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Dexion Absolute Ltd (DAB)

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Monday 13 September, 2004

Dexion Absolute Ltd

Interim Results

Dexion Absolute Limited
13 September 2004

Dexion Absolute Limited - Interim results

Dexion Absolute Limited

13 September 2004

Preliminary announcement of the unaudited interim results for the period ended
30 June 2004.

Statement of Total Return (unaudited)

Period Ended 30 June 2004

                           Note        30 June     30 June    31 December 2003 
                                          2004        2003                     
                                             £           £                   £

  Gains on investments       4       4,758,146   3,209,411           5,589,172

                                     4,758,146   3,209,411           5,589,172

  Income                     5           8,454      26,695             403,904

  Management fee             3       (794,568)   (273,085)           (730,236)

  Performance fee            3       (368,155)   (278,142)           (467,238)

  Expenses                   6       (290,483)   (181,604)           (394,982)

  Net loss on ordinary             (1,444,752)   (706,136)         (1,188,552)

  Total return for the               3,313,394   2,503,275           4,400,620

  Net increase in                    3,313,394   2,503,275           4,400,620
  shareholders' funds                                                         
  from operating                                                              

  Return per ordinary        9           4.06p       7.36p              12.37p

  Return per C share         9               -           -               0.31p

The Company has no other gains or losses other than the loss for the
financial period.
All items derive from continuing activities.

  Balance Sheet (unaudited)                                                   
  at 30 June 2004                                                             
                                       Note        30 June    31 December 2003 
                                                         £                   £

  Investments                           10     109,746,902          94,877,947

  Current assets                                                              

  Cash at bank                          11       1,262,248           3,506,090

  Net forward currency deals                             -           2,994,218
  awaiting settlement                                                         

  Prepayments                                       26,747                   -

                                                 1,288,995           6,500,308

  Liabilities due within one year                                             

  Net forward currency deals            11     (1,253,013)                   -
  awaiting settlement                                                         

  Creditors                             12       (586,443)           (692,635)

                                               (1,839,456)           (692,635)

  Net current assets                             (550,461)           5,807,673

  Net assets                                   109,196,441         100,685,620

  Represented by:                                                             

  Capital and reserves                                                        

  Called up share capital               14         956,240           6,740,000

  Special reserves                      15     100,526,187          89,545,000

  Reserves                              15       7,714,014           4,400,620

                                               108,240,201          93,945,620

  Total shareholders' funds                    109,196,441         100,685,620

  Net assets per ordinary share         13         114.19p             110.62p

  Net assets per C share                13               -              98.56p

The financial statements were approved by the Board of Directors on 13
September 2004.
Reconciliation of Movements in Shareholders' Funds (unaudited)
For the period ended 30 June 2004 

                                                30 June    31 December 2003 
                                                      £                   £

    Opening shareholders' funds             100,685,620                   -

    Net proceeds from placings                5,197,427          96,285,000

    Total recognised gain for the period      3,313,394           4,400,620

    Closing shareholders' funds             109,196,441         100,685,620

Cashflow Statement (unaudited)

For the period ended 30 June 2004 

                                    30 June        30 June     31 December 2003 
                                       2004           2003                     
                                          £              £                   £
  Operating Activities                                                        

  Net loss for the              (1,444,752)      (706,136)         (1,188,552)
  financial period                                                            

  (Decrease)/increase in          (106,192)        368,865             692,634

  Increase in prepayments          (26,747)       (19,092)                   -

  Net cash outflow from         (1,577,691)      (356,363)           (495,918)
  operating activities                                                        

  Financial Investment                                                        

  Cost of investments          (15,151,004)   (32,856,657)        (96,402,561)

  Sale of investments and         2,496,772        644,969           2,602,190
  pending investments*                                                        

  Realised gain from              6,204,148      1,614,596           3,001,982
  forward foreign currency                                                    

  Net cash outflow from         (6,450,084)   (30,597,092)        (90,798,389)
  financial investment                                                        


  Issue of shares                 5,290,002     34,000,000          98,000,000

  Costs related to issue of        (92,575)      (595,000)         (1,715,000)

  Net cash inflow from            5,197,427     33,405,000          96,285,000

  (Decrease)/increase in        (2,830,348)      2,451,545           4,990,693

  * Pending investments are commitments to purchase/(sell) investments which  
  settled post period-end.                                                    

  Reconciliation of net cash flow to                                          
  movement in net funds                                                       

  (Decrease)/increase in        (2,830,348)      2,451,545           4,990,693
  cash as above                                                               

  Net realised currency             586,506      (154,867)         (1,484,603)
  gains/(losses) &                                                            
  unrealised gains/(losses)                                                   
  on currency translation                                                     

  Net movement in the period    (2,243,842)      2,296,678           3,506,090

  Cash at beginning of the        3,506,090              -                   -

  Cash at end of the period       1,262,248      2,296,678           3,506,090

Chairman's Interim Statement

In presenting this interim update I would like firstly to thank all shareholders
for their continued support. It has been another very satisfactory period in the
development of the Company.

In February 2004, the Company raised net proceeds of £5.2 million through an
issue of 4.6 million ordinary shares at a premium to prevailing net asset value
of 2.5%. This was followed in June 2004 by the Company's announcement of
proposals for a further issue of C shares in response to continued investor
demand for the Company's ordinary shares in the secondary market.

The C share issue was completed successfully on 1 July 2004, raising net
proceeds of £130.2 million. The issue attracted a broad range of UK investors
including insurance companies, pension funds, private wealth managers and
discretionary asset managers. Approximately 62% of issue proceeds were raised
from new investors, significantly broadening the Company's shareholder base.

As at 30 June 2004, the net assets of the Company (excluding the proceeds of the
C share issue referred to above) were approximately £109.2 million, invested in
a diversified portfolio of 48 hedge funds across 7 hedge fund strategies.


At this interim stage, I am pleased to be able to report that the Company's net
asset value has risen by 3.24% over the period under review, notwithstanding the
difficult market conditions for hedge funds during the second quarter referred
to below. Over the same period, traditional UK equity market and fixed interest
benchmarks, as measured by the FTSE All Share Index (total return) and the FTSE
Government Securities All Stocks Index (total return), rose 2.97% and 0.57%
respectively (in Sterling terms) whilst the HFRI Fund of Funds Index (a US
dollar based index representing the performance of funds investing with multiple
hedge fund managers) returned 1.62% (in US dollar terms). The Company's positive
net asset appreciation continues to be achieved with substantially lower
volatility than traditional equity benchmarks.

The Company continued to benefit from its stated policy of hedging all currency
exposure back to Sterling through the use of rolling monthly forward foreign
exchange contracts. This policy, which is an integral aspect of the Company's
investment strategy, eliminated volatility that would otherwise have occurred as
a result of fluctuations in the Sterling/US dollar exchange rate over the

Aided by positive asset performance and ongoing secondary market demand, the
Company's ordinary shares traded at an average premium to net asset value of
5.2% over the reporting period.

Investment Review

Six out of the seven hedge fund strategies in which the Company invests were
profitable at the half year stage with much of the gains being achieved in the
first quarter of the year. The largest contribution to returns came from the
Company's distressed securities managers. In the second quarter concerns over
the health of the global economy and the likely pace of US interest rate
increases, coupled with the rise in oil prices and resulting outlook for
inflation, resulted in markets in most asset classes lacking conviction, trading
within narrow ranges and with much reduced volatility. These circumstances were
particularly challenging for a number of the Company's underlying hedge fund

Investment Outlook

The Company's portfolio is conservatively positioned with many managers having
reduced their exposures in response to the lack of volatility and direction in
global markets and concerns over the possibility of terrorist attacks in the
build up to the US elections. Nevertheless the outlook for a number of the
strategies remains favourable and the Company is well positioned for a return to
normalised trading conditions.

Post Balance Sheet Events

On 5 July 2004 the Company announced that in excess of 91% of gross issue
proceeds raised through the issue of C shares had been successfully invested in
accordance with the Company's investment policy. Accordingly, the C shares
converted into new ordinary shares on 11 August 2004.

With aggregate net assets on 1 July 2004 of approximately £239 million, I am
pleased to note that Dexion Absolute is now the largest London-listed fund of
hedge funds.

Peter P Walsh


September 2004

                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                     

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