Interim Results

British Empire Sec & Gen Tst PLC 18 May 2001 UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2001 * British Empire's net asset value per share rose 2.9% compared to a fall of 15.4% in the MSCI World Index (£) during the 6 month period to 31st March 2001 * The Board has declared an increased interim dividend of 0.4p per share which compares with 0.3p per share last year reflecting exceptional earnings in the past six months * Since the major Rights Issue in 1985 net asset value per share has risen by 628% compared to a rise in the MSCI World Index of 354% * The Company came first among AITC conventional Global Growth investment trusts over the past 16 years, having achieved an NAV total return of £908 on £100 invested compared with the average return of £677 * Substantial profits were taken in the European Investment holding company sector, mainly within the Lazard and Agnelli groups * Such profit taking involving net disposals of £100 million further increased our liquidity which was 50% at the period end. Since then a net £20 million has been re-invested at the lower levels * Markets have rallied on successive interest rate reductions. But the positive impact of Fed easing may be diminished by a coincident rise in bond yields, and the problem of over-investment and booming consumption (contributing to a private sector deficit of 7% of GDP) may not necessarily respond quickly to orthodox remedies * Such rebalancing within the world's largest economy will have a neutralising impact on the worrying US trade deficit but a significant dampening impact on the world economy * The economic backdrop implies that many of the positive drivers of the 18 year bull market are no longer in place. US after tax profits have been in a downtrend as a percentage of GDP for two years, a trend that seems likely to persist. Much of recent buyback activity now looks ill-judged * The Company recently won two awards: 1st place - Standard & Poors UK Investment Trust Global Growth Sector over one year 1st place - Money Observer Best Global Trust * W.G. Fossick, Chairman said, 'British Empire's performance benefited from good stock selection and high levels of liquidity. Substantial profits, taken at a time of exceptionally high p/e's and almost invisible dividend yields, have built up liquidity which gives flexibility at a time of uncertain trends in corporate cash flows. We expect to have good opportunities to re-invest this cash in the more difficult conditions we see ahead'. * J.C. Walton, Investment Manager said, 'Although markets are rallying after the bruising fall, we believe the forthcoming period in markets could be tough and priority should be given to capital preservation. But any absolute gains at a time of such uncertainty will be welcome, and any relative underperformance is a small price to pay for the excellent opportunities that our cash will give us if conditions become ugly'. For further information, please contact: John Walton, Managing Director, Ivory and Sime Asset Management Tel: 0207 853 6900 The Group's Statement of Total Return, Balance Sheet and Cash Flow Statement (unaudited) follow: BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Statement of Total Return (incorporating the revenue account) For the six months to 31 March 2001 for the six months to 31 March 2001 Revenue Capital Total £'000 £'000 £'000 Gains on investments - 6,734 6,734 Realised exchange differences - 189 189 Depreciation/(appreciation) of loan stock - 1,314 1,314 Income 5,672 358 6,030 Investment management fee (including VAT) (917) (229) (1,146) Other expenses net of VAT recovered (104) - (104) Net return before finance costs and tax 4,651 8,366 13,017 Finance costs (1,304) (3) (1,307) Return on ordinary activities before tax 3,347 8,363 11,710 Tax on ordinary activities (822) 69 (753) Return attributable to equity shareholders 2,525 8,432 10,957 Dividends in respect of equity shares (705) - (705) Transfer to reserves 1,820 8,432 10,252 Return per ordinary share: Basic 1.43p 4.78p 6.21p BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Statement of Total Return (incorporating the revenue account) For the six months to 31 March 2001 for the six months to 31 March 2000 Revenue Capital Total £'000 £'000 £'000 Gains on investments - 63,909 63,909 Realised exchange differences - 124 124 Depreciation/(appreciation) of loan stock - (1,225) (1,225) Income 4,558 531 5,089 Investment management fee (including VAT) (774) (193) (967) Other expenses net of VAT recovered (287) - (287) Net return before finance costs and tax 3,497 63,146 66,643 Finance costs (1,349) (3) (1,352) Return on ordinary activities before tax 2,148 63,143 65,291 Tax on ordinary activities (301) (185) (486) Return attributable to equity shareholders 1,847 62,958 64,805 Dividends in respect of equity shares (517) - (517) Transfer to reserves 1,330 62,958 64,288 Return per ordinary share: Basic 1.02p 34.77p 35.79p BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Statement of Total Return (incorporating the revenue account) For the six months to 31 March 2001 for the year to 30 September 2000 Revenue Capital Total £'000 £'000 £'000 Gains on investments - 72,733 72,733 Realised exchange differences - 318 318 Depreciation/(appreciation) of loan stock - (883) (883) Income 10,148 1,405 11,553 Investment management fee (including VAT) (1,529) (765) (2,294) Other expenses net of VAT recovered (1,006) - (1,006) Net return before finance costs and tax 7,613 72,808 80,421 Finance costs (2,806) (7) (2,813) Return on ordinary activities before tax 4,807 72,801 77,608 Tax on ordinary activities (925) 33 (892) Return attributable to equity shareholders 3,882 72,834 76,716 Dividends in respect of equity shares (2,280) - (2,280) Transfer to reserves 1,602 72,834 74,436 Return per ordinary share: Basic 2.15p 40.31p 42.46p BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Unaudited Group Balance Sheet As at As at As at 31 March 31 March 30 September 2001 2000 2000 £'000 £'000 £'000 Investments 299,275 356,445 312,823 Freehold investment property 6,500 7,100 6,900 Net current assets 99,344 26,285 76,455 Total assets less current liabilities 405,119 389,830 396,178 Financed by: Equities Index Unsecured Loan Stock 2013 11,202 13,103 12,516 10.375 per cent Debenture Stock 2011 11,883 11,883 11,883 8.125 per cent Debenture Stock 2023 14,839 14,832 14,836 Provision for liabilities and charges 606 565 606 Ordinary shareholders' funds 366,589 349,447 356,337 405,119 389,830 396,178 Net asset value per ordinary share 207.93p 196.00p 202.11p Number of shares in issue 176,305,089 (31 March 2000: 178,285,089, 30 September 2000: 176,305,089) BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Summarised Unaudited Group Statement of Cash Flows Six months Six months Year ended ended ended 31 March 31 March 30 September 2001 2000 2000 £'000 £'000 £'000 Net cash flow from operating activities 1,633 2,595 7,040 Servicing of finance (1,361) (1,294) (2,483) Taxation (52) 185 (368) Capital expenditure and financial investment 20,726 (44,941) 15,243 Equity dividends paid (1,783) (1,628) (2,163) Net cash flow before financing 19,163 (45,083) 17,269 Financing - (13,601) (17,513) Increase/(decrease) in cash 19,163 (58,684) (244) Reconcilication of net cash flow to movement in net debt Increase/(decrease) in cash 19,163 (58,684) (244) Purchase of index loan stock - 355 602 Changes in net debt resulting from cash flows 19,163 (58,329) 358 Exchange differences 189 122 318 Other 1,308 (1,228) (892) Movement in net cash/(debt) 20,660 (59,435) (216) Opening net cash/(debt) 40,361 40,577 40,577 Closing net cash/(debt) 61,021 (18,858) 40,361 Reconciliation of operating profit to net cash flow from operating activities Net return before finance costs and taxation 4,651 3,497 7,613 Management fee charged to capital (229) (193) (765) Changes in working capital and other non-cash items (2,789) (709) 192 Net cash flow from operating activities 1,633 2,595 7,040 BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C. Notes: 1. The unaudited results have been prepared on the basis of the accounting policies set out in the statutory accounts of the Group for the year ended 30 September 2000. 2. The results for the first six months should not be taken as a guide to the full year's results. 3. Income from revenue sources comprises: Six months to Year to 31 March 30 September 2001 2000 2000 £'000 £'000 £'000 Dividends 2,072 2,085 4,999 Interest 3,265 2,115 4,452 Other Income 335 358 697 5,672 4,558 10,148 Capital repayments of £358,000 (31 March 2000: £531,000, 30 September 2000: £1,405,000) paid by investee companies have been credited to capital reserves. 4. At 31 March 2001 the Company had 176,305,089 Ordinary shares and 4,131,530 units of Equities Index Unsecured Loan Stock in issue. 5. The interim dividend will be paid on 12 June 2001 to ordinary shareholders on the Register at 1 June 2001. 6. 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 May 2001 and will be available for inspection at the registered office of the Company, 100 Wood Street, London EC2V 7AN.

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