Interim Results

British Empire Sec & Gen Tst PLC 10 May 2000 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2000 * British Empire Net Asset Value per share rose 23% during the six month period to 31st March 2000, following a 37% increase in the last financial year. By comparison, the MS World Index (£) and the FTSE All-Share Index rose 21% and 10% respectively. * Net Assets totalled £349 million at 31st March 2000. * Over the 15 years since the major Rights Issue Net Asset Value per share has risen 587% compared to 435% for the MS World Index (£). * Earnings are up significantly compared to the previous year and the Interim Dividend has been increased from 0.25p to 0.30p per share, to reduce the disparity between Interim and Final. * Highlights of the period included: - £10 million realised profits from funds invested in biotechnology. - Substantial gains occurred in Emerging market investments. - The Company benefited from an involvement in corporate activity at Lazard Birla open-ending), Gartmore Fledgling (45% buy back at an 8% discount), and an acceleration of open ending at Central European Growth. - The Company bought back 8.8 million shares at an average discount of 17%. * At a time of high valuations, the Company's focus is on companies selling on historically wide discounts and recovery situations. * Liquidity was £63 million (£23 million net of liabilities) giving flexibility to take advantage of opportunities resulting from the exaggerated dichotomy between the 'old' and 'new' economies. W.G. Fossick, Chairman said, 'The period was one of the most turbulent in stock market history characterised by rampant and at times indiscriminate enthusiasm for technology and telecoms stocks. Such sectors are not natural constituents of an undervalued asset portfolio such as ours. Nevertheless, we were fortunate to participate in a number of profitable themes'. J.C. Walton, Investment Manager said, 'Emphasis must now be placed even more on individual stock selection. Many stocks are in bear markets often for no greater sin than to be in a business that is 'old hat'. Other stocks are depressed for cyclical reasons. Others again are selling on after tax discounts of 40-50%, for want of a catalyst. We will continue to focus on such areas of potential economic value'. For further information, please contact: John Walton, Managing Director, Ivory and Sime Asset Management Tel: 0207 853 6900 The Group's Statement of Total Return, Balance Sheet and Cash Flow Statement (unaudited) follow: BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Statement of Total Return (incorporating the revenue account) For the six months to 31 March 2000 for the six months to 31 March 2000 Revenue Capital Total £'000 £'000 £'000 Gains/(losses) on investments - 63,909 63,909 Realised exchange differences - 124 124 Depreciation of loan stock - (1,225) (1,225) Amortisation of debenture issue expenses - (3) (3) Income 4,558 531 5,089 Investment management fee (including VAT) (774) (193) (967) Other expenses net of VAT recovered (287) - (287) Net return before finance costs and tax 3,497 63,143 66,640 Interest payable (1,349) - (1,349) Return on ordinary activities before tax 2,148 63,143 65,291 Tax on ordinary activities (301) (185) (486) Return attributable to equity shareholders 1,847 62,958 64,805 Dividends in respect of equity shares (517) - (517) Transfer to reserves 1,330 62,958 64,288 Return per ordinary share: Basic 1.02p 34.77p 35.79p BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Statement of Total Return (incorporating the revenue account) For the six months to 31 March 2000 for the six months to 31 March 1999 Revenue Capital Total £'000 £'000 £'000 Gains/(losses) on investments - 34,760 34,760 Realised exchange differences - (101) (101) Depreciation of loan stock - (2,086) (2,086) Amortisation of debenture issue expenses - (3) (3) Income 3,177 1,222 4,399 Investment management fee (including VAT) (586) (147) (733) Other expenses net of VAT recovered (308) - (308) Net return before finance costs and tax 2,283 33,645 35,928 Interest payable (1,430) - (1,430) Return on ordinary activities before tax 853 33,645 34,498 Tax on ordinary activities 100 (333) (233) Return attributable to equity shareholders 953 33,312 34,265 Dividends in respect of equity shares (473) - (473) Transfer to reserves 480 33,312 33,792 Return per ordinary share: Basic 0.50p 17.60p 18.10p BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Statement of Total Return (incorporating the revenue account) For the six months to 31 March 2000 for the year to 30 September 1999 Revenue Capital Total £'000 £'000 £'000 Gains/(losses) on investments - 81,343 81,343 Realised exchange differences - (506) (506) Depreciation of loan stock - (2,223) 2,223) Amortisation of debenture issue expenses - (7) (7) Income 6,608 3,499 10,107 Investment management fee (including VAT) (1,172) (878) (2,050) Other expenses net of VAT recovered (477) - (477) Net return before finance costs and tax 4,959 81,228 86,187 Interest payable (2,812) - (2,812) Return on ordinary activities before tax 2,147 81,228 83,375 Tax on ordinary activities (109) 65 (44) Return attributable to equity shareholders 2,038 81,293 83,331 Dividends in respect of equity shares (2,119) - (2,119) Transfer (from)/to reserves (81) 81,293 81,212 Return per ordinary share: Basic 1.08p 42.99p 44.07p BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Balance Sheet As at As at As at 31 March 31 March 30 September 2000 1999 1999 £'000 £'000 £'000 Investments 356,445 283,083 250,985 Freehold investment properties 7,100 6,900 7,300 Net current assets 26,285 4,423 79,626 Total assets less current liabilities 389,830 294,406 337,911 Financed by: Equities Index Unsecured Loan Stock 2013 13,103 13,027 12,233 10.375 per cent Debenture Stock 2011 11,883 11,883 11,883 8.125 per cent Debenture Stock 2023 14,832 14,825 14,829 Provision for liabilities and charges 565 527 565 Ordinary shareholders' funds 349,447 254,144 298,401 389,830 294,406 337,911 Net asset value per ordinary share 196.00p 134.22p 159.53p Number of shares in issue 178,285,089 (31 March 1999: 189,355,089, 30 September 1999: 187,055,089) BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Summarised Unaudited Group Statement of Cash Flows Six months Six months Year ended ended ended 31 March 31 March 30 September 2000 1999 1999 £'000 £'000 £'000 Net cash flow from operating activities 2,595 1,984 4,851 Servicing of finance (1,107) (1,411) (2,692) Taxation (2) - (991) Capital expenditure and financial investment (44,941) (21,615) 56,114 Equity dividends paid (1,628) (1,628) (2,102) Net cash flow before financing (45,083) (22,670) 55,180 Financing (13,601) (429) (3,666) (Decrease)/increase in cash (58,684) (23,099) 51,514 Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash (58,684) (23,099) 51,514 Purchase of index loan stock 355 429 931 Changes in net debt resulting from cash flows (58,329) (22,670) 52,445 Exchange differences 122 (13) (456) Other (1,228) (2,089) (2,232) Movement in net debt (59,435) (24,772) 49,757 Net cash/(debt) at 1 October 40,577 (9,180) (9,180) Net (debt)/cash at 31 March/ 30 September (18,858) (33,952) 40,577 Reconciliation of operating profit to net cash flow from operating activities Net return before finance costs and taxation 3,497 2,391 5,313 Management fee charged to capital (193) (147) (878) Changes in working capital and other non-cash items (709) (260) 416 Net cash flow from operating activities 2,595 1,984 4,851 BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Notes: 1. The unaudited results have been prepared on the basis of the accounting policies set out in the statutory accounts of the Group for the year ended 30 September 1999 except as noted in note 4. 2. The results for the first six months should not be taken as a guide to the full year's results. 3. Income from revenue sources comprises: Six months to Year to 31 March 30 September 2000 1999 1999 £'000 £'000 £'000 Dividends 2,085 1,425 2,907 Interest 2,115 1,445 3,056 Other Income 358 307 645 4,558 3,177 6,608 Capital repayments of £531,000 (31 March 1999: £1,222,000, 30 September 1999: £3,499,000) paid by investeee companies have been credited to capital reserves. 4. In accordance with FRS16 (Current Tax), franked investment income is now shown excluding any associated tax credit with a subsequent reduction in the amount of the tax charge. The effect of this change in policy is to decrease franked investment income and the tax charge by £127,000 (31 March 1999 - £255,000, 30 September 1999 - £354,000). Comparative figures have been restated accordingly. 5. The accounting policy in respect of the performance element of management costs was amended in the year to 30 September 1999. The fee payable in excess of 0.4 per cent of assets is charged wholly to capital reserve. The figures for the six months to 31 March 1999 have been restated. 6. During the period to 31 March 2000, the Company bought 8,770,000 Ordinary shares for cancellation at an average price of 150.1p. The nominal value of the shares bought back has been transferred to a Capital Redemption Reserve. At 31 March 2000 the Company had 178,285,089 Ordinary shares in issue. 7. The Company bought in for cancellation 116,000 units of Equities Index Unsecured Loan Stock in the six months to 31 March 2000. As at 31 March 2000 the Company had 4,212,530 units in issue (31 March 1999: 4,500,108). 8. The interim dividend will be paid on 11 June 2000 to ordinary shareholders on the Register at 26 May 2000. 9. These are not full statutory accounts in terms of section 240 of the Companies Act 1985. The full audited accounts for the year to 30 September 1999, which were unqualified, have been lodged with the Registrar of Companies. A full Interim Report will be sent to shareholders in May 2000 and will be available for inspection at the registered office of the Company, 7 Princes Street, London EC2R 8AQ.

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