Interim Results

RNS Number : 2523U

British Empire Sec & Gen Tst PLC

13 May 2008

 



BRITISH EMPIRE SECURITIES AND GENERAL TRUST PLC

Announcement of un-audited results for the half year ended 31 March 2008, approved by the Board of Directors on 12 May 2008.

Objective

The investment objective of the Company is to achieve capital growth through a focused portfolio of investments, particularly in companies whose share prices stand at a discount to estimated underlying net asset value.

At				At
31 March 2008				30 September 2007	% change
Capital return
Net assets	£754.96m			£815.12m	(7.38)
Net asset value per share	471.61p			509.19p	(7.38)
Share price (mid market)	476.00p			476.00p	-
Premium/(discount)	0.93%			(6.52%)	-
	Six months to			Six months to
	31 March 2008			31 March 2007
Revenue earnings and dividends
Revenue earnings per share		2.92p		2.71p
Interim dividend per share		1.75p		1.40p
		Six months to		Year to
		31 March 2008		30 September 2007
Performance comparison
British Empire Securities and General Trust plc  (NAV total return)			(6.58)%	17.51%
Morgan Stanley Capital International World Index  (£ adjusted total return)			(8.83)%	11.56%
Datastream Global Growth Investment Trust Index*			(7.23)%	15.87%

* Index (based on total return) is subject to daily revision and this figure is at 4 April 2008 

Chairman's Statement

During my first few months as Chairman of your Company I am pleased to report that we have continued with our cautious investment policy and have benefitted from our underlying financial strength in difficult and volatile markets. Net asset value has fallen 6.6%, outperforming the Datastream Index (-7.2%) and the MSCI Index (-8.8%) all on a total return basis. The discount in share price to net asset value that stood at 6.5% at the end of September has now narrowed considerably. The share price at the end of March 2008 was at the same level as at the end of September.

Liquidity had been maintained at high levels during this period (between 11% and 16%), reflecting your Manager's belief that, despite the sharp fall in many markets, there has been no need yet to hurry in deploying our current level of liquidity.

We are paying an interim dividend of 1.75p, an increase of 25% over last year's interim dividend of 1.40p. This will be payable on 6th June 2008 to shareholders on the register at 23rd May 2008 (ex-dividend 21st May 2008).

Strone Macpherson 

Chairman 

12 May 2008 

Consolidated Income Statement 

For the six months to 31 March 2008 (unaudited)

For the six months to 31 March 2007 (unaudited)

For the year to 30  September 2007 (audited)

	Revenue	Capital		Revenue	Capital		Revenue	Capital
	return	return	Total	return	return	Total	return	return	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Income
Investment income	8,701	-	8,701	8,657	-	8,657	17,734	-	17,734
(Losses)/gains on investments  held at fair value	-	(57,709)	(57,709)	-	61,379	61,379	-	116,818	116,818
Gains/(losses) on Index Stock	-	1,221	1,221	-	(1,281)	(1,281)	-	(1,281)	(1,281)
Realised exchange (losses)/gains	-	(482)	(482)	-	159	159	-	54	54
	8,701	(56,970)	(48,269)	8,657	60,257	68,914	17,734	115,591	133,325
Expenses
Investment    management fee	(1,223)	(1,339)	(2,562)	(1,213)	(1,262)	(2,475)	(2,438)	(3,049)	(5,487)
Other expenses (including irrecoverable VAT)	(512)	-	(512)	(542)	-	(542)	(1,124)	-	(1,124)
Profit/(loss) before finance costs and tax	6,966	(58,309)	(51,343)	6,902	58,995	65,897	14,172	112,542	126,714
Finance costs	(1,199)	(4)	(1,203)	(1,187)	(4)	(1,191)	(2,410)	(7)	(2,417)

Profit/(loss) before tax		5,767		(58,313)	(52,546)	5,715	58,991	64,706	11,762	112,535	124,297
Taxation		(1,093)		37	(1,056)	(1,373)	379	(994)	(2,716)	1,216	(1,500)
Profit/(loss) for the  period		4,674		(58,276)	(53,602)	4,342	59,370	63,712	9,046	113,751	122,797
Earnings per Ordinary Share  (see note 3)
Basic - Ordinary Shares			2.92p	(36.40)p	(33.48)p	2.71p	37.09p	39.80p	5.65p	71.06p	76.71p

The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS.  The revenue return and capital return columns are supplementary to this and are prepared under the guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of British Empire Securities and General Trust plc.  There are no minority interests. The investment management fees shown for the periods to 31 March 2007 and 30 September 2007 include unrecovered VAT. No VAT on investment management fees has been charged since 30 September 2007 following the acceptance by HM Revenue & Customs of the ruling by the European Court of Justice.

Consolidated Statement of Changes in Equity

Ordinary		Capital		Capital	Capital
share		redemption	Share	reserve	reserve	Merger	Revenue
capital		reserve	premium	realised	unrealised	reserve	reserve	Total
£'000		£'000	£'000	£'000	£'000	£'000	£'000	£'000
For the six months to 31 March 2007 (unaudited)
Balance at 30 September 2006	16,008	2,927	28,078	496,223	98,162	41,406	18,487	701,291
Profit for the period	-	-	-	13,630	45,740	-	4,342	63,712
Ordinary dividend paid	-	-	-	-	-	-	(5,122)	(5,122)
Special dividend paid	-	-	-	-	-	-	(1,601)	(1,601)
Balance at 31 March 2007	16,008	2,927	28,078	509,853	143,902	41,406	16,106	758,280

For the year ended  30 September 2007 (audited)
Balance at 30 September 2006	16,008	2,927	28,078	496,223	98,162	41,406	18,487	701,291
Profit for the  period	-	-	-	74,011	39,740	-	9,046	122,797
Ordinary dividends paid	-	-	-	-	-	-	(7,363)	(7,363)
Special dividend paid	-	-	-	-	-	-	(1,601)	(1,601)
Balance at 30 September 2007	16,008	2,927	28,078	570,234	137,902	41,406	18,569	815,124

For the six months to  31 March 2008 (unaudited)
Balance at 30 September 2007	16,008	2,927	28,078	570,234	137,902	41,406	18,569	815,124
Profit/(loss) for the period	-	-	-	29,632	(87,908)	-	4,674	(53,602)
Ordinary dividend paid	-	-	-	-	-	-	(5,763)	(5,763)
Special dividend paid	-	-	-	-	-	-	(800)	(800)
Balance at 31 March 2008	16,008	2,927	28,078	599,866	49,994	41,406	16,680	754,959

Consolidated Balance Sheet

	At  31 March 2008 (unaudited)  £'000		At  31 March 2007 (unaudited) £'000	At  30 September 2007 (audited)  £'000
Non current assets
Investments held at fair value through profit or loss		780,244	787,370	841,051
Current assets
Investments		6	5	8
Sales for future settlement		144	2,293	4,036
Other receivables		6,936	4,434	4,285
Cash and cash equivalents		1,980	2,616	3,926
		9,066	9,348	12,255
Total assets		789,310	796,718	853,306
Current liabilities
Purchases for future settlement		(72)	(3,501)	(2,922)
Other payables		(3,319)	(2,373)	(3,072)
		(3,391)	(5,874)	(5,994)
Total assets less current liabilities		785,919	790,844	847,312
Non-current liabilities
10 3/8 per cent Debenture Stock 2011		(8,515)	(8,515)	(8,515)
8 1/8 per cent Debenture Stock 2023		(14,890)	(14,882)	(14,886)
Equities Index Stock 2013		(7,131)	(8,603)	(8,463)
Provision for deferred tax		(424)	(564)	(324)

Net assets	754,959	758,280	815,124
Equity attributable to equity Shareholders
Ordinary share capital	16,008	16,008	16,008
Capital redemption reserve	2,927	2,927	2,927
Share premium	28,078	28,078	28,078
Capital reserve realised	599,866	509,853	570,234
Capital reserve unrealised	49,994	143,902	137,902
Merger reserve	41,406	41,406	41,406
Revenue reserve	16,680	16,106	18,569

Total equity		754,959	758,280	815,124
Net asset value per Ordinary Share:- basic (see note 6)		471.61p	473.68p	509.19p
Number of shares in issue		160,080,089	160,080,089	160,080,089

Consolidated Cash Flow Statement

Six months to  31 March 2008  (unaudited)  £'000		Six months to  31 March 2007  (unaudited)  £'000	Year to  30 September 2007 (audited)  £'000
Net cash inflow from operating activities  (see below)	5,211	131	3,927
Financing activities
Dividends paid	(6,563)	(6,723)	(8,964)
Buyback of Index Stock	(112)	(196)	(336)
Cash outflow from financing activities	(6,675)	(6,919)	(9,300)
Decrease in cash and cash equivalents	(1,464)	(6,788)	(5,373)
Exchange movements	(482)	159	54
Change in cash and cash equivalents	(1,946)	(6,629)	(5,319)
Cash and cash equivalents at beginning of period	3,926	9,245	9,245
Cash and cash equivalents at end of period	1,980	2,616	3,926

Reconciliation of profit before taxation to net cash inflow from operating activities
(Loss)/profit before taxation	(52,546)	64,706	124,297
(Gains)/losses on Index Stock held at fair value	1,221	1,281	1,281
Losses/(gains) on exchange movements	482	(159)	(54)
Losses/(gains) on investments held at fair value through profit or loss	57,709	(61,379)	(116,818)
Purchases of investments	(242,416)	(218,353)	(495,697)
Sales of investments	246,557	217,057	493,838
Increase in other receivables	(2,674)	(998)	(658)
Decrease in creditors	(458)	(1,887)	(1,131)
Taxation	(228)	(141)	(1,135)
Amortisation of Debenture issues expenses	4	4	7
Decrease/(increase) in value on investments - current assets	2	-	(3)
Net cash inflow from operating activities	5,211	131	3,927

Notes to the Financial Statements

1.  Significant accounting policies

The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ('IFRS'). The accounting policies and methods of computation followed in these interim financial statements are consistent with the most recent annual financial statements. The half year financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'.

These financial statements are presented in sterling because this is the currency of the primary economic environment in which the Group operates.

2. Income
	31 March	31 March	30 September
	2008	2007	2007
	£’000	£’000	£’000
Income from investments
Listed investments	8,409	8,459	17,251
Other income
Deposit interest	294	198	480
(Loss)/gain from dealing activities of subsidiary	(2)	-	3
	292	198	483
Total income	8,701	8,657	17,734

3. Earnings per Ordinary Share						31 March		31 March	30 September
						2008		2007	2007
						£'000		£'000	£'000
Total basic earnings per Ordinary Share
Total (losses)/earnings	(53,602,000)							63,712,000	122,797,000
Weighted average number of Ordinary Shares in issue during the period  160,080,089								160,080,089	160,080,089
Total earnings per Ordinary Share				(33.48)p				39.80p	76.71p
The total earnings per Ordinary Share detailed above can be further analysed between revenue and capital as below:
Basic revenue earnings per Ordinary Share
Revenue earnings			4,674,000					4,342,000	9,046,000
Weighted average number of Ordinary Shares in issue during the period  160,080,089								160,080,089	160,080,089
Basic revenue earnings per Ordinary share							2.92p	2.71p	5.65p
Basic capital earnings per Ordinary Share
Capital (losses)/earnings		(58,276,000)						59,370,000	113,751,000
Weighted average number of Ordinary Shares in issue during the period  160,080,089								160,080,089	160,080,089
Basic capital earnings per Ordinary Share					(36.40)p			37.09p	71.06p

4. Comparative information

The financial information contained in this half year report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the six months ended 31 March 2008 and 31 March 2007 has not been audited.

The information for the year ended 30 September 2007 has been extracted from the latest published audited financial statements.  The audited financial statements for the year ended 30 September 2007 have been filed with the Registrar of Companies.  The report of the auditors on those accounts contained no qualification or reference to any matters to which the auditors drew attention by way of emphasis without qualifying the audit report or statement under section 237(2) or (3) of the Companies Act 1985.

5. Retained earnings
The table below shows the movement in the retained earnings analysed between revenue and capital items.
	Revenue		Capital	Total
	£'000		£'000	£'000
At 30 September 2007	18,569		708,136	726,705
Movement during the period:
Net income for the period		4,674	(58,276)	(53,602)
Ordinary dividend paid: Ordinary Shares		(5,763)	-	(5,763)
Special dividend paid: Ordinary Shares		(800)	-	(800)
At 31 March 2008		16,680	649,860	666,540

6. Net asset value per Ordinary Share

The net asset value per Ordinary Share is based on net assets of £754,959,000 (six months to 31 March 2007: £758,280,000; year ended 30 September 2007: £815,124,000) and on 160,080,089 (six months to 31 March 2007: 160,080,089, year ended 30 September 2007: 160,080,089) Ordinary Shares, being the number of Ordinary Shares in issue at the period ends.

7. Equities Index Unsecured Loan Stock 2013

During the period the Company bought back 39,362 units of Equities Index Loan Stock 2013 for cancellation at a cost of £112,182.

8. Dividends

During the period the Company paid a final dividend of 3.60p per Ordinary Share and a special dividend of 0.50p per Ordinary Share for the year ended 30 September 2007 on 4 January 2008 to Ordinary Shareholders on the register at 7 December 2007 (ex-dividend 5 December 2007).

The interim dividend of 1.75p per Ordinary Share for the year ending 30 September 2008 will be paid on 6 June 2008 to Ordinary Shareholders on the register at the close of business on 23 May 2008 (ex-dividend 21 May 2008).

9. Contingent assets  The Board is taking steps to reclaim such back VAT on investment management fees as it can but cannot yet calculate the quantum accurately. However, as any recovery is unlikely to have a material impact on Net Asset Value the Directors have not recognised recoverable VAT in these financial statements. 10. This Half Year Report will be sent to shareholders shortly.  Additional copies may be obtained from the office of the Company Secretary - Phoenix Administration Services Limited, Springfield Lodge, Colchester Road, Chelmsford CM2 5PW.

 

END

 

 

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