Acorn Income Fund Announcements

RNS Number : 5281I Acorn Income Fund Ld 19 November 2008  
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ACORN INCOME FUND LIMITED ("the Company")

Interim Management Statement for the period from 1 July 2008 to 19 November 2008.
Investment Objectives and Policy

The objectives of the Company are to provide shareholders with a high income and also the opportunity for capital growth.

The Company's portfolio is invested in equities and high income and fixed interest securities in order to achieve its investment objectives. It is the aim of the Company to achieve its objectives predominantly through investment of approximately 70% of the portfolio in smaller capitalised United Kingdom companies admitted to the Official List of the United Kingdom Listing Authority and traded on the London Stock Exchange or traded on AIM; and by investing approximately 30% of its assets in high yielding securities which will be predominantly fixed interest securities (including corporate bonds, preference and permanent interest bearing shares, convertible and reverse convertible bonds and debentures) but may include up to 15% of the portfolio (measured at the time of acquisition) in high yielding investment company shares.
Financial Highlights
30 June 2008
31 October 2008
% change
Ordinary share NAV
152.48p
92.62p
-39.26%
Ordinary share mid price
126.50p
84.50p
-33.20%
Total return on Gross Assets (adjusted for debt repayment)
-26.01%
Hoare Govett Smaller Companies Index (ex Investment Companies) - total return
3369.90
2311.67
-30.39%
                        

Material Events and Transactions

The deepening global credit crisis - and the growing recognition that the UK economy is facing a serious recession - has had a severe impact on almost every market and sector over the last four months. Against this background the smaller companies sector has inevitably suffered. Our Smaller Companies portfolio has focused on well financed businesses and avoided the most vulnerable sectors such as retail and general financial, but forced selling has driven prices down regardless of fundamentals. Significant transactions over the period have included a takeover bid for Abacus at a significant premium to the share price by Avnet. New investments were made in British Polythene Industries and Lookers while the holdings in Stobart Group, RPC, MacFarlane and Pendragon were increased. The High Income portfolio that has proved resilient in previous downturns was also impacted as credit spreads widened and the holdings in high yielding investment companies suffered from falling asset values and widening discounts. 

With the falling value of the Company's gross assets bank borrowings were reduced by £950,000 as detailed below. 
Issued share capital of the Company at 31 October 2008:

Ordinary Shares: 8,939,790
Bank loan

The Company repaid £700,000 of its loan from Bank of Scotland on 31 October 2008 and repaid a further £250,000 on 17 November 2008, thereby reducing the amount of the outstanding loan to £4,550,000.
Dividends

The Company announced an interim dividend on 4 September 2008 of 2.1 pence per share, which was paid on 30 September 2008. A further interim dividend of 2.1 pence per share was announced on 29 October 2008 and is payable on 19 December 2008. 
Largest holdings (% of Gross Assets) as at 31 October 2008

Smaller Companies Portfolio

Primary Health Properties
3.80%
Diploma PLC
3.70%
James Halstead PLC
3.40%
Rotork PLC
3.28%
Renishaw PLC
3.22%
Abacus Group PLC
3.12%
RPC Group PLC
3.05%
Nationwide Accident Repair
2.91%
Acal PLC
2.88%
Devro PLC
2.85%
High Income Portfolio

Royal Bank of Scotland 10.5% 01/03/2013
1.64%
HBOS 6.3673% Perpetual
1.27%
Punch Taverns/Redwood 5% 14/12/2010
1.27%
T2 Income Fund
1.13%
Bellway 9.5%
1.13%
Bear Stearns/JPM 0% 26/09/2013
1.06%
Firstgroup 6.875% 15/04/2013
1.05%
Barclays Bank/ Land Securities 10.9% RCB 16/08/2010
1.05%
Deutsche Bank/ Glaxosmithkline 9.84% RCB 18/06/2010
1.05%
Henderson Group 6.5% 02/05/2012
1.05%
Cash
4.77%
Save for the volatility of the financial markets, which continues to impact on the Company's assets and NAV per share, the Board is not aware of any significant events or transactions which have occurred since 31 October 2008 which would have a material impact on the financial position of the Company.
Further Information

Daily prices, Company announcements, Prospectus and monthly fact sheets are available via www.premierassetmanagement.co.uk.
For further information contact:

Premier Fund Managers Limited
Investment Adviser
Tel: 01483 306090

Anson Fund Managers Limited 
Secretary 
Tel: 01481 722260

19 November 2008

E&OE - in transmission
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