Final Results
Merchants Trust PLC
07 March 2005
For Immediate Release 7 March 2005
THE MERCHANTS TRUST PLC
ANNOUNCEMENT OF PRELIMINARY RESULTS
For the year ended 31 January 2005
Highlights
• The Net Asset Value total return recorded by the Trust's shares was
+21.3%, compared with +14.3% by the FTSE 100 index.
• The Net Asset Value per share rose by 16.2% compared with a rise of
10.5% in the FTSE 100 Index. Before the impact of gearing and costs, the capital
return on the Company's portfolio was 14.0%.
• Net dividends totalled 18.00p per share in 2004/05, an increase of
2.3%. This is the twenty-third consecutive annual increase.
• Ordinary shares yield 4.7% at 381.0p, compared with 3.1% on the FTSE
100 Index at the close of business on 7 March 2005.
Net Asset Value
The Net Asset Value per ordinary share at 31 January 2005 was 406.8p compared
with 350.1p at 31 January 2004, an increase of 16.2%. This compares with an
increase of 10. 5% recorded by the FTSE 100 Index and one of 15.3% recorded by
the FTSE 350 Higher Yield Index. Before allowance is made for the impact of
borrowings and costs, the capital return on the Company's portfolio was 14.0%.
Ordinary Dividend
The Board has declared a final dividend of 4.5p per share, payable on 11 May
2005 to holders of record at the close of business on 15 April 2005. This gives
a total of 18.00p for the year ended 31 January 2005, an increase of 2.3% when
compared with the total distribution of 17.60p paid during the previous year.
The Trust has now recorded an unbroken record of dividend increases over the
last twenty-three years.
Total Return and Earnings
The Net Asset Value total return, including capital and income, recorded by the
Trust's shares in the last financial year was +21.3%. The equivalent return
recorded by the FTSE 100 index was +14.3%. Net earnings per share rose from
17.34p to 17.58p or by 1.4%.
Page 2
Prospects
The UK equity returns seen in the last year suggest that valuations are, in
isolation, less attractive than twelve months ago. However most financial
assets have recorded an appreciation in values, not least because there has been
a further fall in bond yields as investors have sought long term security of
returns. This augurs well for higher yielding shares, whose attractions are
re-inforced by the recent strength of dividend payments. This may be expected
to sustain investors' interest in the higher yielding sector of the UK share
market.
Annual General Meeting
The Annual General Meeting of the Company will be held at 20 Moorgate, London
EC2R 6DA on Tuesday 10 May 2005 at 12.00 noon.
Share Buy Backs
The Board has decided to recommend to shareholders that the Company takes
renewed powers to buy back its Ordinary Shares. Full details will be sent to
shareholders in the forthcoming Annual Report and Accounts.
By Order of the Board
P W I Ingram
Deputy Secretary
155 Bishopsgate
London EC2M 3AD
Page 3
Unaudited preliminary results for the year ended 31 January 2005 were approved
for immediate release as undernoted:
RESULTS
STATEMENT OF TOTAL RETURN
for the year ended 31 January 2005
2005
(£000s) (£000s) (£000s)
Revenue Capital Total
(Note 3)
Net gains on investments - 65,860 65,860
Income 22,675 - 22,675
Investment management fee (722) (1,342) (2,064)
Other expenses (594) - (594)
Net return before finance costs and taxation 21,359 64,518 85,877
Finance costs of borrowings (3,365) (6,210) (9,575)
Return on ordinary activities before taxation 17,994 58,308 76,302
Taxation - - -
Return on ordinary activities after taxation for the 17,994 58,308 76,302
financial year
Dividends on Preference Stock (43) - (43)
Return attributable to Ordinary Shareholders 17,951 58,308 76,259
Dividends on Ordinary Shares (see below) (18,380) - (18,380)
Transfer (from) to reserves (429) 58,308 57,879
Return per Ordinary Share (Note 1) 17.58p 57.11p 74.69p
Dividends on Ordinary Shares: 2005 (£000s)
First Interim paid 4.50p 4,595
Second Interim paid 4.50p 4,595
Third Interim payable 4.50p 4,595
Final payable 11 May 2005 4.50p 4,595
18.00p 18,380
NET ASSET STATEMENT as at 31 January 2005 2005 (£000s)
Fixed Asset Investments 535,095
Net Current Liabilities (6,454)
528,641
Less: Creditors - amounts falling due after more than one year (112,141)
Total Net Assets 416,500
Called up Share Capital : Ordinary 25,526
: Preference 1,178
Share Premium Account 40
Capital Redemption Reserve 56
Capital Reserves : Realised 322,240
: Unrealised 57,963
Revenue Reserve 9,497
416,500
Net asset value per Ordinary Share (Note 2) 406.8p
Page 4
RESULTS
STATEMENT OF TOTAL RETURN
for the year ended 31 January 2004
2004
(£000s) (£000s) (£000s)
Revenue Capital Total
(Note 3)
Net gains on investments - 91,703 91,703
Income 22,247 - 22,247
Investment management fee (663) (1,230) (1,893)
Other expenses (502) - (502)
Net return before finance costs and taxation 21,082 90,473 111,555
Finance costs of borrowings (3,332) (6,169) (9,501)
Return on ordinary activities before taxation 17,750 84,304 102,054
Taxation (5) - (5)
Return on ordinary activities after taxation for the 17,745 84,304 102,049
financial year
Dividends on Preference Stock (43) - (43)
Return attributable to Ordinary Shareholders 17,702 84,304 102,006
Dividends on Ordinary Shares (see below) (17,971) - (17,971)
Transfer (from) to reserves (269) 84,304 84,035
Return per Ordinary Share (Note 1) 17.34p 82.57p 99.91p
Dividends on Ordinary Shares: 2004 (£000s)
First Interim paid 4.30p 4,390
Second Interim paid 4.30p 4,391
Third Interim payable 4.50p 4,595
Fourth interim payable 2 April 2004 4.50p 4,595
17.60p 17,971
NET ASSET STATEMENT as at 31 January 2004 2004 (£000s)
Fixed Asset Investments 473,912
Net Current Liabilities (3,175)
470,737
Less: Creditors - amounts falling due after more than one year (112,117)
Total Net Assets 358,620
Called up Share Capital : Ordinary 25,526
: Preference 1,178
Share Premium Account 40
Capital Redemption Reserve 56
Capital Reserves : Realised 331,129
: Unrealised (9,234)
Revenue Reserve 9,925
358,620
Net asset value per Ordinary Share (Note 2) 350.1p
Page 5
CASH FLOW STATEMENT
For the years ended 31 January 2005 and 2004
2005 (£000s) 2005 (£000s) 2004 (£000s)
Net cash inflow from operating activities 22,381 20,141
Servicing of Finance
Interest paid (9,543) (9,460)
Preference dividends paid (43) (21)
Net cash outflow on servicing of finance (9,586) (9,481)
Investing Activities
Payments to acquire fixed asset investments (142,790) (148,695)
Proceeds on disposal of fixed asset investments 145,334 158,188
Net cash inflow from investing activities 2,544 9,493
Equity dividends paid (18,379) (17,562)
Net cash (outflow) inflow before financing (3,040) 2,591
Financing
Decrease in short term loan - (224)
(Decrease) increase in cash (3,040) 2,367
Page 6
Note 1
The Returns per Ordinary Share have been calculated using a weighted average
number of shares in issue during the year of 102,103,936 shares (2004 -
102,103,936).
Note 2
The net asset value is based on 102,103,936 Ordinary Shares in issue at the
year-end (2004 - 102,103,936).
Note 3
The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items derive from continuing operations. No operations
were acquired or discontinued in the year.
Note 4
The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31 January 2005 or 31 January
2004. The financial information for the year ended 31 January 2004 has been
extracted from the statutory accounts for that year which have been delivered to
the Registrar of Companies. The auditors report on those accounts was
unqualified and did not contain a statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985. The statutory accounts for the year
ended 31 January 2005 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
For further information, please contact:
RCM (UK) Ltd
Simon White/Nigel Lanning
Tel: 020 7859 9000
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