Interim Results

RIT Capital Partners PLC 26 October 2000 26 October 2000 PRELIMINARY ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2000 During the half year to 30 September, the Company's net asset value per share increased by 2.5%, from 509.0p to 521.9p. Over the same period, the Morgan Stanley Capital International Index (in Sterling), the FTSE All-Share Index and the Investment Trust Net Assets Index declined by 1.6%, 2.6% and 2.0% respectively. RITCP continues to outperform these indices over the long term. RITCP's net asset value per share on 24 October was 511.4p. In his Statement in the most recent Annual Report, the Chairman commented that we were concerned about stock market valuations, particularly of 'new economy' growth stocks. Over the subsequent six months, this sector of the market has displayed exceptional volatility. In response to this uncertainty, we continue to retain a significant element of liquidity in the portfolio, with our holdings of cash and government securities amounting to £179 million at 30 September. INVESTMENT PORTFOLIO At the interim stage, nearly half the portfolio was in quoted investments, 19.5% in unquoted investments, 14.4% in specialist funds, 13.7% in government securities and 3.6% in property. Faced with volatile market conditions, we have sought to diversify the portfolio with added emphasis on activities which are less directly correlated to stock markets. Accordingly, we have increased our allocation to 'merger arbitrage', where the aim is to hedge the market risk as far as possible. The external managers that we employ in this area take positions in companies involved in an acquisition or merger, taking advantage of discrepancies between the current share prices of both companies and the values implied by the terms of the transaction. Over the last few months, returns in this area have been at historically high levels. As mentioned in the last Annual Report, we have also increased our allocation to the private equity sector through commitments to a number of partnerships, mostly managed by leading US private equity firms, which invest in both the US and Europe. We are pleased to offer our shareholders exposure to these funds, some of which are difficult to access, even for institutional investors. Our investments in this area are included in the 'specialist funds' section of the portfolio. SHARE BUY-BACK During the six months under review, RITCP bought back 2.575 million of its own shares for cancellation at a total cost of some £11 million. The extent to which we can make use of this facility to boost our net asset value per share is limited, in practice, by the number of shares that become available. RESULTS The total return before tax for the six months to 30 September was £20.7 million. In line with our established policy, RITCP will not be paying an interim dividend. For further information please contact: Duncan Budge 020-7514 1928 CONSOLIDATED STATEMENT OF TOTAL RETURN for the six months ended 30 September 2000 Revenue Capital Total £'000 £'000 £'000 Gains on investments - 8,988 8,988 Dealing profits 6,815 - 6,815 Investment income 12,741 - 12,741 Other income 181 - 181 Administrative expenses (2,578) - (2,578) Investment management fees (1,710) - (1,710) Other capital items - (3,495) (3,495) Net return before finance costs 15,449 5,493 20,942 and taxation Interest payable and similar (267) - (267) charges Return on ordinary activities 15,182 5,493 20,675 before taxation Taxation on ordinary activities (3,878) 1,084 (2,794) Return on ordinary activities after taxation attributable to 11,304 6,577 17,881 equity shareholders Dividends 61 - 61 Transfer to reserves 11,365 6,577 17,942 Return per ordinary share 7.2p 4.2p 11.4p The revenue column of this statement is the consolidated profit and loss account of the Group. The accompanying notes are an integral part of this statement. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. CONSOLIDATED STATEMENT OF TOTAL RETURN for the six months ended 30 September 1999 Revenue Capital Total £'000 £'000 £'000 Gains on investments - 19,885 19,885 Dealing profits 65 - 65 Investment income 13,853 - 13,853 Other income 545 - 545 Administrative expenses (2,294) - (2,294) Investment management fees (1,383) - (1,383) Premium on purchase of - (828) (828) convertible stock Other capital items - (2,529) (2,529) Net return before finance costs 10,786 16,528 27,314 and taxation Interest payable and similar (644) - (644) charges Return on ordinary activities 10,142 16,528 26,670 before taxation Taxation on ordinary activities (2,238) 630 (1,608) Return on ordinary activities after taxation attributable to 7,904 17,158 25,062 equity shareholders Dividends 329 - 329 Transfer to reserves 8,233 17,158 25,391 Return per ordinary share Basic 4.6p 10.1p 14.7p Fully diluted 4.5p 9.6p 14.1p The revenue column of this statement is the consolidated profit and loss account of the Group. The accompanying notes are an integral part of this statement. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. CONSOLIDATED BALANCE SHEET 30 31 30 September March September 2000 2000 1999 £'000 £'000 £'000 Fixed assets Investments 749,002 796,687 663,637 Tangible fixed assets 256 196 190 749,258 796,883 663,827 Current assets 135,546 78,942 67,799 Creditors: Amounts falling due (30,449) (30,727) (41,454) within one year Net current assets 105,097 48,215 26,345 Total assets less current liabilities 854,355 845,098 690,172 Creditors: Amounts falling due after more than one year Bank loans (25,003) (24,414) - Provisions for liabilities and charges (10,840) (9,298) (5,712) 818,512 811,386 684,460 Capital and reserves Called up share capital 156,848 159,423 157,372 Capital redemption reserve 33,308 30,733 25,648 Capital reserve - realised 509,676 458,180 430,372 Capital reserve - unrealised 92,604 148,491 57,533 Revenue reserve 26,076 14,559 13,535 Equity shareholders' funds 818,512 811,386 684,460 Diluted net asset value per 509.0p 420.2p share 521.9p Undiluted net asset value per 521.9p 509.0p 434.9p share Diluted net assets £818.5m £811.4m £691.7m CONSOLIDATED CASH FLOW STATEMENT Period Ended Year Ended Period Ended 30 September 31 March 30 September 2000 2000 1999 £'000 £'000 £'000 Cash inflow/(outflow) from 3,175 4,136 (1,187) operating activities Servicing of finance Bank and loan interest paid (266) (716) (121) Interest on convertible stock - (184) (94) Interest on US Dollar loan notes - (6,035) (6,035) Net cash outflow from servicing (266) (6,935) (6,250) of finance Taxation UK tax (paid)/received (32) (33) 45 Overseas tax paid (700) (864) (706) Net cash outflow from taxation (732) (897) (661) Financial investment Purchase of investments (273,226) (361,113) (131,085) Sale of investments 340,717 580,358 389,344 Net cash inflow from financial 67,491 219,245 258,259 investment Capital expenditure Purchase of fixed assets (151) (100) (26) Sale of fixed assets 34 10 - Net cash outflow from capital (117) (90) (26) expenditure Equity dividends paid (4,881) (3,674) (3,674) Net cash inflow before - - - management of liquid resources 64,670 211,785 246,461 and financing Management of liquid resources Purchase of government (198,890) (762,685) (347,622) securities Sale of government securities 180,258 763,222 296,227 Net cash (outflow)/inflow from (18,632) 537 (51,395) management of liquid resources Financing Buy-back of ordinary shares (10,968) (114,047) (82,674) Increase in term loans - 24,414 - Repayment of US Dollar loan - (91,587) (91,587) notes Purchase of convertible stock - (1,582) (1,128) Net cash outflow from financing (10,968) (182,802) (175,389) Increase in cash in the period 35,070 29,520 19,677 NOTES 1 ACCOUNTING POLICIES The accounting policies used by the Group in the preparation of this interim report are consistent with those applied in preparing statutory accounts for the year ended 31 March 2000. 2 DIVIDEND During the period the Company purchased some of its own shares prior to the ex-dividend date. As a result, there was a reduction of £0.1 million in the dividend for the year ended 31 March 2000 which was paid to shareholders on 7 July 2000. This amount has been credited to the revenue account in the current period. 3 RETURN PER ORDINARY SHARE The return per share for the six months ended 30 September 2000 is based on the revenue return after tax of £11.3 million and the capital return after tax of £6.6 million, and the weighted average number of ordinary shares in issue during the period of 157.8 million. 4 MOVEMENTS IN FIXED ASSET INVESTMENTS Unquoted Specialist Government Quoted and Funds Securities Total £million Property £million £million £million £million At 31 March 2000 462.0 163.7 84.1 86.9 796.7 Additions 233.7 13.9 21.6 198.9 468.1 Disposals (337.5) (8.1) (4.1) (180.2) (529.9) Reclassification 1.3 (1.3) - - - Revaluation 6.1 4.6 6.0 (2.6) 14.1 At 30 September 2000 365.6 172.8 107.6 103.0 749.0 5 SHARE CAPITAL £'000 At 31 March 2000 159,423 Purchased during the period and subsequently cancelled (2,575) At 30 September 2000 156,848 During the period the Company purchased 2.575 million ordinary shares at a cost of £11 million. This amount has been charged to Capital Reserve. The authorised share capital of the Company is 320 million ordinary £1 shares. 6 MOVEMENTS IN RESERVES Capital Capital Revenue Redemption Reserve Reserve Reserve £'000 £'000 £'000 At 31 March 2000 30,733 606,671 14,559 Profit for the period - - 11,365 Capital return for the period - 6,577 - Cost of share buy-backs - (10,968) - Other movements 2,575 - 152 33,308 602,280 26,076 7 CONTINGENCIES AND FINANCIAL COMMITMENTS There has been no material change to the position reported at 31 March 2000 in connection with the litigation proceedings issued in New York by Richbell Information Services Inc. 8 STATUTORY ACCOUNTS The financial information in this publication is unaudited and does not constitute statutory accounts. The statutory accounts for the year ended 31 March 2000 have been delivered to the UK Registrar of Companies and the report of the auditors on those accounts was unqualified. 9 INTERIM REPORT The Company's Interim Report for the six months ended 30 September 2000 will be posted to shareholders on Wednesday, 1 November 2000. Copies of this announcement and the Interim Report will be available to the public at the Company's registered office at 27 St James's Place, London SW1A 1NR.

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