Final Results

Baillie Gifford Shin Nippon PLC 07 March 2008 BAILLIE GIFFORD SHIN NIPPON PLC Results for the year to 31 January 2008 For the year to 31 January 2008, Shin Nippon's net asset value* per share declined by 32.2% and the share price declined by 36.9%. The Company's comparative index** declined by 18.6%. Japanese smaller companies have been one of the weakest performing asset classes globally over the past two years despite continuing corporate profit growth. This has resulted in many company valuations now being at extremely attractive levels. • The Company maintained a fairly high level of gearing over the course of the year as the Managers were finding many attractively valued stocks. The continuing fall in markets, as sentiment towards Japan deteriorated, has meant that this was detrimental to overall performance. The Board and Managers remain confident that the low cost of borrowing in Yen will help enhance portfolio returns in the long term as it has done in the past. • Stock selection in the Financial, Real Estate & Construction and Information Communication & Utilities sectors was the other notable contributor to poor performance. Stock selection in the Manufacturing and machinery sector was the largest positive relative contributor to performance. • The underlying economy and Japanese corporate profits remain relatively healthy. Encouragingly Asia, and not North America, is now by some margin Japan's most important trading partner. The labour market remains tight and individuals have definitely not borrowed beyond their means. Company balance sheets are strong across all sectors of the market, including the financials. Companies are continuing to increase dividends and share buybacks for cancellation have become much more common. The market dividend yield now exceeds that of the ten year Japanese Government Bond yield. • The Board and Managers are of the opinion that the extent of share price declines and the financial health of many companies provides an appealing backdrop to invest selectively in attractive Japanese smaller companies with good long term growth prospects. * after deducting borrowings at fair value ** The Company's comparative index is a composite index of the Tokyo Second Section Index, the TOPIX Small Index and the JASDAQ Index, weighted by market capitalisation, in sterling terms. - ends - For further information please contact: Anzelm Cydzik Baillie Gifford & Co 0131 275 2000 Roland Cross, Director, Broadgate Marketing 020 7726 6111 BAILLIE GIFFORD SHIN NIPPON PLC The following is the unaudited preliminary statement for the year to 31 January 2008 which was approved by the Board on 6 March 2008. No dividend is payable. INCOME STATEMENT (unaudited) For the year ended For the year ended 31 January 2008 31 January 2007 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Losses on investments - (19,820) (19,820) - (23,173) (23,173) Currency (losses)/gains (note 2) - (1,312) (1,312) - 1,538 1,538 Income (note 3) 1,119 - 1,119 929 - 929 Investment management fee (559) - (559) (694) - (694) Other administrative expenses (238) - (238) (210) - (210) Net return before finance costs and taxation 322 (21,132) (20,810) 25 (21,635) (21,610) Finance costs of borrowings (249) - (249) (226) - (226) Net return on ordinary activities before taxation 73 (21,132) (21,059) (201) (21,635) (21,836) Tax on ordinary activities (69) - (69) (57) - (57) Net return on ordinary activities after taxation 4 (21,132) (21,128) (258) (21,635) (21,893) Net return per ordinary share 0.01p (68.01p) (68.00p) (0.84p) (70.70p) (71.54p) (note 5) The total column of this statement is the profit and loss account of the Company. All revenue and capital items in this statement derive from continuing operations. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. BAILLIE GIFFORD SHIN NIPPON PLC SUMMARISED BALANCE SHEET at 31 January 2008 (unaudited) At 31 January 2008 At 31 January 2007 £'000 £'000 Fixed Assets Investments 53,083 76,901 Current Assets Debtors 105 108 Cash and short term deposits 3,601 762 3,706 870 Creditors Amounts falling due within one year (271) (2,451) Net Current Assets/(Liabilities) 3,435 (1,581) Total Assets less Current Liabilities 56,518 75,320 Creditors Amounts falling due after more than one year (note 6) (11,354) (10,136) Net Assets 45,164 65,184 Share Capital and Reserves Called-up share capital 3,110 3,060 Share premium 7,674 6,616 Capital redemption reserve 21,521 21,521 Capital reserve - realised 18,571 34,357 Capital reserve - unrealised (563) 4,783 Revenue reserve (5,149) (5,153) Shareholders' funds 45,164 65,184 Net Asset Value Per Ordinary Share: (after deducting borrowings at fair value) 144.4p 213.0p Net Asset Value Per Ordinary Share: (after deducting borrowings at par value) 145.2p 213.0p BAILLIE GIFFORD SHIN NIPPON PLC RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 31 January 2008 (unaudited) Share Share Capital Capital Capital Revenue Total capital premium redemption reserve - reserve - reserve shareholders' reserve realised unrealised funds £'000 £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 February 2007 3,060 6,616 21,521 34,357 4,783 (5,153) 65,184 Ordinary shares issued 50 1,058 - - - - 1,108 Transfer between reserves (note - - - 3,749 (3,749) - - 1) Net return on ordinary activities after taxation - - - (19,535) (1,597) 4 (21,128) Shareholders' funds at 31 January 2008 3,110 7,674 21,521 18,571 (563) (5,149) 45,164 For the year ended 31 January 2007 Share Share Capital Capital Capital Revenue Total capital premium redemption reserve - reserve - reserve shareholders' reserve realised unrealised funds £'000 £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 February 2006 3,060 6,616 21,521 28,485 32,290 (4,895) 87,077 Return on ordinary activities after taxation - - - 5,872 (27,507) (258) (21,893) Shareholders' funds at 31 January 2007 3,060 6,616 21,521 34,357 4,783 (5,153) 65,184 BAILLIE GIFFORD SHIN NIPPON PLC SUMMARISED CASH FLOW STATEMENT (unaudited) Year to Year to 31 January 2008 31 January 2007 £'000 £'000 £'000 £'000 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES (Note 8) 281 (65) SERVICING OF FINANCE Interest paid (240) (238) NET CASH OUTFLOW FROM SERVICING OF FINANCE (240) (238) TAXATION Overseas tax suffered (67) (55) TOTAL TAX PAID (67) (55) FINANCIAL INVESTMENT Acquisitions of investments (9,734) (31,127) Disposals of investments 13,697 26,621 Realised currency gain/(loss) 189 (152) NET CASH INFLOW/(OUTFLOW) FROM FINANCIAL INVESTMENT 4,152 (4,658) NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 4,126 (5,016) FINANCING Ordinary shares issued 1,108 - Bank loans drawn down 2,162 - Bank loans repaid (4,557) - NET CASH OUTFLOW FROM FINANCING (1,287) - INCREASE/(DECREASE) IN CASH 2,839 (5,016) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Increase/(decrease) in cash 2,839 (5,016) Net outflow from bank loans 2,395 - Exchange movement on bank loans (1,501) 1,690 MOVEMENT IN NET DEBT IN THE YEAR 3,733 (3,326) NET DEBT AT 1 FEBRUARY (11,486) (8,160) NET DEBT AT 31 JANUARY (7,753) (11,486) BAILLIE GIFFORD SHIN NIPPON PLC TWENTY LARGEST EQUITY HOLDINGS at 31 January 2008 (unaudited) 2008 2007 Name Business Value % of Value total £'000 assets £'000 Pronexus Financial printing services 2,304 4.1 2,464 Shinko Plantech Engineering company 2,028 3.6 2,093 Nabtesco Hydraulic equipment 1,636 2.9 2,015 Aruze Sells and leases Pachislo machines 1,486 2.6 1,743 Message Provides nursing services for the elderly 1,444 2.6 2,621 Moshi Moshi Hotline Call centre operator 1,438 2.5 1,936 Modec Oil extraction machinery 1,432 2.5 1,370 Shoei Manufactures motorcycle helmets 1,427 2.5 - Nakanishi Dental equipment 1,289 2.3 1,520 EPS Provides clinical testing services 1,233 2.2 - USJ Operates a theme park in Japan 1,182 2.1 - Sugi Pharmacy Drugstore chain 1,181 2.1 1,010 Juki Sewing machines and electrical equipment 1,126 2.0 1,649 Japan Asia Investment Venture capital company 1,120 2.0 1,509 USS Company Second-hand car auctioneer 1,101 1.9 2,649 Intage Marketing research services 1,073 1.9 1,510 H.I.S. Discount travel agency 1,032 1.8 1,621 Horiba Manufacturer of measuring instruments and 1,030 1.8 1,821 analysers Nippon Information Development Computer system integration services 1,005 1.8 761 Funai Zaisan Consultants Consulting services 1,005 1.8 2,136 26,572 47.0 30,428 BAILLIE GIFFORD SHIN NIPPON PLC NOTES (unaudited) 1. The financial statements for the year to 31 January 2008 have been prepared on the basis of the same accounting policies used for the year to 31 January 2007. With effect from 1 February 2007, changes in fair value of investments which are readily convertible to cash, without accepting adverse terms, at the balance sheet date are included in realised, rather than unrealised capital reserves. The balances on both reserves at 1 February 2007 have been amended by a reserve transfer to reflect this change. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment. 31 January 2008 31 January 2007 £'000 £'000 2. Currency gains/(losses) Realised exchange differences 662 (152) Unrealised exchange differences (1,974) 1,690 (1,312) 1,538 3. Income includes stocklending fee income of £117,000 (2007 - £111,000). At 31 January 2008 the aggregate value of securities on loan amounted to £13.4m (2007 - £26.4m) and the aggregate value of the collateral, which was held in Japanese Government Bonds, amounted to £18.4m (2007 - £34.3m). The maximum aggregate value of securities on loan during the year amounted to £36.6m (2007 - £35.8m). 4. No dividend will be declared. 31 January 2008 31 January 2007 £'000 £'000 5. Return per ordinary share Revenue return 4 (258) Capital return (21,132) (21,635) Total return (21,128) (21,893) The returns per ordinary share set out below are based on the above returns and on 31,068,990 ordinary shares (2007 - 30,600,497), being the weighted average number of ordinary shares in issue during the year. Revenue return 0.01p (0.84p) Capital return (68.01p) (70.70p) Total return (68.00p) (71.54p) 6. Bank loans of £11.4 million (Y2.4 billion) have been drawn down under yen loan facilities which are repayable between August 2011 and March 2014 (31 January 2007 - £12.2 million (Y2.9 billion)). 7. At 31 January 2008 the Company had authority to buy back 4,661,964 shares. No shares were bought back during the year. Under the provisions of the Company's Articles share buy backs are funded from the realised capital reserve. During the year the Company issued 500,000 shares at a premium to net asset value for a total consideration of £1,108,000 resulting in an estimated uplift in net asset value per share of 0.04%. 2008 2007 £'000 £'000 8. Reconciliation of Net Return before Finance Costs and Taxation to Net Cash Inflow/(Outflow) from Operating Activities Net return before finance costs and taxation (20,810) (21,610) Losses on investments 19,820 23,173 Currency losses/(gains) 1,312 (1,538) Increase in accrued income (24) (22) Decrease/(increase) in other debtors 27 (2) Decrease in creditors (44) (66) 281 (65) BAILLIE GIFFORD SHIN NIPPON PLC NOTES (Ctd) (unaudited) 9. The Report and Accounts will be available on the Company's website www.shinnippon.co.uk on or around 28 March 2008. 10. The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 January 2008 under section 240 of the Companies Act 1985. The financial information for 2007 is derived from the statutory accounts for 2007, which have been delivered to the Registrar of Companies. The Auditors have reported on the 2007 accounts, their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2008 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held on 30 April 2008. None of the views expressed in this document should be construed as advice to buy or sell a particular investment. This information is provided by RNS The company news service from the London Stock Exchange

Companies

Baillie Gifford Shin Nippon (BGS)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today