shareholders Dividend reinvestment plan 1,232 1,599 Dividends paid from retained earnings (1,534) (4,056) Dividends paid from realisation reserve (4,089) (1,013) Rights issue costs (5) - (4,396) (3,470) Total equity at the end of the period 6b 379,102 272,592

The statement of changes in equity should be read in conjunction with the condensed notes to the interim financial report set out on pages 10 to 13.



Interim Statement of Cash Flows for the Six Months Ended 31 December 2006

31 December

2006 $’000’s

31 December 2005

$’000’s Cash flows from operating activities

Interest received 108 216 Dividends and trust distributions received 11,892 8,781 Administration and other expenses paid (1,349) (315) Finance costs paid (1,371) (1,165) Income taxes paid (1,416) - Net cash from operating activities 7,864 7,517

Cash flows from investing activities Proceeds from sale of investments 8,026 14,924 Purchases of investments (39,601) (19,546) Net cash from investing activities (31,575) (4,622) Cash flows from financing activities

Rights issue costs (5) - Dividends paid (4,391) (3,470) Borrowings 23,033 24 Net cash from financing activities 18,637 (3,446) Net increase/(decrease) in cash held (5,074) (551) Cash and cash equivalents at 1 July 8,523 3,919 Cash and cash equivalents at 31 December 3,449 3,368 The statement of cash flows is to be read in conjunction with the condensed notes to the interim financial report set out on pages 10 to 13.



Condensed Notes to the Interim Financial Report for the Six Months Ended 31 December 2006

1. Reporting Entity

Diversified United Investment Limited (the ‘Company’) is a company domiciled in Australia. The annual financial report of the Company at 30 June 2006 is available on request from the Company’s office at Level 4, 45 Exhibition Street Melbourne Vic 3000 or at www.dui.com.au.

2. Statement of compliance

The interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134: Interim Financial Reporting, IAS 34: Interim Financial Reporting and the Corporations Act 2001. The interim financial report does not include all of the information required for a full annual financial report, and should be read in conjunction with the annual financial report of the Company at 30 June 2006.

This interim financial report was approved by the Board of Directors on 15 February 2007.

The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with the Class Order, amounts in the financial report have been rounded off to the nearest thousand dollars, unless otherwise stated.

3. Significant Accounting Policies

The accounting policies applied by the Company in this interim financial report are the same as those applied by the Company in the financial report at 30 June 2006.

4. Earnings per share

31 December

2006 Cents

31 December 2005 Cents

Basic earnings per share 12.2 9.7 Basic earnings per share before net realised gains on investment portfolio 7.2 6.0 Basic earnings per share before special dividends and net realised gains on investment portfolio 6.5 5.3 There are no factors which cause diluted earnings per share to be different from basic earnings per share. Net realised gains on the investment portfolio for the period include the non-cash, scrip based deemed sales arising from the scheme of arrangement affecting our holdings in Alinta Ltd and Australian Gas Light Company. The basic earnings per share for the half-year are calculated on a weighted average adjusted number of ordinary shares of 122,815,236 taking into account the shares issued in the dividend re-investment program. The 2005 figure is based on a weighted average number of ordinary shares of 105,187,306 after adjusting for the bonus element in the May 2006 rights issue.




31 December

2006 31 December

2005 $’000’s $’000’s 5. Dividends

Dividends recognised in the current period by the Company are:

Final fully franked dividend paid on 16 October 2006 5,623 5,069

Subsequent to reporting date:

Since 31 December 2006, the directors have declared the following dividend payable on 12 April 2007:

- Interim dividend of 5.5 cents per share fully franked 6,767

The financial effect of this dividend has not been brought to account in the financial statements for the period ended 31 December 2006.

31 December

2006 30 June 2006

$’000’s $’000’s 6. Capital and Reserves

(a) Issued Capital 123,034,555 ordinary fully paid shares (30 June 2006: 122,660,900)

170,139

168,912

Movements in issued capital Balance at beginning of period 168,912 111,188 Shares Issued - Dividend re-investment plan (i) 1,232 2,627 - Rights issue - 55,199 - Rights issue capitalised costs (5) (102) 170,139 168,912 (i) In respect of the 2006 final dividend paid on 16 October 2006, 373,655 shares were issued at $3.30 each under the dividend re-investment plan.




6. Capital and Reserves (continued)

(b) Reconciliation of movements in capital and reserves

Issued

Capital Revaluation

Reserve Realisation

Reserve Retained Earnings

Total Equity

($'000) ($'000) ($'000) ($'000) ($'000) Balance at 1 July 2005 111,188 95,424 - 30,099 236,711 Revaluation of investment portfolio - 47,706 - - 47,706 Provision for tax on unrealised gains - (14,698) - - (14,698)Net realised gains on investment portfolio - (5,712) - 5,712 -Income tax on net realised gains - 1,847 - (1,847) -Net operating profit for the period - - - 6,343 6,343 Dividend reinvestment plan 1,599 - - - 1,599 Dividends paid - - (1,013) (4,056) (5,069)Realised gains transferred after tax - prior years (i)

-

-

11,498

(11,498)

-

Realised gains transferred after tax - current period

-

-

3,865

(3,865)

-

Balance at 31 December 2005 112,787 124,567 14,350 20,888 272,592 Balance at 1 July 2006 168,912 137,900 14,167 23,552 344,531 Revaluation of investment portfolio - 43,243 - - 43,243 Provision for tax on unrealised gains - (13,166) - - (13,166)Net realised gains on investment portfolio - (9,006) - 9,006 -Income tax on net realised gains - 2,896 - (2,896) -Transfer of tax relating to previously recognised gains

-

1,155

(1,155)

- -

Net operating profit for the period - - - 8,890 8,890 Rights issue capitalised costs (5) - - - (5)Dividend reinvestment plan 1,232 - - - 1,232 Dividends paid - - (4,089) (1,534) (5,623)Realised gains transferred after tax - - 6,110 (6,110) - Balance at 31 December 2006 170,139 163,022 15,033 30,908 379,102 (i) The Company established a Realisation Reserve as at 1 July 2005 to which all capital profits (net of tax) since inception have been transferred from retained profits. 7.

Segment Reporting

The Company operates as an investment company in Australia.



Condensed Notes to the Interim Financial Report

for the Six Months Ended 31 December 2006 8. Contingent Liabilities and Capital Commitments

There were no contingent liabilities or capital commitments as at 31 December 2006 with the

exception of the final call payable on the Telstra Corporation Limited Instalment Receipts. Based on the Company’s current holding of 2,000,000 instalment receipts, the Company expects to pay $3,200,000 in May 2008 if the shares are held at that time.

9.

Related Parties

In accordance with the restructure of Directors’ remuneration which was approved at the Company’s annual general meeting on 12 October 2006, the following shares have been purchased for the Directors:

Charles B. Goode Graeme E. Moir Martyn K. Myer Rupert H. Myer

140,000 70,000 70,000 14,000

All other arrangements with related parties are consistent with those disclosed in the 30 June 2006 annual financial report.



Directors’ Declaration

In the opinion of the directors of Diversified United Investment Limited (“the Company”): 1. The financial statements and notes, set out on pages 6 to 13, are in accordance with the Corporations

Act 2001, including:

(a) giving a true and fair view of the financial position of the Company as at 31 December 2006 and of its performance, as represented by the results of its operations and cash flows for the half-year ended on that date; and

(b) complying with Australian Accounting Standard AASB 134 “Interim Financial Reporting”

and the Corporations Regulations 2001; and 2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when

they become due and payable. Dated at Melbourne this 15th day of February, 2007 Signed in accordance with a resolution of the Directors: C B Goode Director
