Interim Management Statement

RNS Number : 8455P

British Assets Trust PLC

23 July 2010

 



British Assets Trust plc

Interim Management Statement

For the Period from 1 April 2010 to  23 July 2010

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 30/06/10	Nine months to 30/06/10
Net asset value	-12.0%	-0.5%
Composite Index2	-11.6%	-0.5%
Capital Values	As at  30/06/10	As at  31/03/10
Net asset value	116.6p	133.7p
Share price (mid market)	107.0p	119.2p
Discount  - Basic  - Debt adjusted	8.2% 6.0%	10.8% 7.9%
Gearing  - Net of cash3  - Equity gearing 4	22.5% 8.7%	19.3% 5.1%

Sources: F&C Investment Business Limited, Datastream.

¹           All total return calculations 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)/shareholders' funds

⁴           Equity gearing: (equity investments-shareholders' funds)/shareholders' funds

Review for the Third Quarter and Year to Date

For the three month period ended 30 June 2010, the Company's net asset value total return was -12.0%. This compares with a return of -11.6% from the composite benchmark index of 75% FTSE All-Share Index and 25% FTSE World (ex UK) Index. The effect of gearing in a falling market was the main reason for the underperformance during the quarter.

For the nine month period ended 30 June 2010, the Company's net asset value total return was -0.5%, which matches the return from the composite benchmark index.

During the quarter under review, global stockmarkets were weak as the sovereign debt crisis in the Eurozone continued to undermine confidence in the economic recovery. The downgrade of Greece's government debt to junk status resulted in a sell off in financial markets as fears grew that debt restructuring or default could spread quickly to other countries and once again threaten stability in financial markets.  

During the period, the UK stockmarket was also affected by the significant fall in the share price of BP, which continues to dominate the press and recently announced that it was cancelling three quarterly dividends and setting up a $20 billion compensation fund for US businesses impacted by the oil spill.

That said, the economic news in recent months has generally been favourable. In the US, there is now evidence that employment growth is recovering and capital expenditure is accelerating. Even in the Eurozone the Northern economies, led by Germany, are doing well. In Asia, the export recovery is very strong and consumer spending is increasing. Furthermore, earnings continue to benefit from improving sales growth, limited wage growth and far less extraordinary losses. However, with the overall economic outlook still uncertain, stockmarket returns are likely to remain muted in the months ahead.

Dividends

First and second interim dividends in respect of the year ended 30 September 2010, each of 1.442p per share, were paid on 9 April and 9 July 2010 respectively. The Company has today declared a third interim dividend of 1.442p per share which will be paid on 8 October 2010 to shareholders on the register on 10 September 2010.

Share Buy Backs

There were no share buy backs during the period.

Top Ten Holdings as at 30/06/10

Company	Country	% of total assets
HSBC Holdings	UK		5.0
GlaxoSmithkline	UK		3.8
Vodafone Group	UK		3.7
Royal Dutch Shell	UK		3.6
Rio Tinto	UK		3.4
BP	UK		2.7
British American Tobacco	UK		2.7
AstraZeneca	UK		2.7
Scottish and Southern Energy	UK		2.2
Tesco	UK		2.2
Total			32.0

Geographical Analysis as at 30/06/10

			% of total assets
UK				61.9
Global Developed (ex UK)				14.4
Emerging Markets				10.3
Corporate Bonds				11.0
Net Current Assets				2.4
Total				100.0

The Board is not aware of any significant events or transactions which have occurred since 30 June 2010 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

This statement and 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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