Final Results
Scottish Mortgage & Trust PLC
26 April 2002
THE SCOTTISH MORTGAGE AND TRUST PLC
Results for the year to 31 March 2002
After an improved second half, Scottish Mortgage's final results showed a
performance almost exactly in line with the benchmark index of 50% FTSE
All-Share Index and 50% FTSE World Ex. UK Index (in sterling terms). Net asset
value fell by 5.3% compared to a 5.2% decline in the index. In the second half,
the Trust outperformed its index by 3.6%. The total dividend has been increased
by 4.2% representing the 20th consecutive annual increase in real terms.
• During the year markets were dominated by political shocks, global
economic weakness and corporate earnings disappointments. Market conditions
during the year were difficult as the world economy was already under strain
at the start of the period. Overall American operating earnings fell by 20%
during the year which is more than in any 12 month period since the 1930s.
However, monetary stimulus and increased government expenditure revived the
US economy and prevented a full recession. The UK economy was resilient and
corporate profits were flat.
• Improved second half performance. In the second half, the net asset value
rose by 14.9% against a gain of 11.3% in the benchmark index. Performance in
the key UK market was good throughout the year helped by being underweight
in telecommunications stocks and heavily exposed to defensive growth areas
such as beverage and tobacco stocks. Good US stock selection was based on
exposure to housing related financial stocks and a light weighting in the
troubled parts of technology and communications markets.
• Dividend and Earnings. A proposed final dividend of 4.25p gives a total of
6.25p for the year representing a 4.2% rise. Earnings per share were almost
unchanged at 7.56p compared with 7.57p in the previous year. The 2000/1
figure would have been 8.44p if there had not been a deferred tax write-off
charge of £2.9m. The 10.4% fall from this underlying figure reflects a
decline in fixed income earnings.
• Improving outlook. It is unclear how vigorous the international economic
recovery will be and there is a volatile and dangerous political situation
in the Middle East. However, it is hoped that after two consecutive years of
declining markets, the picture will be more encouraging in twelve months
time. Being of a high quality, diversified and flexible, the portfolio
should benefit from any improvement in conditions.
The Scottish Mortgage and Trust PLC aims to maximise total return to
shareholders at the same time as generating real dividend growth through
investment in UK and international markets. The trust has total assets of £1.5
billion. An ISA and Share Plan are available.
Scottish Mortgage is managed by Baillie Gifford & Co., the leading Edinburgh
based fund management group with around £22 billion under management and advice.
26 April 2002.
- ends -
For further information please contact:
James Anderson, Manager,
The Scottish Mortgage and Trust PLC 0131 222 4000
Mike Lord, Director,
Broadgate Marketing 020 7726 6111
Baillie Gifford & Co. is regulated by the FSA.
THE SCOTTISH MORTGAGE AND TRUST PLC
The following is the unaudited preliminary statement for the year to 31 March
2002 which was approved by the Board on 25 April 2002. The Board of The Scottish
Mortgage and Trust PLC is recommending to the Annual General Meeting of the
Company to be held on 4 July 2002 the payment of a final dividend of 4.25p
(4.10p net last year) per ordinary share making 6.25p net (6.00p net last year)
for the year ended 31 March 2002.
STATEMENT OF TOTAL RETURN
(unaudited and incorporating the revenue account*)
For the year ended For the year ended
31 March 2002 31 March 2001
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Losses on investments - (89,951) (89,951) - (401,816) (401,816)
Currency gains/(losses) - 3,447 3,447 - (8,477) (8,477)
Income (note 2) 36,377 - 36,377 44,075 - 44,075
Investment management fee (2,695) (2,695) (5,390) (3,408) (3,408) (6,816)
Other administrative expenses (1,103) - (1,103) (1,811) - (1,811)
Net return before finance costs
and taxation 32,579 (89,199) (56,620) 38,856 (413,701) (374,845)
Finance costs of borrowings (7,396) (7,393) (14,789) (9,661) (9,661) (19,322)
Return on ordinary activities
before taxation 25,183 (96,592) (71,409) 29,195 (423,362) (394,167)
Tax on ordinary activities (970) - (970) (3,983)++ - (3,983)++
Return on ordinary activities
after taxation 24,213 (96,592) (72,379) 25,212 (423,362) (398,150)
Dividends in respect of equity
shares (19,453) - (19,453) (19,679) - (19,679)
Transfer to/(from) reserves 4,760 (96,592) (91,832) 5,533 (423,362) (417,829)
Return per ordinary share 7.56p (30.17p) (22.61p) 7.57p (127.14p) (119.57p)
(note 3)
Dividend per ordinary share 6.25p 6.00p
(note 4)
* The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
++Inclusive of £2,879,000 deferred tax balance written off.
THE SCOTTISH MORTGAGE AND TRUST PLC
SUMMARISED BALANCE SHEET
at 31 March 2002
(unaudited)
31 March 2002 31 March 2001
£'000 £'000
NET ASSETS 1,493,041 1,633,893
Fixed asset investments
Net liquid assets 16,846 26,289
Total assets (before deduction of loans and debentures) 1,509,887 1,660,182
Loans and debentures (note 5) (206,899) (195,893)
1,302,988 1,464,289
CAPITAL AND RESERVES
Called-up share capital 77,296 82,179
Capital reserves 1,177,670 1,338,848
Revenue reserve 48,022 43,262
Equity shareholders' funds 1,302,988 1,464,289
NET ASSET VALUE PER ORDINARY SHARE
(after deduction of prior charges at par) 423.6p 447.5p
Ordinary shares in issue (note 6) 309,184,688 328,717,888
DISTRIBUTION OF ASSETS
at 31 March 2002
(unaudited)
31 March 2002 31 March 2001
% %
Equities: United Kingdom 45.9 40.9
Continental Europe 12.7 18.1
North America 24.2 18.9
Japan 4.4 7.5
Asia Pacific 4.1 4.5
Other Emerging Markets 2.6 2.6
Total equities 93.9 92.5
United Kingdom bonds 2.8 1.8
European bonds 2.2 2.2
North American bonds - 0.6
Argentine bonds - 1.3
Net liquid assets 1.1 1.6
Total assets (before deduction of loans and debentures) 100.0 100.0
THE SCOTTISH MORTGAGE AND TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
For the year ended For the year ended
31 March 2002 31 March 2001
£'000 £'000 £'000 £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 29,925 33,018
NET CASH OUTFLOW FROM SERVICING OF FINANCE (15,012) (17,811)
TOTAL TAX PAID (1,032) (3,541)
FINANCIAL INVESTMENT
Acquisitions of investments (495,639) (856,742)
Disposals of investments 539,802 1,015,473
Realised currency (loss)/gain (552) 1,616
NET CASH INFLOW FROM FINANCIAL INVESTMENT 43,611 160,347
EQUITY DIVIDENDS PAID (19,791) (19,242)
NET CASH INFLOW BEFORE FINANCING 37,701 152,771
FINANCING
Shares purchased for cancellation (67,249) (45,466)
Loans repaid (79,350) (259,519)
Loans drawn down 94,423 176,969
Realised currency loss on multi-currency loans (26) (10,626)
NET CASH OUTFLOW FROM FINANCING (52,202) (138,642)
(DECREASE)/INCREASE IN CASH (14,501) 14,129
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
(Decrease)/increase in cash in the period (14,501) 14,129
(Increase)/decrease in bank loans (15,047) 93,176
Exchange movement 3,999 (10,093)
Other non-cash changes 42 34
MOVEMENT IN NET DEBT IN THE PERIOD (25,507) 97,246
NET DEBT AT 1 APRIL (163,113) (260,359)
NET DEBT AT 31 MARCH (188,620) (163,113)
THE SCOTTISH MORTGAGE AND TRUST PLC
NOTES
1. The financial statements for the year to 31 March 2002 have been prepared on the basis of the accounting policies
set out in the Company's financial statements as at 31 March 2001.
31 March 2002 31 March 2001
£'000 £'000
2. Income
Income from investments and interest receivable 36,368 44,039
Other income 9 36
3. Return per ordinary share
Revenue return 24,213 25,212
Capital return (96,592) (423,362)
Return per ordinary share is based on the above returns and on 320,181,479 (2001 - 332,981,965) ordinary shares,
being the weighted average number of ordinary shares in issue during the year.
4. The total cost of the dividend for the year is £19,453,000 (2001 - £19,679,000). If approved the final dividend
will be paid on 10 July 2002 to all shareholders on the register at the close of business on 14 June 2002.
5. Loans and debentures include Y5,900 million drawn down under a multi-currency loan facility and Y4,400 million
under a short term yen loan facility (2001 - €70 million under a short term multi-currency facility).
Net asset value per share (with debenture stocks at market value) was 409.4p (2001 - 430.9p). The market value of
debenture stocks at 31 March 2002 was £189,398,000 (2001- £200,048,000).
6. At the Annual General Meeting on 5 July 2001 the Company renewed its authority to purchase shares in the market,
in respect of 48,499,079 ordinary shares (equivalent to 14.99% of its issued share capital at that date). In the
year to 31 March 2002 a total of 19,533,200 (2001 - 10,003,112) ordinary shares with a nominal value of
£4,883,000 were bought back at a total cost of £69,469,000 (2001 - £45,466,000). At 31 March 2002 the Company had
authority to buy back a further 34,140,879 ordinary shares.
7. The financial information set out above does not constitute the Company's statutory accounts for the year ended
31 March 2002. The financial information for 2001 is derived from the statutory accounts for 2001 which have been
delivered to the Registrar of Companies. The Auditors have reported on the 2001 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 2002 are unaudited, however it is expected that the Auditors will issue an unqualified opinion. The
statutory accounts for 2002 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.
This information is provided by RNS
The company news service from the London Stock Exchange
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