Interim Management Statement

RNS Number : 0142O

British Assets Trust PLC

01 August 2014

 



British Assets Trust plc

Interim Management Statement

For the Period from 1 April 2014 to 1 August 2014  

Investment Objective

British Assets Trust plc aims to achieve a total return in excess of a composite index, weighted as to 80 per cent FTSE All-Share Index and 20 per cent FTSE World (ex UK) Index, by investing principally in a diversified international portfolio of equities and equity-related securities.  Within this overall objective, the Company aims to deliver dividend growth which will be dependent upon, inter alia, the rate of revenue growth within the investment portfolio and the level of dividend cover.

Performance Summary

Total Return		Three months to 30/06/14
Net asset value1		1.6%
Composite index2		2.3%
Capital Values	As at  30/06/14	As at  31/03/14
Net asset value3	148.2p	147.3p
Share price (mid market)	135.3p	136.3p
Discount  - Basic4  - Debt adjusted5  - Debt adjusted6	8.7% 6.7% 4.2%	7.5% 5.6% 3.5%
Gearing  - Net of cash7  - Equity gearing8	11.4% 0.1%	13.6% 1.5%

Sources: F&C Investment Business Limited, Datastream.

1          Net asset value total return is calculated as the total return attributable to an Ordinary Share. It assumes that dividends paid to shareholders are re-invested in the net asset value.

2          Composite index of 80 per cent FTSE All-Share Index and 20 per cent FTSE World (ex UK) Index

3          Prepared in accordance with UK GAAP

4          Net asset value (UK GAAP) with debt at par

5          Net asset value (UK GAAP) adjusted to reflect market value of debt

6          Net asset value (non-UK GAAP, ex-income NAV) adjusted to reflect market value of debt

7          Gearing net of cash: (investments-shareholders' funds)/shareholders' funds

8          Equity gearing: (equity investments-shareholders' funds)/shareholders' funds

Review for the Period

The Company's net asset value total return for the three months ended 30 June 2014 was 1.6%. This compares to a return of 2.3% from the composite benchmark index of 80% FTSE All-Share Index and 20% FTSE World (ex UK) Index.

The quarter under review was a quiet but positive period for equities with volatility remaining at multi year lows despite geopolitical risks rising as markets made steady progress, buoyed by ongoing M&A activity. Emerging Markets outperformed developed markets during the quarter.

UK economic growth expectations remain elevated for both 2014 and 2015. This is leading to market expectations of interest rates increasing in the near term which has boosted sterling to new multi-year highs against both the US dollar and the Euro.

In the US, after a very soft first quarter, growth expectations for the remainder of the year are more robust. The outlook for the Eurozone remains very subdued, and in Emerging Markets expectations for growth have stabilised - alongside currency stability - and remain far higher than developed markets in aggregate.

This backdrop remains conducive to earnings growth, although at lower rates than projected at the beginning of the year.

Top Ten Holdings as at 30/06/14

Company	Country	% of total assets
BP	UK		5.1
HSBC Holdings	UK		4.8
BHP Billiton	UK		3.3
BAE Systems	UK		3.1
Prudential	UK		2.9
GlaxoSmithKline	UK		2.8
Rio Tinto	UK		2.5
Royal Dutch Shell	UK		2.4
Barclays	UK		2.3
Total	France		2.3
Total			31.5

Geographical Analysis as at 30/06/14

			%of total assets
UK Equities				64.4
International Equities -     Developed Americas -     Developed Europe -     Other Developed -     Emerging Markets				7.7           6.0           2.6           4.6
Corporate Bonds				9.6
Net Current Assets				5.1
Total				100.0

Dividends

A first quarterly interim dividend of 1.485p per share and a second quarterly interim dividend of 1.530p per share in respect of the year ended 30 September 2014 were paid on 11 April and 11 July 2014 respectively.

Compliance with the Alternative Investment Fund Managers Directive ('AIFMD')

The Board is pleased to announce that the Company has entered into arrangements necessary to ensure compliance with the AIFMD.

Following a review of the Company's arrangements, the Board has approved the appointment of its existing investment manager, F&C Investment Business Limited, as the Company's alternative investment fund manager (the 'AIFM') on the terms of and subject to the conditions of a new investment management agreement between the Company and the AIFM. FCIB is a subsidiary of F&C Asset Management plc and was approved as an AIFM by the UK's Financial Conduct Authority on 22 July 2014.

The Company's existing management agreement with FCIB has been replaced with the new agreement. The management fee and notice period provisions remain unchanged.

The Board has appointed J.P. Morgan Europe Limited (the 'Depositary') to act as the Company's depositary (as required by the AIFMD) on the terms of and subject to the conditions of a depositary agreement between the Company, the AIFM and the Depositary. The Company's existing custodian, JPMorgan Chase Bank NA, will continue to provide custody functions as a delegate of the Depositary.

Subsequent Events

The Board is not aware of any significant events or transactions which have occurred since 30 June 2014 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and Key Information

This statement and further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.british-assets.co.uk.

For further information please contact:

Phil Doel/Gordon Hay Smith

F&C Investment Business Limited

Tel: [phone]

 

END

 

 

IMSUGUBWRUPCURG