Interim Results
British Assets Trust PLC
29 May 2001
Interim Results in respect of the six months ended 31 March 2001
*Net asset value total return for the six month period outperforms the
benchmark index by 2.0 percentage points.
*Best performing investment trust in the Global Growth and Income sector, in
terms of share price total return, for the 3 and 5 year periods to 31 March
2001, with returns of 18.3% and 84.7% respectively.
*Proposals announced by Investors Capital Trust, which will enable the Company
to realise its holding at a small discount to net asset value.
Total Return
The Company's net asset value total return, that is with net dividends
re-invested, was -9.0 per cent. This was comfortably ahead of the -11.0 per
cent total return for the composite benchmark index of 75 per cent FTSE
All-Share Index (-9.4%) and 25 per cent FTSE World (ex UK) Index (-15.5%).
There were no significant changes to the asset allocation during the period.
In terms of share price total return, the Company was the best performing
investment trust in the Global Growth & Income sector, with returns of 18.3%
and 84.7% respectively, over the 3 and 5 year periods to 31 March 2001.
(Source: AITC)
Investors Capital Trust (ICT)
The investment in ICT is the Company's largest holding representing 32.7% of
its total investments as at 31 March 2001. As stated in the annual report for
the year ended 30 September 2000, the Board welcomed the intention of ICT's
board to bring forward proposals for shareholders before 30 September 2001.
These proposals were announced on 25 May 2001 and, subject to shareholder
approval, provide the opportunity for the Company to realise its holding in
ICT at a small discount to net asset value.
The Company has supported these proposals. The immediate benefits to the
Company of the proposals will be an uplift in the net asset value which, as at
31 March 2001, would have been approximately 3%. In future, the investment
performance of the Company's UK portfolio will be determined solely by returns
from direct equity holdings rather than being partly dependent on changes in
the discount to net asset value of the shares of ICT. Rodger McNair, who has
successfully managed ICT, will have responsibility for managing the Company's
direct UK portfolio, providing continuity of investment management.
Earnings and Dividend
The Company successfully continued to manage its revenue account to meet its
dividend objective. Earnings per share for the six months to 31 March 2001
were 2.78p (2000 - 2.76p). The Board has declared a second interim dividend
of 1.304p on the ordinary shares of the Company (2000-1.26125p), and this will
be paid on 6 July 2001 to ordinary shareholders on the register on 8 June
2001.
As stated in the 2000 Annual Report, the first three interim dividends will be
paid at the rate of 1.304p per ordinary share, being 25 per cent of the total
dividend paid in respect of the year ended 30 September 2001. In the absence
of unforeseen circumstances it is intended that the fourth interim dividend
will be paid at a rate consistent with the objective of achieving real growth
in income for ordinary shareholders.
The Company's growth shares convert into ordinary shares on 30 September 2001
and the warrants may be converted into ordinary shares at any time between 1
July 2001 and 30 September 2001. However, as stated in previous Annual
Reports, the ordinary shares arising from the conversion of the growth shares
will not rank for any dividends relating to the year ended 30 September 2001.
The ordinary shares arising from the conversion of the warrants will also not
rank for any dividends relating to the year. It is therefore intended that the
third and fourth interim dividends will be paid as usual, in October and
January, but by reference to a record date in June. Ordinary shareholders on
the register on the record date, and only those shareholders, will be entitled
to receive the third and fourth interim dividends. The first dividend to be
received by shareholders whose shares arise from the conversion of growth
shares or warrants will, therefore, be the first interim dividend for the year
ended 30 September 2002, which is expected to be paid in April 2002.
Buy Back of Company's Own Securities
The Company has continued its policy of buying in ordinary shares, growth
shares and warrants with the effect of enhancing the fully diluted net asset
value. During the period a further 3,046,212 ordinary shares and 6,446,096
growth shares were purchased for cancellation. The purchases made during the
period are estimated to have added more than 0.5p per share to the fully
diluted net asset value of the Company.
Since starting to use the buy back facility in May 1999, the Company has
bought back a total of 5.8 per cent of its ordinary shares and 23.9 per cent
of its growth shares, and since March 1995 it has bought back 90.6 per cent of
its warrants. In total these buy-backs are estimated to have added
approximately 2.5p per share to the fully diluted net asset value of the
Company.
Marketing
During the period the Company's retail initiatives have continued to create
demand directly through its ZeroCharge Individual Savings Accounts (ISAs) and
Investment Plans. Despite the difficult market conditions, it was encouraging
that demand for the Company's ISA in the four months to 30 April 2001 was over
125% higher than for the same period last year. Further information on the
plans can be accessed through the website www.itszerocharge.co.uk.
The Company has continued to support the 'its' campaign of the Association of
Investment Trust Companies ('AITC'), which seeks to increase public awareness
of the significant attractions of investment trusts.
Prospects
Global economic growth is expected to ease to 2.0% in 2001, having grown by
3.9% in 2000, but there are some risks, including the possibility of a hard
landing for the US economy, Japan slipping back into recession and a rise in
the price of oil.
In the UK growth is expected to slow, but the fiscal boost announced in the
Budget is equivalent to 1.1% of GDP and should prevent growth from falling
below 2.0%. Nevertheless, there are risks from the global slowdown.
Elsewhere in Europe growth of around 2.0% seems likely. Despite the
protestations of the European Central Bank, Europe's prospects are not immune
to what is happening in North America. For the USA the managers are looking
for growth to slow to 1.0% in 2001. In Japan the central bank has reinstated
its zero interest rate policy, but this alone will not stimulate a recovery,
and its impact will depend on a weakening yen and the result of the policies
aimed at promoting structural reform.
Although markets are likely to remain volatile in the short term, the managers
believe that the fiscal and monetary measures being taken by the authorities
will be sufficient to ensure that there will be a recovery in equity markets
in the second half of the year. Overall the managers remain confident that
equities will continue to provide investors with attractive returns over the
longer term.
For further information please contact:
John Stubbs: 0207 506 1100/Gordon Humphries : 0131 465 1000
Friends Ivory and Sime plc
Unaudited Statement of Total Return (Incorporating the revenue account)
for the 6 Months ended 31 March 2001
2001 2001 2001
Revenue Capital Total
£'000 £'000 £'000
(Losses)/gains on investments - (73,601) (73,601)
Warrants purchased for cancellation - - -
Exchange differences - 2,742 2,742
Equities Index Unsecured Loan Stock - 1,936 1,936
Income 10,821 - 10,821
Investment management fee:
Basic (435) (653) (1,088)
Performance - (394) (394)
Other expenses (383) - (383)
--------- --------- ---------
Net return before finance costs
& taxation 10,003 (69,970) (59,967)
Finance Costs:
EIULS (209) - (209)
6.625% Bonds 2008 (807) (1,212) (2,019)
Other (86) (128) (214)
--------- --------- ---------
Return on ordinary activities before tax 8,901 (71,310) (62,409)
Tax on ordinary activities (435) 326 (109)
--------- --------- ---------
Return on ordinary activities after tax 8,466 (70,984) (62,518)
Dividends in respect of equity shares (7,884) - (7,884)
--------- --------- ---------
Transfer to/(from) reserves 582 (70,984) (70,402)
--------- --------- ---------
Return per Ordinary Share (p):
Basic 2.78 (20.00) (17.22)
Diluted (FRS 14) 2.76 (19.86) (17.10)
Return per Growth Share (p):
Basic - (20.00) (20.00)
Diluted (FRS 14) - (19.86) (19.86)
Unaudited Statement of Total Return (Incorporating the revenue account)
for the 6 Months ended 31 March 2000
2000 2000 2000
Revenue Capital Total
£'000 £'000 £'000
(Losses)/gains on investments - 69,691 69,691
Warrants purchased for cancellation - (4,251) (4,251)
Exchange differences - (2,376) (2,376)
Equities Index Unsecured Loan Stock - (3,169) (3,169)
Income 11,219 - 11,219
Investment management fee:
Basic (421) (631) (1,052)
Performance - - -
Other expenses (406) - (406)
--------- --------- ---------
Net return before finance costs
& taxation 10,392 59,264 69,656
Finance Costs:
EIULS (345) - (345)
6.625% Bonds 2008 (807) (1,212) (2,019)
Other (13) (18) (31)
--------- --------- ---------
Return on ordinary activities before tax 9,227 58,034 67,261
Tax on ordinary activities (517) 371 (146)
--------- --------- ---------
Return on ordinary activities after tax 8,710 58,405 67,115
Dividends in respect of equity shares (7,766) - (7,766)
--------- --------- ---------
Transfer to/(from) reserves 944 58,405 59,349
--------- --------- ---------
Return per Ordinary Share (p):
Basic 2.76 15.73 18.49
Diluted (FRS 14) 2.73 15.56 18.29
Return per Growth Share (p):
Basic - 15.73 15.73
Diluted (FRS 14) - 15.56 15.56
Statement of Total Return (Incorporating the revenue account)
for the Year ended 30 September 2000
2000 2000 2000
Revenue Capital Total
£'000 £'000 £'000
(Losses)/gains on investments - 96,643 96,643
Warrants purchased for cancellation - (4,251) (4,251)
Exchange differences - (2,407) (2,407)
Equities Index Unsecured Loan Stock - (1,902) (1,902)
Income 23,499 - 23,499
Investment management fee:
Basic (851) (1,276) (2,127)
Performance - (426) (426)
Other expenses (929) - (929)
________ ________ ________
Net return before finance costs
& taxation 21,719 86,381 108,100
Finance Costs:
EIULS (565) - (565)
6.625% Bonds 2008 (1,615) (2,423) (4,038)
Other (82) (123) (205)
________ ________ ________
Return on ordinary activities
before tax 19,457 83,835 103,292
Tax on ordinary activities (1,249) 881 (368)
________ ________ ________
Return on ordinary activities after tax 18,208 84,716 102,924
Dividends in respect of equity shares (16,035) - (16,035)
________ ________ ________
Transfer to/(from) reserves 2,173 84,716 86,889
________ ________ ________
Return per Ordinary Share (p):
Basic 5.85 23.12 28.97
Diluted (FRS 14) 5.78 22.90 28.68
Return per Growth Share (p):
Basic - 23.12 23.12
Diluted (FRS 14) - 22.90 22.90
Unaudited Balance Sheet As At As At As At
31.03.01 30.09.00 31.03.00
£'000 £'000 £'000
Fixed Assets
Investments 664,756 739,558 722,865
Current Assets
Debtors 2,766 3,191 24,017
Cash at bank and on deposit 712 18,971 17,354
--------- --------- ---------
3,478 22,162 41,371
Creditors:
Amounts falling due within one year (10,915) (14,857) (26,806)
---------- ---------- ----------
Net Current Assets (Liabilities)/Assets (7,437) 7,305 14,565
--------- --------- ---------
Total Assets less Current Liabilities 657,319 746,863 737,430
Creditors: amounts falling due after more than one year:
6.625% Bonds 2008 (59,558) (59,527) (59,495)
Equities Index Unsecured Loan Stock 2005 (16,503) (18,503) (34,651)
Yen Loan 2003 (23,822) (26,601) (25,974)
---------- ---------- ----------
(99,883) (104,631) (120,120)
--------- --------- ---------
Total Shareholders' Funds 557,436 642,232 617,310
--------- --------- ---------
Equity Shareholders' Funds 557,436 642,232 617,310
--------- --------- ---------
Net Asset Value per Ordinary and
Growth Share:
Basic 158.9p 178.3p 170.6p
Fully Diluted 157.8p 176.8p 169.2p
Diluted - (FRS 14) 158.0p 177.0p 169.6p
Summarised Unaudited Statement of Cash Flows
Six months to Six months to Year to
31 March 31 March 30 September
2001 2000 2000
£'000 £'000 £'000
Net cash inflow from operating
activities 8,489 9,876 20,662
Servicing of finance (2,359) (2,288) (2,718)
Taxation 10 144 506
Financial investments (1,707) 13,917 28,367
Equity dividends paid (8,243) (8,138) (15,918)
------- ------- --------
Net cash (outflow)/inflow before
financing (3,810) 13,511 30,899
Financing (14,412) (1,443) (17,811)
-------- ------- --------
(Decrease)/increase in cash (18,222) 12,068 13,088
-------- ------- --------
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash (18,222) 12,068 13,088
Yen 4.25 billion loan drawn down - (23,901) (23,901)
Equities Index Unsecured Loan Stock
purchased for cancellation 64 - 14,881
Currency (losses)/gains (37) (305) 293
Decrease/(increase) in Equities Index
Unsecured Loan Stock liability 1,936 (3,169) (1,902)
Decrease/(increase) in yen loan
liability 2,779 (2,072) (2,700)
Increase in 6.625% Bond Liability (31) (31) (63)
------ ------- -------
Movement in net debt (13,511) (17,410) (304)
Net debt at 1 October (85,660) (85,356) (85,356)
-------- -------- --------
Net debt at 31 March/30 September (99,171) (102,766) (85,660)
-------- --------- --------
Reconciliation of net return before finance costs and taxation to net cash
Six months to Six months to Year to
31 March 31 March 30 September
Inflow from operating activities 2001 2000 2000
£'000 £'000 £'000
Net return before finance costs
and taxation 10,003 10,392 21,719
Management fee and other expenses
charged to capital (1,047) (631) (1,702)
Stock dividends - (31) (31)
Tax on investment income (125) (178) (545)
Changes in working capital and other
non-cash items (342) 324 1,221
Net cash inflow from operating ------ ------ ------
activities 8,489 9,876 20,662
------ ------ ------
Notes:
1. The unaudited interim results have been prepared on the basis of the
accounting policies set out in the statutory accounts of the Company for the
year ended 30 September 2000.
2. Basic revenue return per ordinary share is based on a weighted average
number of ordinary shares in issue of 304,361,713 (2000: 315,105,778). Basic
capital return per ordinary and growth share is based on a weighted average
number of 354,871,892 ordinary and growth shares in issue (2000: 371,409,509).
Diluted return per ordinary and growth share has been calculated in
accordance with FRS 14 (earnings per share).
3. Earnings for the first six months should not be taken as a guide to the
results of the full year.
4. The second interim dividend of 1.304p per ordinary share will be paid on
6 July 2001 to shareholders on the register on 8 June 2001.
5. The Company has the following equity or equity related securities in
issue as at 31 March 2001:
303,975,000 Ordinary Shares
46,770,630 Growth Shares
7,188,143 Warrants to subscribe for Ordinary Shares at 101 pence
during the period commencing 1 July 2001 and ending on
30 September 2001.
Growth Shares rank pari passu with the Ordinary Shares, except that they are
not entitled to receive any dividends. Growth Shares automatically convert
back to Ordinary Shares on 30 September 2001. Net Asset Value per Share is
based on 350,745,630 Shares in issue (2000 - 361,932,938), being the total
number of Ordinary Shares and Growth Shares in issue. Fully diluted net asset
value assumes the exercise of the warrants outstanding.
The diluted net asset values are calculated in accordance with FRS 14.
6. During the six months ended 31 March 2001, the Company bought in for
cancellation 3,046,212 ordinary shares for a total consideration of
£4,733,000: 6,446,096 growth shares for a total consideration of £9,662,000
and 21,200 units of Equities Index Unsecured Loan Stock for a total
consideration of £64,000 .
7. The Company's geographic exposure as a percentage of shareholders' funds
at 31 March 2001 was as follows (comparative figures are for 30 September
2000).
31 March 30 September
2001 2000
UK (less Equities Index Unsecured Loan Stock) 83.6 79.3
North America 13.1 12.7
Europe 9.9 10.1
Japan 2.9 3.3
Pacific (ex Japan) 1.7 1.7
Fixed Interest/ Liquidity (11.2) (7.1)
____ ____
100.0 100.0
8. These are not full statutory accounts in terms of Section 240 of the
Companies Act 1985. The full audited accounts for the year to 30 September
2000, which were unqualified, have been lodged with the Registrar of
Companies. A full interim report will be sent to shareholders in June 2001.
The interim report will be available for inspection at One Charlotte Square,
Edinburgh, the registered office of the Company.
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