Final Results

Aberforth Smaller Companies Tst PLC 22 January 2002 ABERFORTH SMALLER COMPANIES TRUST plc PRELIMINARY RESULTS For the Year to 31 December 2001 FEATURES • Fully Diluted Net Asset Value Total Return +7.9% • Benchmark Index Total Return -13.0% • Increase in Dividends per Ordinary Share +5.2% Aberforth Smaller Companies Trust plc (ASCoT) invests only in small UK quoted companies and is managed by Aberforth Partners. CHAIRMAN'S STATEMENT TO SHAREHOLDERS • REVIEW OF 2001 PERFORMANCE The year to December 2001 has seen global stockmarkets generate negative returns. In the UK the total return from ASCoT's benchmark index - the Hoare Govett Smaller Companies Index (excluding investment companies) was a negative 13.0% while the total return for the FTSE All-Share Index (representative of ' larger companies') was a negative 13.3%. ASCoT has performed well against this background recording a positive total return for 2001 of 7.9%, therefore significantly outperforming its benchmark index. The Board is pleased to recommend a final dividend of 5.90p, which produces total dividends for the year of 9.10p, an increase of 5.2% on the total dividends paid for the previous year. Subject to Shareholders' approval, the final dividend of 5.90p per share will be paid on 1 March 2002 to Shareholders on the register at close of business on 1 February 2002. The factors that dominated stockmarkets in 2000 continued to do so in the first half of 2001. The continued derating of the so-called 'TMT' sectors (Technology, Media and Telecommunications) gradually gave way to concerns of a more broadly based economic slowdown around the developed world. In the face of these concerns financial authorities, not least the Federal Reserve Board in the USA, have made frequent and significant reductions in short term interest rates. The process of monetary easing is normally followed by economic recovery and, ultimately, rising corporate profits. Clearly this process was severely destabilised by the effects on confidence of the terrorist attacks in New York City and Washington D.C. in September. The immediate impact of these events on stockmarkets was to produce sharp declines coincident with the combination of greater uncertainty and perceived risk. Smaller companies as an asset class performed relatively poorly in a rapidly declining market where investor sentiment was driven by a desire for liquidity. In September the benchmark index declined by 18.8% as against the 9.4% decline recorded by FTSE All-Share Index. However, following the further reductions in short term interest rates, stock markets recovered substantially and against a rise of 18.8% in the benchmark index in the final quarter of the year ASCoT's total return was 17.4%. Consequently the combination of substantial outperformance in the first nine months followed by minor underperformance in the fourth quarter has allowed ASCoT to record another year of satisfactory returns both in absolute and particularly in relative terms. ASCoT did not make use of its debt facilities during the period under review. This position was a reflection of the Managers' generally cautious view of the likely levels of absolute returns from stockmarkets which prevailed throughout the period. However, the gearing facility remains available and it is the intention to utilise it when the Board and Managers consider the opportunity to be appropriate. Shareholders can be assured that there is no cost involved in having the facility available but unutilised. • CONTINUATION VOTE Shareholders will be aware that an ordinary resolution is proposed at every third Annual General Meeting to the effect that the Company continues to manage its affairs as an investment trust. Such a resolution will be proposed at the forthcoming AGM on 26 February 2002, the two previous resolutions in 1996 and 1999 having been carried unanimously. In the three years since the last continuation vote, ASCoT's fully diluted net asset value has provided a compound annual total return of 23.0% which compares with 11.2% from the Hoare Govett Smaller Companies Index (excluding investment companies) and 0.4% from the FTSE All-Share Index. The past three years have seen considerable fluctuation in the relative success of the application of the growth and value investment styles. Clearly the period from August 1999 until March 2000 was one of relatively poor performance for ASCoT; however it is pleasing to note that for the majority of the past three years ASCoT outperformed its investment benchmark, resulting in the significant overall outperformance. After considering these factors the Board recommends that Shareholders vote in favour of ASCoT's continuation. • BOARD COMPOSITION I mentioned in last year's annual report that in maintaining its commitment to corporate governance the Board would continue to keep its composition under review. I also mentioned that this process was constrained by the availability of suitable individuals. I am therefore delighted to welcome two new members to the Board. Marco Chiappelli and Eddie Cran were appointed to the Board on 17 July 2001. Each has a long experience at board level in listed public companies and has much to contribute to the Board's deliberations. As I intimated in my Interim Statement, Dr. Finlay MacKenzie will be retiring from the Board following the Annual General Meeting on 26 February 2002. Finlay has been a Director of ASCoT since it was established in 1990 and he has made a singular and valued contribution to the Company's affairs. I would like to record my thanks in addition to those of my fellow Directors for his reliable and sterling efforts over the eleven years that he has been involved with ASCoT. His wise and thoughtful counsel will be missed. • SHARE BUY BACK AND WARRANT REPURCHASE During the year the Company has purchased for cancellation 848,988 Warrants at prices that enhanced Shareholder value. The Board will continue to take advantage of economically attractive opportunities to buy-in Warrants. A Warrant confers the right to subscribe for one Ordinary Share of 1p on 31 March each year. This right will lapse after 31 March 2003. Consequently, Warrantholders should be aware that only two opportunities remain for them to exercise their rights. One result of exercising Warrants, at the cost of 100p each, is to entitle the holder to receive dividends declared and paid on the Ordinary Shares after the date of exercise. In respect of calendar 2001, the total dividend will be 9.10p (subject to Shareholder approval at the forthcoming Annual General Meeting). At the Company's Annual General Meeting in February 2001 the authority to purchase up to 14.99% of the Company's Ordinary Shares was renewed. The Board will be seeking a further renewal of this authority at the Annual General Meeting to be held on 26 February 2002. The Board has carefully considered the circumstances under which such authority will be utilised and, should such circumstances arise, will not hesitate to purchase Ordinary Shares. • SUMMARY AND OUTLOOK ASCoT performed well in the period under review. The major influence on stockmarkets in 2002 will most likely be perceptions about the timing of a recovery in the level of economic growth in the USA. The Managers' task in the coming year will be to position the portfolio to participate in the opportunities that the stockmarket offers - against whatever economic background prevails. The Managers have seen ASCoT through a remarkably volatile year in a robust fashion and I remain confident of their abilities to do so in the future. William Y Hughes Chairman 22 January 2002 The Statement of Total Return, summary Balance Sheet and summary Cash Flow Statement are set out below:- STATEMENT OF TOTAL RETURN (Incorporating the Revenue Account*) For the Year ended 31 December 2001 (unaudited) 12 months to 12 months to 31 December 2001 31 December 2000 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised - 19,592 19,592 - 22,235 22,235 gains/(losses) on sales Unrealised - (3,336) (3,336) - 12,019 12,019 gains/(losses) ------------ ------------ ------------ ------------ ------------ ------------ Gains/(losses) on - 16,256 16,256 - 34,254 34,254 investments Deemed cost of Warrants purchased for - (1,443) (1,443) - (41) (41) cancellation Dividend income 9,436 - 9,436 9,310 - 9,310 Interest income 979 - 979 563 - 563 Other income 17 - 17 25 - 25 Investment (1,065) (1,775) (2,840) (945) (1,576) (2,521) management fee Other expenses (233) - (233) (196) - (196) ------------ ------------ ------------ ------------ ------------ ------------ Net return before finance costs and taxation 9,134 13,038 22,172 8,757 32,637 41,394 Interest payable - - - (41) (69) (110) and similar charges ------------ ------------ ------------ ------------ ------------ ------------ Return on ordinary 9,134 13,038 22,172 8,716 32,568 41,284 activities before tax Tax on ordinary - - - - - - activities ------------ ------------ ------------ ------------ ------------ ------------ Return attributable to equity shareholders 9,134 13,038 22,172 8,716 32,568 41,284 Dividends in (7,610) - (7,610) (7,202) - (7,202) respect of equity shares ------------ ------------ ------------ ------------ ------------ ------------ Transfer to 1,524 13,038 14,562 1,514 32,568 34,082 reserves ======= ======= ======= ======= ======= ======= Returns per Ordinary Share Basic 10.93p 15.61p 26.54p 10.48p 39.17p 49.65p Diluted 10.75p 15.34p 26.09p 10.25p 38.31p 48.56p Dividends per 9.10p - 9.10p 8.65p - 8.65p Ordinary Share NOTES The calculations of revenue return per Ordinary Share are based on net revenue of £9,134,000 (2000 - £8,716,000) and on Ordinary Shares numbering 83,537,525 (2000 - 83,135,270) in the case of basic returns and 84,989,235 (2000 - 85,016,516) in the case of diluted returns. The calculations of capital return per Ordinary Share are based on net capital gains of £13,038,000 (2000 - £32,568,000) and on Ordinary Shares numbering 83,537,525 (2000 - 83,135,270) in the case of basic returns and 84,989,235 (2000 - 85,016,516) in the case of diluted returns. * The revenue column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. SUMMARY BALANCE SHEET As at 31 December 2001 (unaudited) 31-Dec 31-Dec 2001 2000 £'000 £'000 Securities officially listed on the London Stock Exchange 305,074 286,067 -------------- -------------- Debtors 1,094 5,430 Cash at bank 14,210 15,074 Creditors (5,116) (5,651) -------------- -------------- Net current assets 10,188 14,853 -------------- -------------- Total assets less liabilities 315,262 300,920 ======== ======== Capital and reserves: equity interests Called up share capital (Ordinary Shares) 836 833 Reserves: Share premium account 868 500 Special reserve 133,525 133,525 Capital reserve - realised 137,455 121,672 Capital reserve - unrealised 32,641 35,977 Revenue reserve 9,937 8,413 -------------- -------------- 315,262 300,920 ======== ======== Net Asset Values per Ordinary Share Basic 377.0p 361.4p Fully diluted 371.6p 352.7p Diluted - FRS 14 371.8p 353.5p NOTES As at 31 December 2001, the Company had 83,630,941 Ordinary Shares (2000 - 83,260,325) and 1,659,293 Warrants (2000 - 2,878,897) in issue. On 2 April 2001, as a result of certain holders exercising the subscription rights of their Warrants, 370,616 Ordinary Shares were issued at 100p per share. During the year to 31 December 2001, the Company bought in 848,988 Warrants for cancellation at a total cost of £2,034,000. No Ordinary Shares were bought in during the year. SUMMARY CASH FLOW STATEMENT For the Year ended 31 December 2001 (unaudited) 12 months to 12 months to 31 December 2001 31 December 2000 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 7,436 7,014 Returns on investment and servicing of finance Interest paid - (182) -------------- -------------- Net cash outflow from returns on investment and servicing of finance - (182) Capital expenditure and financial investment Payments to acquire investments (119,098) (117,834) Receipts from sales of investments 119,841 146,283 -------------- -------------- Net cash inflow from capital expenditure and financial investment 743 28,449 -------------- -------------- 8,179 35,281 Equity dividends paid (7,380) (6,429) -------------- -------------- 799 28,852 Financing Issue of Ordinary Shares 371 503 Warrants purchased for cancellation (2,034) (76) -------------- -------------- Net cash (outflow)/inflow from financing (1,663) 427 -------------- -------------- (Decrease)/increase in cash (864) 29,279 ======== ======== NOTES 1. The foregoing do not comprise statutory accounts (as defined in section 240(5) of the Companies Act 1985) of the Company. The statutory accounts for the year to 31 December 2000, which contained an unqualified Report of the Auditors, have been lodged with the Registrar of Companies and did not contain a statement required under section 237(2) or (3) of the Companies Act 1985. 2. The Annual Report is expected to be posted to shareholders on 25 January 2002. Members of the public may obtain copies from Aberforth Partners, 14 Melville Street, Edinburgh EH3 7NS or from its website at www.aberforth.co.uk. CONTACT: John Evans ' Aberforth Partners ' 0131 220 0733 Aberforth Partners, Secretaries - 22 January 2002 ANNOUNCEMENT ENDS This information is provided by RNS The company news service from the London Stock Exchange

Companies

Aberforth Smaller Companies Trust (ASL)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today