Interim Management Statement

RNS Number : 2505W

British Assets Trust PLC

26 January 2012

 



British Assets Trust plc

Interim Management Statement

For the Period from 1 October 2011 to 26 January 2012

Investment Objective

British Assets Trust plc aims to achieve a total return in excess of a composite index, weighted as to 80 per cent FTSE All-Share Index and 20 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 31/12/11
Net asset value2		+7.5%
Composite index3		+8.2%
Capital Values	As at  31/12/11	As at  30/09/11
Net asset value	125.1p	117.9p
Share price (mid market)	115.0p	114.0p
(Discount)/Premium  - Basic4  - Debt adjusted5  - Debt adjusted6	(8.1)% (4.7)% (2.0)%	(3.3)% (0.7)% 2.2%
Gearing  - Net of cash7  - Equity gearing8	18.6% 4.2%	20.5% 4.9%

Sources: F&C Investment Business Limited, Datastream.

1          All total return calculations are based on dividends re-invested

2          Net asset value total return is calculated as the total return attributable to an Ordinary Share

3          Composite index of 80 per cent FTSE All-Share Index and 20 per cent FTSE World (ex UK) Index

4          Net asset value (UK GAAP) with debt at par

5          Net asset value (UK GAAP) adjusted to reflect market value of debt

6          Net asset value (non-UK GAAP, ex-income) adjusted to reflect market value of debt

7          Gearing net of cash: (investments-shareholders' funds)/shareholders' funds

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

Review for the Period

The Company's net asset value total return for the three months ended 31 December 2011 was 7.5%. This compares with a return of 8.2% from the composite benchmark index of 80% FTSE All-Share Index and 20% FTSE World (ex UK) Index.

Stockmarkets recovered during the quarter as politicians took repeated steps to try and stem the Eurozone debt crisis. This was supplemented with concerted liquidity action by central banks to ensure the financial system in Europe remained open. Whilst the outlook remains for subdued global growth in 2012, the rapid deterioration in expectations seen in Q3 of 2011 moderated in Q4. In addition, lead economic indicators in the US improved and monetary policy was eased in China, Brazil and also in the Eurozone.

The Managers remain of the view that a more sustainable solution in the Eurozone will be required for equities to make material headway against the tough economic outlook in the wider European markets, and hence they retained a cautious overall approach.

Top Ten Holdings as at 31/12/11

Company	Country	% of total assets
GlaxoSmithKline	UK		4.6
Vodafone Group	UK		3.8
Royal Dutch Shell	UK		3.4
BP	UK		3.3
British American Tobacco	UK		2.9
Tesco	UK		2.5
HSBC Holdings	UK		2.3
Standard Chartered	UK		2.3
Scottish and Southern Energy	UK		2.0
AstraZeneca	UK		1.7
Total			28.8

Geographical Analysis as at 31/12/11

			%of total assets
UK				65.7
Global High Yield				14.4
Emerging Markets				4.9
Corporate Bonds				11.7
Net Current Assets				3.3
Total				100.0

Dividends

A third interim dividend in respect of the year ended 30 September 2011, of 1.442p per share, was paid on 7 October 2011 and a final dividend of 1.786p per share was paid on 6 January 2012.

Benchmark Index and Portfolio Re-Alignment

As previously announced, with effect from 1 October 2011, the Company's benchmark index changed from a composite of 75% FTSE All-Share Index and 25% FTSE World (ex UK) Index, to 80% FTSE All-Share Index and 20% FTSE World (ex UK) Index and, in October, the Company therefore modestly increased its exposure to UK equities and corporate bonds to around 80% of total assets and reduced its exposure to overseas equities accordingly. The Company also realigned the Global (ex UK) sub-portfolio to generate a higher level of investment income. The Board expects these changes to be beneficial to the level of dividend cover, whilst maintaining a significant international equity exposure.

Subsequent Events

The Board is not aware of any other significant events or transactions which have occurred since 31 December 2011 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:

Phil Doel/Gordon Hay Smith

F&C Investment Business Limited

Tel: [phone]

 

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