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Gartmore Balanced (GTB)

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Thursday 06 March, 2003

Gartmore Balanced

Interim Results


STOCK EXCHANGE ANNOUNCEMENT

GARTMORE BALANCED ASSETS TRUST PLC

(FORMERLY GARTMORE SPLIT CAPITAL OPPORTUNITIES TRUST PLC)

RESULTS FOR THE SIX MONTHS TO 31st JANUARY 2003

-----------------------------------------------------------------

The Directors announce the Group's unaudited results for the six months to 31st
January 2003.

GROUP TOTAL RETURN (UNAUDITED)

------------------------------------

                                           SIX MONTHS TO 31 JANUARY 2003    

                                           REVENUE      CAPITAL        TOTAL
                                                                            
                                                                      RETURN
                                                                            
                                             £'000        £'000        £'000
                                                                            
INCOME AND CAPITAL PROFITS/(LOSSES)                                         
                                                                            
Dividends and other income                   1,127            -        1,127
                                                                            
Net loss on investments                          -      (7,577)      (7,577)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE EXPENSES, FINANCE              1,127      (7,577)      (6,450)
                                                                            
COSTS AND TAXATION                                                          
                                                                            
EXPENSES                                                                    
                                                                            
Management fees                               (32)         (48)         (80)
                                                                            
Other expenses                               (194)            -        (194)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE FINANCE COSTS                    901      (7,625)      (6,724)
                                                                            
AND TAXATION                                                                
                                                                            
FINANCE COSTS                                                               
                                                                            
Interest payable                             (178)        (267)        (445)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN BEFORE TAXATION                         723      (7,892)      (7,169)
                                                                            
TAXATION                                         -            -            -
                                                                            
                                            ------       ------       ------
                                                                            
RETURN AFTER TAXATION                          723      (7,892)      (7,169)
                                                                            
NON EQUITY MINORITY INTEREST                     -      (1,807)      (1,807)
                                                                            
                                            ------       ------       ------
                                                                            
RETURN TO EQUITY SHAREHOLDERS                  723      (9,699)      (8,976)
                                                                            
APPROPRIATED TO                                                             
                                                                            
EQUITY SHAREHOLDERS                                                         
                                                                            
Dividends - Ordinary shares                      -            -            -
                                                                            
                                            ------       ------       ------
                                                                            
TRANSFERRED TO/(FROM) RESERVES                 723      (9,699)      (8,976)
                                                                            
                                            ------       ------       ------
                                                                            
TOTAL RETURN PER ORDINARY SHARE               1.6p      (21.1)p      (19.5)p
                                                                            
                                              ====        =====        =====

GROUP TOTAL RETURN COMPARATIVE (AUDITED)

------------------------------------------------

                                           SIX MONTHS TO 31 JANUARY 2002    

                                           REVENUE     RESTATED        TOTAL
                                                                            
                                                        CAPITAL       RETURN
                                                                            
                                             £'000        £'000        £'000
                                                                            
INCOME AND CAPITAL PROFITS/(LOSSES)                                         
                                                                            
Dividends and other income                   3,053           49        3,102
                                                                            
Net loss on investments                          -     (17,277)     (17,277)
                                                                            
                                            ------     --------     --------
                                                                            
RETURN BEFORE EXPENSES,                      3,053     (17,228)     (14,175)
                                                                            
FINANCE COSTS AND TAXATION                                                  
                                                                            
EXPENSES                                                                    
                                                                            
Management fees                               (84)        (127)        (211)
                                                                            
Other expenses                               (131)            -        (131)
                                                                            
                                            ------     --------       ------
                                                                            
RETURN BEFORE FINANCE COSTS                  2,838     (17,355)     (14,517)
                                                                            
AND TAXATION                                                                
                                                                            
FINANCE COSTS                                                               
                                                                            
Interest payable                             (264)        (396)        (660)
                                                                            
                                            ------     --------     --------
                                                                            
RETURN BEFORE TAXATION                       2,574     (17,751)     (15,177)
                                                                            
TAXATION                                     (133)          133            -
                                                                            
                                            ------     --------     --------
                                                                            
RETURN AFTER TAXATION                        2,441     (17,618)     (15,177)
                                                                            
NON EQUITY MINORITY INTEREST                     -      (1,650)      (1,650)
                                                                            
                                            ------     --------     --------
                                                                            
RETURN TO EQUITY SHAREHOLDERS                2,441     (19,268)     (16,827)
                                                                            
APPROPRIATED TO                                                             
                                                                            
EQUITY SHAREHOLDERS                                                         
                                                                            
Dividends - Ordinary shares                (1,376)            -      (1,376)
                                                                            
                                            ------     --------     --------
                                                                            
TRANSFERRED TO/(FROM) RESERVES               1,065     (19,268)     (18,203)
                                                                            
                                            ------     --------     --------
                                                                            
TOTAL RETURN PER ORDINARY SHARE               5.3p      (42.0)p      (36.7)p
                                                                            
                                              ====        =====        =====

The Revenue column shown above represents the Revenue Account of the Group.

Management fees and finance costs of Gartmore Balanced Assets Trust PLC are
allocated 40% to revenue and 60% to capital.

The Group accounts for the six months to 31st January 2002 have been restated
in accordance with FRS4.

Group revenue return per Ordinary share has been calculated on the return to
equity shareholders of £723,000 (2001: £2,441,000) and 45,877,600 (2001:
45,877,600) Ordinary shares in issue throughout the period.

Group capital return per Ordinary Share has been calculated in accordance with
FRS4 on the adverse return for the period of £9,699,000 (2002: adverse return
of £19,268,000).

                                                             2003          2002
                                                                               
                                                            £'000         £'000
                                                                               
Capital return per FRS4 Basis                             (9,699)      (19,268)
                                                                               
Deficiency re unsecured Zero Coupon Loan Note 2004          7,169             -
                                                                               
Deficiency re subscription undertaking                      1,807         1,225
                                                                               
                                                          -------       -------
                                                                               
Capital return per Articles Basis                           (723)      (18,043)
                                                                               
                                                            =====         =====

The Group capital return per Ordinary share calculated in accordance with the
Articles basis is negative 1.6p (2002: negative 39.3p)

GROUP BALANCE SHEET                                             AT           AT
                                                                               
------------------------                                  31-01-03     31-07-02
                                                                               
                                                             £'000        £'000
                                                                               
FIXED ASSETS                                                                   
                                                                               
Listed investments at valuation                             17,210       26,881
                                                                               
CURRENT ASSETS                                                                 
                                                                               
Debtors: Amounts receivable within one year                    265        1,780
                                                                               
Cash at bank                                                 5,639        1,845
                                                                               
                                                           -------      -------
                                                                               
                                                             5,904        3,625
                                                                               
Creditors: Amounts falling due within one year               (215)        (438)
                                                                               
                                                           -------      -------
                                                                               
NET CURRENT ASSETS                                           5,689        3,187
                                                                               
                                                           -------      -------
                                                                               
TOTAL ASSETS LESS CURRENT LIABILITIES                       22,899       30,068
                                                                               
Creditors: Amounts falling due after more than            (13,200)     (13,200)
                                                                               
one year                                                                       
                                                                               
                                                        ----------    ---------
                                                                               
NET ASSETS                                                   9,699       16,868
                                                                               
                                                           =======      =======
                                                                               
CAPITAL AND RESERVES                                                           
                                                                               
Called-up share capital                                        459          459
                                                                               
Special reserve                                             42,509       42,509
                                                                               
Capital reserve - realised                                (38,094)     (20,596)
                                                                               
Capital reserve - unrealised                              (40,498)     (48,297)
                                                                               
Revenue reserve                                              4,536        3,813
                                                                               
                                                         ---------    ---------
                                                                               
EQUITY SHAREHOLDERS' SHORTFALL                            (31,088)     (22,112)
                                                                               
Non equity minority interest entitlement                    40,787       38,980
                                                                               
                                                          --------     --------
                                                                               
CAPITAL EMPLOYED                                             9,699       16,868
                                                                               
                                                            ======       ======
                                                                               
NET ASSET VALUE/(DEFICIT) PER SHARE (AS PER FRS 4):                            
                                                                               
ORDINARY SHARES                                            (67.8)p      (48.2)p
                                                                               
ZERO DIVIDEND PREFERENCE SHARES                             127.6p       121.9p
                                                                               
AVAILABLE ASSETS PER SHARE (AS PER ARTICLES):                                  
                                                                               
ORDINARY SHARES                                                Nil          Nil
                                                                               
ZERO DIVIDEND PREFERENCE SHARES                              30.3p        52.8p
                                                                               

NOTES:

1. The Net Asset Values/(deficit) per share are calculated as per FRS4 as
follows:

(i) Per Ordinary Share - on net liabilities of £31,088,000 (31st July 2002: £
22,112,000) and 45,877,600 (2002: 45,877,600) shares in issue throughout the
period.

(ii) Per GBAT Securities PLC Zero Dividend Preference (ZDP) share - on assets
of £40,787,000 (31st July 2002: £38,980,000) and 31,971,646 (2002: 31,971,646)
shares in issue.

A reconciliation of this basis to the Articles basis is shown below:

                                           2003       2003      2002       2002
                                                                               
                                          £'000      £'000     £'000      £'000
                                                                               
                                       Ordinary        ZDP  Ordinary        ZDP
                                                                               
Assets attributable per FRS4 basis     (31,088)     40,787  (22,112)     38,980
                                                                               
Deficiency re unsecured loan note        22,321   (22,321)    15,152   (15,152)
                                                                               
Deficiency re subscription                8,767    (8,767)     6,960    (6,960)
undertaking                                                                    
                                                                               
                                     ---------- ---------- --------- ----------
                                                                               
Available assets per Articles basis           -      9,699         -     16,868
                                                                               
                                        =======    =======   =======    =======
                                                                               
Available assets per share                  Nil      30.3p       Nil      52.8p

GROUP STATEMENT OF CASH FLOWS                                                 
                                                                              
------------------------------------                                          
                                                                              
                                                       Six months   Six months
                                                               to           to
                                                                              
                                                         31-01-03     31-01-02
                                                                              
                                                            £'000        £'000
                                                                              
OPERATING ACTIVITIES                                                          
                                                                              
Net dividends and interest received                         1,134        3,089
                                                                              
from investments                                                              
                                                                              
Interest received on deposits                                  76           47
                                                                              
Expenses paid allocated to revenue                          (180)        (215)
                                                                              
Expenses paid allocated to capital                          (220)        (126)
                                                                              
                                                          -------      -------
                                                                              
Net cash inflow from operating activities                     810        2,795
                                                                              
                                                          -------      -------
                                                                              
SERVICING OF FINANCE                                                          
                                                                              
Interest paid                                               (501)        (661)
                                                                              
Dividends paid                                                  -      (2,637)
                                                                              
                                                          -------      -------
                                                                              
Net cash outflow from servicing of finance                  (501)      (3,298)
                                                                              
                                                          -------      -------
                                                                              
FINANCIAL INVESTMENT                                                          
                                                                              
Acquisitions of investments                               (2,834)     (11,495)
                                                                              
Disposals of investments                                    6,319        9,994
                                                                              
                                                          -------      -------
                                                                              
Net cash inflow/(outflow) from financial investment         3,485      (1,501)
                                                                              
                                                          -------      -------
                                                                              
NET CASH INFLOW/(OUTFLOW)                                   3,794      (2,004)
                                                                              
                                                          -------      -------
                                                                              

Chairman's Statement

For the six months to 31st January 2003

Performance

Against a background of further sustained weakness in the UK equity market and
acute difficulties in the split capital investment trust sector, I regret the
period under review has been extremely disappointing for the Company. In the
six months to 31st January 2003, the total return on the Company's assets was
-22.4%. The Company's income share portfolio, comprising 21% of total assets as
at 31st January 2003, fell by 40.5%. During this period, the value of the
Company's equity portfolio, which comprised 56% of total assets as at 31st
January 2003, fell by 14.5%, which compares to a fall of 14.9% in the FTSE
All-Share Index. Following the approval of a modified investment policy by
shareholders at extraordinary general meetings held on 9th September 2002, the
Company has continued to look for opportunities to dispose of the remaining
income share holdings at acceptable realisable values, with the aim of
reinvesting the proceeds in more marketable assets. Liquidity and sentiment in
the split capital investment trust market have remained very poor, although a
number of disposals have successfully been made. In order to ensure that the
Company does not breach any of its banking covenants, and to afford protection
against further downside in the UK equity market, 22% of total assets (£4.9
million) was held in cash at the end of the review period.

Ordinary Shares

As a result of the fall in value of the Company's assets there is no asset
value currently attributable to the Ordinary Shares. The mid market closing
price of the Ordinary shares fell to 1.0p over the six months under review.

Zero Dividend Preference Shares

The net asset value of the ZDP Shares, issued by GBAT Securities, the Company's
subsidiary, fell by 42.5% to 30.3p, whilst the mid market closing price of the
ZDP shares remained unchanged at 16.5p. At 31st January 2003, the consolidated
net assets of the group based on mid-market prices were insufficient to cover
the full final capital entitlement of the ZDP shares of 149.35p with cover
having fallen to 0.20 times.

Dividends

Shareholders will be aware that during the Company's last financial year, it
was necessary to suspend further dividend payments as the requirements of
section 264 of the Companies Act had not been met. A further deterioration in
the Company's financial position over the six months under review has
exacerbated the deficiency in net assets and it is envisaged that no dividend
payments will be made in the foreseeable future.

Resignation of Directors

On 22nd January 2003, both Neil Osborn and Sir John Stanley resigned from the
Board of Directors for personal reasons. I would like to thank them for their
valuable work and support since the formation of the Company.

Outlook

The Company's assets continue to be managed with the objective of maximising
total returns in the run-up to November 2004, the repayment date for the ZDP
shares. Consequently, the Company will continue to seek opportunities to
dispose of the remaining income share portfolio and retain its more marketable
direct equity holdings, seeking further investment opportunities or, where more
appropriate, investing in cash and fixed interest securities.

Conclusion

It has been a further very testing period for your Company and the
difficulties, which face us, have not eased. I very much regret the loss of
value suffered by both classes of our shareholders and hope that in the
remaining life of the Company there are opportunities to rebuild a measure of
the assets we have seen lost over the past 18 months. The Board and its Manager
are continuing to work hard to achieve this.

Interim Report

The Interim Report for the six months to 31st January 2003 will be posted to
shareholders shortly. Copies will also be available from the offices of
Gartmore Investment Limited, Gartmore House, 8 Fenchurch Place, London EC3M
4PB.

GARTMORE INVESTMENT LIMITED

6th March 2003


                                                                                                                                                                            

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