Interim Results - 6 Months to 30 September 1999
Finsbury Worldwide Pharm Tst PLC
3 December 1999
FINSBURY WORLDWIDE PHARMACEUTICAL TRUST PLC
PRELIMINARY RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999
Finsbury Worldwide Pharmaceutical Trust PLC, which invests worldwide in
pharmaceutical companies with the objective of achieving a high level of capital
growth, announces preliminary results for the six months ended 30 September
1999.
1999 1998
Return per share: Capital 14.1p (18.0p)
Revenue 0.4p 0.4p
Total 14.5p (17.6p)
Net asset value per ordinary
share 234.8p 171.3p
Datastream World Pharmaceutical
Total Return Index
(sterling adjusted) 6,153 5,380
For and on behalf of Rea Brothers Limited - Secretary
3 December 1999
Notes to editors
The following are below:
Chairman's Statement
Consolidated Statement of Total Return
Balance Sheets of the Group and Company
For further information please contact:
Mark Mathias, Finsbury Asset Management 0171 426 6240
Neil Mainland, Mainland Public Relations 0171 439 4359
FINSBURY WORLDWIDE PHARMACEUTICAL TRUST PLC
Chairman's Statement for the six months ended 30 September 1999
Performance
The Company made further gains in the six months to 30 September 1999, building
on the unbroken series of annual increases since the Company was launched in
April 1995. Net asset value per share grew by 14.1p to 234.8p. This increase
of 6.4% compares with a fall of 7.7% in the Datastream World Pharmaceutical
Total Return Index against which our performance is measured. The
out-performance came mainly from the Company's investments in Japanese companies
and in the smaller specialised biotechnology companies.
The Company's stock selections in Japan which account for 30% of the portfolio
have performed well. In four out of five of our major company holdings, new
products of worldwide dimension should contribute to continued stock price
advances. Eisai sells Aricept for Alzheimer's Disease; Fujisawa sells Prograf
to prevent organ transplant rejection; Takeda sells Prevacid for ulcer
treatment and Lupron for prostrate cancer and Shionigi is about to commence
sales of Visastatin (in the hands of AstraZeneca) to reduce cholesterol.
The Board believes that the ability to invest up to 40% of the Company's assets
in smaller specialty biotechnology companies will add significantly to
shareholder value over the long term. An example of the potential available
from such companies is Abgenix, a major participant in novel monoclonal
antibodies. We invested £720,000 in this company as an unlisted private equity
in December 1997. The stock was successful in its initial public offering in
the United States earlier this year and the investment is now valued at $4.2
million. These smaller companies, defined as having a market capitalisation of
less that $3 billion, currently constitute 29% of the portfolio.
Asset growth has continued since the end of September and, at the end of October
1999, the net asset value was 246.24 per share.
Outlook
Although some volatility is to be expected in the smaller biotechnology stocks,
the number of profitable biotechnology companies is expected to increase by at
least 50% in year 2000 compared with 1999, broadly repeating the increase shown
in the current year. With respect to the major pharmaceutical companies such as
Warner-Lambert, Roche and Monsanto, we anticipate further merger and acquisition
activity next year.
The Board continues to view pharmaceuticals as an attractive sector for
investment. Given the current low interest rates, we believe it would be
advantageous to shareholders to borrow funds to gear the portfolio. We have
therefore arranged a flexible borrowing facility to permit an additional £20
million to be invested in those stocks which the investment manager believes
will deliver strong returns to shareholders over the life of the loan.
The Company's share price continues to trade at a significant discount to the
net asset value. The Board has given further consideration to the possibility
of the Company buying back its own shares for cancellation. Shareholder
authority for this was received in August. We have reserved a portion of the
bank borrowing available under the new facility which may be used to purchase
the Company's shares when the Board believes the share price justifies it.
The aim of both these actions is to raise the net asset value per share beyond
the growth normally resulting from the management of the portfolio. These,
together with the increase in targeted marketing effort planned in the balance
of the year, should help reduce the share price discount to net asset value to a
more acceptable level.
Dividend
The revenue income generated by the Company's portfolio tends to be modest. The
Directors are therefore not declaring an interim dividend and do not expect to
do so at any future interim point. Indeed, expenditure on the increased
marketing effort referred to above will make any future dividends less likely.
Management
Shareholders may be aware that, in August, Close Brothers Group plc completed
its takeover of Rea Brothers Group plc, the parent company of our investment
manager. The Board has met representatives of Close Brothers and has received
assurances that it is fully supportive of both the Company's management and the
Finsbury name under which we conduct our marketing.
Sir Stuart Burgess
December 1999
FINSBURY WORLDWIDE PHARMACEUTICAL TRUST
Statement of Total Return
(Incorporating the revenue account
for the six months ended 30th September 1999 - Unaudited)
6 months to 30th Sept 1999 6 months to 30th Sept 1998
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 6,149 6,149 - (6,770) (6,770)
Investment income 386 - 386 378 - 378
Interest received 25 - 25 13 - 13
Investment management
fee - (472) (472) - (408) (408)
Other expenses (194) - (194) (106) (53) (159)
Net return before
Finance costs and tax 217 5,677 5,894 285 (7,231) (6,946)
Interest payable - (24) (24) (41) - (41)
Return on ordinary
activities before
taxation 217 5,653 5,870 244 (7,231) (6,987)
Tax on ordinary
activities (57) - (57) (85) - (85)
Return on ordinary
activities after tax 160 5,653 5,813 159 (7,231) (7,072)
Dividends in respect
of equity shares - - - - - -
Retained revenue
surplus 160 5,653 5,813 159 (7,231) (7,072)
Return per ordinary
share 0.4p 14.1p 14.5p 0.4p (18.0p) (17.6p)
FINSBURY WORLDWIDE PHARMACEUTICAL TRUST
Balance Sheet
30 Sept 1999 30 Sept 1998 31 March 1999
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Investments at market value 97,886 68,619 88,364
Net current (liabilities)
/assets (3,478) 282 231
94,408 68,901 88,595
Share capital 10,035 10,035 10,035
Share premium 43,143 43,143 43,143
Other reserves 41,054 15,550 35,401
Revenue reserves 176 173 16
94,408 68,901 88,595
Net asset value per ordinary
share 235.2p 171.7p 220.7p
Net asset value per ordinary
share(excluding current
year's revenue) 234.8p 171.3p 220.7p
Notes
These accounts are not statutory accounts. Statutory accounts for the 12 months
ended 31 March 1999 have been delivered to the Registrar of Companies and
received an audit report which was unqualified and did not contain statements
under Section 237 (ii) and (iii) of the Companies Act 1985.
Rea Brothers Limited - Secretary
3 December 1999