Final Results
Scottish American Investment Co PLC
14 February 2001
14th February 2001
THE SCOTTISH AMERICAN INVESTMENT COMPANY PLC (SAINTS)
Preliminary Results (extracted from the audited Accounts) for the year ended
31st December 2000
Results
In 2000 the total return per share was minus 5.6 per cent compared with the
corresponding figure for the All-Share Index of minus 5.9 per cent. The
total return of our benchmark (65% FTSE All-Share Index : 35% FTSE World
ex-UK Index) was minus 5.2%.
The emphasis on companies which are expected to grow faster than the
overall rate of economic growth led to a strong performance in the early
part of the year, but the share prices of the more highly rated growth
companies came under increasing pressure as the year progressed. Because of
a cautious view on markets SAINTS maintained some liquidity for most of the
year. This together with holding some of the more defensive growth
companies kept SAINTS in touch with its benchmark.
Dividend
The Board of SAINTS recommends a final dividend of 1.39p net per share for
the year ended 31st December 2000, payable on 2nd April 2001 to
shareholders registered on 2nd March 2001. This will make a total dividend
for the year of 5.53p (1999 - 5.51p).
Gearing
SAINTS' investors are aware of the benefits of gearing and in December 2000
we took advantage of conditions in the market for fixed interest securities
to negotiate a further issue of our existing 2022 Debenture Stock. £35
million, at an all-in annual cost after expenses of just under 6.4 per
cent, was received in January and is not reflected in our balance sheet at
31st December 2000.
We continued to buy in the Equities Index Unsecured Loan Stock and have now
bought in over 80 per cent of the original issue.
Management Fee and Interest Costs
The investment management fee and the interest on the debenture stocks have
been split between the capital and income accounts in the ratio 75 to 25.
Previously they had been charged fully to the income account. The split is
in line with the expected long term returns between capital and income.
The investment management fee was changed in 2000 from being based partly
on shareholders' funds and partly on net income to being 0.3% of gross
assets. A performance fee was also introduced based on the net asset value
per share total return relative to the performance of the total return of
the benchmark (65% FTSE All-Share Index : 35% FTSE World ex UK Index).
Share Buy Back
During the year SAINTS bought back 12.2 million shares at a cost of £31.7
million. Buying back the shares at a discount enhanced the net asset value
of the remaining shares by 4.2p per share.
At the Annual General Meeting to be held on 28th March 2001 the Board will
seek renewal of a general authority to buy back shares in appropriate
circumstances subject to the defined limit of 14.99 per cent of the shares
then in issue.
Investment Manager
Stewart Ivory was acquired by Colonial Limited of Australia in March 2000.
Shortly thereafter, Colonial Limited was acquired by the Commonwealth Bank
of Australia. The Commonwealth Bank is therefore the ultimate parent of
Stewart Ivory. The new Australian group brings enhanced resources to our
managers and has enabled a move to larger, more modern premises while
remaining in the centre of Edinburgh.
The Board
During the year we welcomed Mr Brian Ivory to the Board. Until recently he
was Chairman of Highland Distillers. Among other public appointments and
directorships, he is on the Board of Bank of Scotland and Remy Cointreau.
Sir John Shaw will step down as Chairman of the Company at the end of June
2001 but will continue to serve as a Director until he retires by rotation
at the AGM in 2002. He will be succeeded as Chairman by Mr Brian Ivory
(subject to the approval of his formal election as a Director at the
forthcoming AGM).
Mr Barry Sealey will retire at the end of this year's AGM on 28th March.
Outlook
2000 was not an easy year, despite generally buoyant economic activity.
With the growth rate of the world economy slowing corporate profit
expectations have been reduced. However, generally lower interest rates
and, in some countries, easier fiscal policies should lead to a more
positive economic and market outlook in due course.
Results
Attached is a copy of the preliminary results. These are presented in a
format which summarises the information which will be given in the
forthcoming Annual Report and Accounts.
For further information, please contact:
Marcus Brooks or Teddy Tulloch
Colonial First State Investments 0131 473 2200
14 February 2001
STATEMENT OF TOTAL RETURN
FOR THE YEAR ENDED 31 DECEMBER 2000
2000 1999
(restated)(1)
£'000 £'000 £'000 £'000
Dividends and 10,839 15,788
interest
receivable
Other income 2,507 2,123
13,346 17,911
Expenses (1,910) (2,220)
Interest (2,855) (3,149)
Income before tax 8,581 12,542
Tax (787) (849)
Income 7,794 11,693
attributable to
shareholders
Dividends (8,662) (10,092)
Transferred (868) 1,601
(from) / to
Revenue Reserve
Return
attributable to
shareholders:
Income 7,794 11,693
Capital (42,654) 99,174
Total (34,860) 110,867
Total return per (21.79)p 55.38p
share -
Based on the
weighted average
number of shares
(2)
Income return per 4.87p 5.84p
share -
Based on the
weighted average
number of shares
(2)
Dividend per 5.53p 5.51p
share (net)
1.Figures restated in accordance with FRS16 - Current Tax and to reflect the
Board's decision to charge the management fee and debenture interest to
capital (75%) and income (25%) in line with the expected long-term split of
returns.
2. The weighted number of shares in issue during 2000 was 160,007,104 (1999 -
200,196,390).
Summary Balance Sheet as at 31 December 2000
2000 1999 (restated)(1)
£'000 £'000
Total Investments 526,238 654,806
Net Current Assets 17,013 61,252
Creditors due after one year:
Equities Index Unsecured Loan Stock (22,650) (119,972)
Debenture Stocks (55,821) (56,072)
Total Net Assets 464,780 540,014
Net Asset Value per share 296.8p 319.9p
Summary Cash Flow Statement for the year ended 31 December 2000
2000 1999
£'000 (restated)(1)
£'000
Cash and deposits at the start of the year 66,005 6,272
Income less administrative expenses 11,397 17,711
Cash paid in respect of interest and dividends (12,417) (15,605)
Taxation 712 (701)
Cash (paid) / received in respect of capital (45,043) 58,328
transactions
Cash and deposits at the year end 20,654 66,005
Reconciliation of total income as shown in the Statement of Total
Return to income less administrative expenses in the Cash Flow Statement
2000 1999
£'000 (restated)(1)
£'000
Total income per the Statement of Total Return 13,346 17,911
Total expenses per the Statement of Total Return (1,910) (2,220)
Decrease in dividends accounted for but for which 138 966
the cash had not been received at the year end
(Increase) / decrease in other debtors (407) 1,026
Increase in other creditors 230 28
Income less admin. expenses per Cash flow 11,397 17,711
Statement
Notes
The preliminary statement is not the Company's statutory accounts. The
statutory accounts for the year ended 31st December 1999 have been
delivered to the Registrar of Companies and contained an audit report which
was unqualified and did not contain statements under Section 237(2) or (3)
of the Companies Act 1985.
(1) Figures restated in accordance with FRS16 - Current Tax and to reflect
the Board's decision to charge the management fee and debenture interest to
capital (75%) and income (25%) in line with the expected long-term split of
returns.
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