Preliminary results - Replace
Hansa Trust PLC
11 June 2004
The headline for RNS No 6785Z released on 11 June 2004 at 11:44 should read
'Preliminary Results' and not as originally shown.
The announcement text is unchanged and is reproduced in full below.
HANSA TRUST PLC
Preliminary Announcement of Results
for the year ended 31 March 2004
Hansa Trust PLC announces its Preliminary Results for the year ended 31 March
2004
Financial Highlights Year ended Year ended
31 March 2004 31 March 2003
(unaudited) (audited)
Net Asset Value - Total Return 60.0% (25.8 %)
Capital return /(deficit) per equity share 156.2p (101.1p)
Revenue return per equity share 6.2p 4.0p
Net asset value per equity share 426.8p 270.4p
Total dividend per equity share for the year 6.0p 4.0p
Total income (£000's) 2,751 2,366
Revenue before taxation (£000's) 1,489 963
• Final dividend 4.2p per share
• NAV - Total Return was 60.0% compared with 6.9% in the Company's
Performance Benchmark.
• Jamie Borwick will be step down as Chairman on 29 July 2004, to be succeed
by Alex Hammond-Chambers
The following are attached:
• Chairman's Statement
• Consolidated Statement of Total Return
• Balance Sheet for the Group and Company
• Consolidated Cash Flow Statement
• Reconciliation of Operating Results to Net Cash Flow from operating
Activities
• Reconciliation of Net Cash Flow Movement to Movement in (Debt)/Net Funds
• Notes
For further information please contact:
Peter Gardner Hansa Capital Limited 020 7647 5750
David Haggie Haggie Financial Limited 020 7417 8989
CHAIRMAN'S STATEMENT
PERFORMANCE
I am pleased to report that Total Return on the Net Asset Value per Ordinary and
'A' Ordinary shares for the year was 60.0% against the performance benchmark of
6.9%. The Ordinary and 'A' Ordinary share prices rose by 62.8% and 58.9%
respectively. We have also seen the discount narrow marginally from an average
of 20% to 18.4%. The performance in both the Net Asset Value and the share price
is most encouraging and is a welcome reversal of fortunes from those depressing
days a year ago when the markets were grappling with prospects of a long war in
Iraq and the worldwide threat from the SARS virus.
Total Returns for the medium and long term are as follows:
Period ending Net Asset Performance Ordinary 'A' Ordinary FTSE All
31 March 2004 Value Benchmark Shares Share Shares
Index
1 Year 60.0% 6.9% 65.1% 61.2% 31.5%
3 Year 7.5% 21.7% (25.1%) (7.0%) (9.8%)
5 Year 61.7% 37.8% 67.2% 91.9% (11.0%)
10 Year 173.5% 85.7% 149.8% 162.8% 67.5%
Although our primary objective is to maximise the total return to shareholders
through dividends and increasing the underlying Net Asset Value of the Trust the
Board is mindful of the discount as well as the growth of the Net Asset Value.
The factors explaining both the discount and its movement are numerous and not
easy to disentangle; nevertheless the Board regularly reviews the actions that
may reduce it.
One option available to the Board may be to buy back 'A' Ordinary shares for
cancellation and it will consider doing so if an appropriate opportunity
presents itself. The power to buy back 'A' Ordinary shares lapses at the AGM and
a renewal of the authority will be proposed at that meeting.
In addition, a recent change in The Listing Rules enables the Board, subject to
shareholders approval, to purchase shares for treasury. This means that the
Company could purchase shares in the market up to a limit of 10% of the issued
share capital of any one class of share and then at a later stage re-sell the
same shares back into the market. The Board is not yet convinced that this
option will bring lasting benefits to shareholders but will continue to monitor
the position and seek shareholder approval if circumstances change.
This has been the first year in which we have been operating with the new
performance benchmark. Whilst the reported total returns for this year far
exceed the benchmark, it should be recognised that this is not an easy benchmark
to beat over the medium to long term. This is illustrated by the table above,
which demonstrates the unrelenting power of a compounding benchmark which is
market neutral.
It has also been the year in which Hansa Capital Limited took over the
investment process in its entirety replacing Artemis Investment Management
Limited from 1 December 2003.
REVENUE AND DIVIDENDS
I am delighted to announce that the Company's trading subsidiary had an
excellent year, reporting profits of £326,000 contributing to the Group
increasing its Profit before taxation from £963,000 to £1,489,000 for the year.
The Company distributes the majority of its income. The Board are therefore
recommending a final dividend of 4.2p (2003: 2.2p) per Ordinary and 'A' Ordinary
share. The dividend will bring the total dividend for the year to 6p (2002: 4p)
per share. The dividend will be payable on 6 August 2004, subject to
shareholder's approval at the AGM, to shareholders on the register at 25 June
2004.
At the expense of repeating myself each year, the Company's focus is on total
return and the balance between income and capital returns will vary depending on
market conditions and the types of investments made; therefore it is highly
unlikely that the level of dividend will remain constant from year to year,
although over the long term we would expect it to grow.
INVESTMENTS
The Company has a £10 million short-term banking facility which is managed on a
daily basis to maximise the returns. At 31 March 2004, £1.64 million of the
borrowing facility was being utilised.
Strategic
Last year I mentioned the disposal of Adam and Harvey Group PLC, which was
completed during this financial year. This year I would like to inform you of
the disposal of our holding in Finsbury Growth Trust PLC, which was completed in
the first week of April 2004. That leaves Ocean Wilsons Holdings Limited as the
remaining asset in this class. The shares in Ocean Wilsons have performed very
well during the year, increasing in value by some 177%
Portfolio
The portfolio of investments, giving a breakdown of the investments by size and
market, is detailed on page 9. Further details on the portfolio and its
performance are covered in the Report of Portfolio Investments.
THE BOARD
I have been your Chairman for over 12 years and now believe that it is time to
hand over the reins. I hope to continue to serve as a Director but will resign
as Chairman at a Board meeting on 29 July 2004, at which time Alex
Hammond-Chambers will become your new Chairman. I am sure that you will be in
good hands with Alex.
Following the recent introduction of changes to the Combined Code - Corporate
Governance the Board has decided that in the interests of shareholder democracy
all of the members of the Board will resign annually at the Company's AGM and
offer themselves for re-election.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held on 29 July 2004 in the
Curzon Suite, at the Radisson Edwardian Mayfair Hotel, Stratton Street, London,
W1A 2AN. I do hope that as many shareholders as are able will attend and meet
your Board of Directors. In addition William Salomon, who is the Chairman of the
Investment Manager, together with John Alexander, who has recently joined the
Investment Manager will make a short presentation and be available to answer
questions.
OUTLOOK
Last year I commented on the fact that markets had fallen for the preceding
three years, and although this year has seen some substantial reversal of these
losses, the UK market is still more than 30% below its 2000 level.
The future of world markets still relies heavily on continuing US spending and
low cost Chinese production, both of which may falter. It would therefore be
wise to expect some volatility in the world markets as the Iraqi post war
situation unfolds and the US presidential election draws nearer.
In the UK the outlook is clouded by the Chancellor's instructions to the Bank of
England to target a new price index, the CPI, rather than the RPI with which we
have for many years been familiar. This change, by both novelty and by excluding
all housing costs, will greatly complicate economic management. Its novelty
means that policy makers will be less experienced in controlling it, while its
exclusion of housing costs (including taxes on housing) makes it rather
different from the inflation most people experience and will therefore tend to
undermine confidence in policy.
Nevertheless we remain confident that our new investment strategy appropriate to
our new performance benchmark will deliver high quality earnings over the years
to come, as we seek out investment opportunities. What perhaps is a little more
difficult in this uncertain investment world is predicting the timing of when
these opportunities will bear fruit.
Jamie Borwick
Chairman
28 June 2004
HANSA TRUST PLC
CONSOLIDATED STATEMENT OF TOTAL RETURNS
Incorporating the revenue account for the year ended 31 March
(unaudited) (unaudited) (unaudited) (audited) (audited) (audited)
Revenue Capital Total Revenue Capital Total
2004 2004 2004 2003 2003 2003
£000 £000 £000 £000 £000 £000
Profit/(losses) on investments - 37,493 37,493 - (24,256) (24,256)
Exchange losses on currency
balances - (6) (6) - - -
Income 2,751 - 2,751 2,366 - 2,366
Investment management fees (573) - (573) (547) - (547)
Other expenses (520) - (520) (459) - (459)
Net return/(loss) before
finance costs and taxation 1,658 37,487 39,145 1,360 (24,256) (22,896)
Interest payable and similar
charges (169) - (169) (397) - (397)
Return/(loss) on ordinary
activities before taxation 1,489 37,487 38,976 963 (24,256) (23,293)
Taxation charge on ordinary
activities - - - - - -
Return/(loss) on ordinary
activities after taxation 1,489 37,487 38,976 963 (24,256) (23,293)
Dividend on Ordinary and 'A'
Ordinary shares (equity) (1,440) - (1,440) (960) - (960)
Transfer to/(from) reserves 49 37,487 37,536 3 (24,256) (24,253)
Return/(deficit) per Ordinary
share
6.2p 156.2p 162.4p 4.0p (101.1p) (97.1p)
The revenue column of this statement is the profit and loss account for the Group.
All revenue and capital items in the above statement derive from continuing operations.HANSA TRUST PLC
BALANCE SHEET OF THE GROUP AND COMPANY
at 31 March
(unaudited) (audited) (unaudited) (audited)
Group Group Company Company
2004 2003 2004 2003
£000 £000 £000 £000
Fixed assets - investments
Group undertakings - - 376 50
Other investments 105,551 72,466 105,551 72,466
105,551 72,466 105,927 72,516
Current assets
Debtors 212 92 212 197
Investments 123 126 - -
Cash at bank 57 51 52 21
392 269 264 218
Creditors
Amounts falling due within one year (3,503) (7,831) (3,751) (7,830)
Net current liabilities (3,111) (7,562) (3,487) (7,612)
Net Assets 102,440 64,904 102,440 64,904
Capital and reserves
Called up share capital 1,200 1,200 1,200 1,200
Capital reserve - realised 77,342 77,725 77,342 77,725
Capital reserve - unrealised 22,063 (15,807) 22,436 (15,760)
Revenue reserve 1,835 1,786 1,462 1,739
Total equity shareholders' funds 102,440 64,904 102,440 64,904
Net asset value per Ordinary share 426.8p 270.4p 426.8p 270.4p
HANSA TRUST PLC
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March
(Unaudited) (Audited)
2004 2003
£000 £000
Net cash inflow from operating activities 1,631 1,347
Servicing of finance
Interest paid (171) (395)
Net cash outflow from servicing finance (171) (395)
Taxation
Taxation recovered - 23
Financial investment
Purchase of investments (31,079) (42,771)
Sales of investments 36,121 35,394
Net cash inflow/(outflow) from financial investment 5,042 (7,377)
Equity dividends paid (960) (1,200)
(960) (1,200)
Financing
(Repayment)/drawdown of loans (5,530) 7,165
Increase/(decrease) in cash 12 (437)
HANSA TRUST PLC
RECONCILIATION OF OPERATING RESULTS TO NET CASH FLOW FROM OPERATING ACTIVITIES
(unaudited) (audited)
2004 2003
£000 £000
Net revenue return before finance costs and taxation 1,658 1,360
(Increase)/decrease in prepayments and accrued income (120) 116
Decrease)/(increase) in current asset investments 3 (83)
Increase/(decrease) in other creditors and accruals 90 (46)
Net cash inflow from operating activities 1,631 1,347
RECONCILIATION OF NET CASH FLOW MOVEMENT TO MOVEMENT IN NET (DEBT)/FUNDS
(unaudited) (audited)
2004 2003
£000 £000
Movement in net funds resulting from cashflows 5,542 (7,602)
Exchange losses (6) -
Movement in net funds in the year 5,536 (7,602)
Net (debt)/funds at the start of year (7,114) 488
Net debt at end of year (1,578) (7,114)
Represented by:
(audited) (unaudited) (unaudited) (unaudited)
At 31 March Exchange At 31 March
2003 Cashflows Movements 2004
£000 £000 £000 £000
Cash at bank 51 12 (6) 57
Short-term bank loans (7,165) 5,530 - (1,635)
Net debt (7,114) 5,542 (6) (1,578)
Notes:
1. This Preliminary Announcement is not the Company's statutory accounts.
It has been agreed by the auditors and is an abridged version of the Company's
full draft accounts, which have not yet been approved, audited or filed with the
Registrar of Companies.
2. Statutory accounts for the 12 months ended 31 March 2003 have been
delivered to the Registrar of Companies and received an audit report which was
unqualified and did not contain statements under Section 237 (2) and (3) of the
Companies Act 1985.
Hansa Capital Limited - Company Secretary
10 June 2004
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