Interim Management Statement

RNS Number : 2530M

British Assets Trust PLC

26 January 2009

 



British Assets Trust plc

Interim Management Statement

For the Three Month Period 1 October 2008 to 31 December 2008

Investment Objective

British Assets Trust plc aims to achieve a total return in excess of a composite index, weighted as to 75 per cent FTSE All-Share Index and 25 per cent FTSE World (ex UK) Index, by investing principally in a diversified international portfolio of equities and equity-related securities.  Within this overall objective, the Company aims to maintain a progressive dividend policy which will be dependent upon, inter alia, the rate of revenue growth within the investment portfolio, and the level of dividend cover. 

Performance Summary

Total Return1		Three months to 31/12/08
Net asset value		-10.0%
Composite Index2		-8.3%
Capital Values	As at  31/12/08	As at  30/09/08
Share price (mid market)	91.00p	100.75p
Discount   - Basic  - Debt adjusted	10.3% 9.1%	11.6% 10.6%
Gearing  - Net of cash3  - Equity gearing 4	23.3% 9.7%	20.5% 11.6%

Sources: F&C Investment Business Limited, Datastream.

 

¹               All total returns are based on net dividends re-invested

²               Composite Index of 75 per cent FTSE All-Share Index and 25 per cent FTSE World (ex UK) Index

³               Gearing net of cash: investments/shareholders’ funds

⁴               Equity gearing: equity investments/shareholders’ funds

Review for the Period

The Company's net asset value total return for the three months ended 31 December 2008 was -10.0%. This compares with a return of -8.3% from the composite benchmark index of 75% FTSE All-Share Index and 25% FTSE World (ex UK) Index. Gearing in a falling market was the main reason for the underperformance during the period. The corporate bond portfolio provided a boost to performance as did asset allocation, reflecting the favourable move into a new global emerging markets portfolio at the beginning of December. Stock selection was a positive contributor to relative performance. The Company benefited from the weakness in sterling, with enhanced returns in overseas markets, as the Euro, dollar and yen all made significant gains against the pound. 

During the quarter, central banks signalled a renewed determination to address the risks posed to global growth with an aggressive series of interest rate cuts. Further initiatives, such as fiscal stimulus, to help limit the global economic downturn were also announced. 

  In the UK, The Bank of England cut interest rates by 250 basis points, with the base rate at 2% at the year end, and the UK Chancellor unveiled £20 billion of tax cuts in his pre-budget report in an attempt to halt the economic decline. Barrack Obama won the US presidential election and vowed to introduce a massive fiscal stimulus package as soon as he takes office in January. This was followed by the announcement of a US$586 billion stimulus package in China and a €50billion economic stimulus plan in Germany aimed at boosting the economy.

Following a sharp fall in October, global stockmarkets remained volatile in November as attention shifted from the financial crisis to the real economy, as output and employment leading indicators collapsed. Markets saw a modest recovery in December. Interest rate cuts continued to dominate the news towards the year end led by a 0.75% cut in US interest rates and the Federal Reserve clearly stating that it was willing to use every tool at its disposal to provide support to the financial system. 

The overseas portfolio was repositioned during the quarter into a global developed and a global emerging markets portfolio, shifting away from regional portfolios based on geographic domicile. As reported in the recent Chairman's Statement in the Annual Report, the reason for the change is to provide greater focus on the best individual investment opportunities overseas.

Dividends

A third interim dividend in respect of the year ended 30 September 2008, of 1.4p per share, was paid on 10 October 2008.

Share Buy Backs

There were no share buy backs during the period. 

Top Ten Holdings as at 31/12/08

Company	Country	% of total assets
BP	UK		7.2
Vodafone Group	UK		4.9
GlaxoSmithkline	UK		4.3
Royal Dutch Shell	UK		3.8
AstraZeneca	UK		3.4
HSBC Holdings	UK		2.7
Imperial Tobacco Group	UK		2.3
BG Group	UK		2.0
Unilever	UK		1.8
Cable and Wireless	UK		1.8
Total			34.2

Geographical Analysis as at 31/12/08

			%of total assets
UK				57.6
Global Developed (ex UK)				15.8
Emerging Markets				10.8
Corporate Bonds				10.4
Net Current Assets				5.4
Total				100.0

The Board is not aware of any significant events or transactions which have occurred since 31 December 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and Key Information

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.british-assets.co.uk, or at www.fandc.com.

For further information please contact:

Julie Dent/Gordon Hay Smith

F&C Investment Business Limited

Tel: [phone]

 

END

 

 

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