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Gartmore Split Cap (GTB)

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Friday 21 September, 2001

Gartmore Split Cap

Final Results

Gartmore Split Capital Opps Tst PLC
21 September 2001



STOCK EXCHANGE ANNOUNCEMENT

GARTMORE SPLIT CAPITAL OPPORTUNITIES TRUST PLC
RESULTS FOR THE YEAR TO 31st JULY 2001
----------------------------------------------



The Directors announce the Group's unaudited results for the year to 31st
July 2001.

FEATURES
--------

- TOTAL RETURN ON TOTAL ASSETS OF -11.9%

- TOTAL RETURN PER ORDINARY SHARE OF -35.8P

- EARNINGS PER ORDINARY SHARE OF 12.9P

- FOURTH INTERIM DIVIDEND OF 2.75P PER ORDINARY SHARE PAYABLE 30th SEPTEMBER
  2001.

- GSCOT SECURITIES PLC ZERO DIVIDEND PREFERENCE SHARES COVERED 1.0 TIMES AT
  31ST JULY 2001 FOR FULL REPAYMENT ON 1ST NOVEMBER 2004.


GROUP TOTAL RETURN (UNAUDITED)
------------------------------

                                 YEAR TO 31 JULY 2001
                                                                          TOTAL
                                         REVENUE        CAPITAL          RETURN
                                           £'000          £'000           £'000
INCOME AND CAPITAL PROFITS
  Dividends and other income               8,285              -           8,285
  Net loss on investments                      -       (20,839)        (20,839)
                                          ------         ------          ------
RETURN BEFORE EXPENSES, FINANCE

  COSTS AND TAXATION                       8,285       (20,839)        (12,554)
----------------------------------    ----------
                                                 )
  Continuing                               6,132 )
  Discontinued:-                                 )
  The Gartmore Scotland                          )
  Investment Trust PLC                     2,153 )
----------------------------------    ----------
EXPENSES
  Management fees                          (546)          (229)           (775)
  Other expenses                           (429)          (331)           (760)

                                          ------         ------          ------
RETURN BEFORE FINANCE COSTS
 AND TAXATION                              7,310       (21,399)        (14,089)
----------------------------------    ----------
                                                 )
  Continuing                               5,707 )
  Discontinued:-                                 )
  The  Gartmore Scotland                         )
  Investment Trust PLC                     1,603 )
----------------------------------    ----------
FINANCE COSTS
  Interest payable                         (543)          (815)         (1,358)
                                          ------         ------          ------
RETURN BEFORE TAXATION                     6,767       (22,214)        (15,447)
TAXATION                                   (248)            248               -
                                          ------         ------          ------
RETURN AFTER TAXATION                      6,519       (21,966)        (15,447)

NON EQUITY MINORITY INTEREST               (615)          (372)           (987)
                                          ------         ------          ------
RETURN TO EQUITY SHAREHOLDERS              5,904       (22,338)        (16,434)


APPROPRIATED TO
  EQUITY  SHAREHOLDERS
  Dividends - Ordinary shares            (5,161)              -         (5,161)
                                          ------         ------          ------
TRANSFERRED TO/(FROM) RESERVES               743       (22,338)        (21,595)
                                          ------         ------          ------
TOTAL RETURN PER ORDINARY SHARE            12.9P        (48.7)P         (35.8)P
                                         =======        =======         =======



GROUP TOTAL RETURN COMPARATIVE (AUDITED)
----------------------------------------

                              INCEPTION TO 31 JULY 2000

                                                                          TOTAL
                                           REVENUE         CAPITAL       RETURN
                                             £'000           £'000        £'000
INCOME AND CAPITAL PROFITS
  Dividends and other income                 5,814               -        5,814
  Net loss on investments                        -         (2,676)      (2,676)
                                            ------          ------       ------
RETURN BEFORE EXPENSES,

  FINANCE COSTS AND TAXATION                 5,814         (2,676)        3,138
----------------------------------       ---------
                                                   )
  Continuing                                 4,216 )
  Discontinued:-                                   )
  The  Gartmore Scotland                           )
  Investment Trust PLC                       1,598 )
----------------------------------       ---------
EXPENSES
  Management fees                            (422)           (192)        (614)
  Other expenses                             (322)               2        (320)
  Amortised goodwill arising on
  Acquisition of subsidiary                      -            (95)         (95)
                                            ------          ------       ------
RETURN BEFORE FINANCE COSTS
 AND TAXATION                                5,070         (2,961)        2,109
----------------------------------       ---------
                                                   )
  Continuing                                 3,885 )
  Discontinued:-                                   )
  The  Gartmore Scotland                           )
  Investment Trust PLC                       1,185 )
----------------------------------       ---------
FINANCE COSTS
  Interest payable                           (402)           (602)      (1,004)
                                            ------          ------       ------
RETURN BEFORE TAXATION                       4,668         (3,563)        1,105
TAXATION                                     (215)             215            -
                                            ------          ------       ------
RETURN AFTER TAXATION                        4,453         (3,348)        1,105

NON EQUITY MINORITY INTEREST                 (453)         (1,606)      (2,059)
                                            ------          ------       ------
RETURN TO EQUITY SHAREHOLDERS                4,000         (4,954)        (954)


APPROPRIATED TO
 EQUITY SHAREHOLDERS
  Dividends - Ordinary shares              (3,441)               -      (3,441)
                                            ------          ------       ------
TRANSFERRED TO/(FROM) RESERVES                 559         (4,954)      (4,395)
                                            ------          ------       ------
TOTAL RETURN PER ORDINARY SHARE               8.7P         (10.8)P       (2.1)P
                                           =======         =======      =======



NOTES:



Total revenue return per Ordinary Share has been calculated on the return to
equity shareholders of £5,904,000 (2000: 4,000,000) and 45,877,600 (2000:
45,877,600) Ordinary Shares in issue throughout the period.

Total capital return per Ordinary Share has been calculated on the adverse
return for the period of £22,338,000 (2000: 4,954,000).

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

Management fees and finance costs of Gartmore Split Capital Opportunities
Trust PLC are allocated 40% to revenue and 60% to capital.


GROUP BALANCE SHEET                                             AT           AT
-------------------                                       31-07-01     31-07-00
                                                             £'000        £'000
FIXED ASSETS
  Listed investments at valuation                           70,274      119,344

CURRENT ASSETS
  Debtors: Amounts receivable within one year                  644        2,027
  Cash at bank                                               3,789        3,907
                                                           -------      -------
                                                             4,433        5,934
  Creditors: Amounts payable within one year               (2,899)     (13,139)
                                                           -------      -------
NET CURRENT LIABILITIES                                      1,534      (7,205)
                                                           -------      -------
TOTAL ASSETS, LESS CURRENT LIABILITIES                      71,808      112,139

Creditors: Amounts payable after more than
  one year                                                (19,200)      (9,600)
                                                           -------      -------
NET ASSETS                                                  52,608      102,539
                                                           =======      =======
CAPITAL AND RESERVES
Called-up share capital                                        459          459
Special reserve                                             42,509       42,522
Capital reserve - realised                                 (8,516)        (788)
Capital reserve - unrealised                              (18,776)      (4,166)
Revenue reserve                                              1,302          559
                                                           -------      -------
EQUITY SHAREHOLDERS' FUNDS                                  16,978       38,586
Non equity minority interest                                35,630       63,953
                                                           -------      -------
CAPITAL EMPLOYED                                            52,608      102,539
                                                           =======      =======
NET ASSET VALUE PER ORDINARY SHARE                           37.0p        84.1p
                                                           =======      =======

The Net Asset Value Per Ordinary Share is calculated on net assets of £
16,978,000 (2000: 38,586,000) and 45,877,600 (2000: 45,877,600) Ordinary
Shares in issue at the balance sheet date.


GROUP CASH FLOW
----------------                                                      Inception
                                                             Year to         to
                                                            31-07-01   31-07-00
                                                               £'000      £'000
OPERATING ACTIVITIES
Net dividends and interest received
 from investments                                              7,883      4,916
Interest received on deposits                                    307        260
Other income                                                      13         32
Expenses paid allocated to revenue                           (1,112)       (59)
Expenses paid allocated to capital                             (563)      (475)
                                                             -------    -------
Net cash inflow from operating  activities                     6,528      4,674
                                                             -------    -------


SERVICING OF FINANCE
Interest paid                                                (1,463)    (1,397)
Dividends paid                                               (5,046)    (2,294)
Payments to minorities                                      (29,434)      (869)
                                                             -------    -------
Net cash outflow from servicing of finance                  (35,943)    (4,560)

                                                             -------    -------
FINANCIAL INVESTMENT
Acquisition of investments                                  (48,778)  (104,714)
Disposal of investments                                       78,088     35,986
                                                             -------    -------
                                                              29,310   (68,728)
                                                             -------    -------
ACQUISITIONS
Cash Balance acquired                                              -      3,034
                                                             -------    -------
Cash outflow before use of liquid resource and financing       (105)   (65,580)
                                                             -------    -------


FINANCING
Bank loans                                                         -     19,200
Formation costs                                                 (13)    (2,897)
Ordinary shares issued                                             -     38,593
Zero dividend preference shares issued                             -     14,589
Special preference shares issued                                   -          2
Redeemable A shares issued - Company                               -         50
    - GSCOT Securities PLC                                         -         50
Redeemable A shares redeemed - Company                             -       (50)
    - GSCOT Securities PLC                                         -       (50)
                                                             -------    -------
                                                                (13)     69,487
                                                             -------    -------

NET CASH INFLOW                                                (118)      3,907
                                                             -------    -------

Reconciliation of Net Cash (Outflow)/Inflow to Movement
In Net Debt
Net Cash (Outflow)/Inflow                                      (118)      3,907
Bank loans drawn in the year                                       -   (19,200)
                                                             -------    -------
Balance at 31st July                                           (118)   (15,293)
                                                             -------    -------

The group accounts shown above comprise the unaudited results of the Company
and its subsidiaries, GSCOT Securities PLC and The Gartmore Scotland
Investment Trust PLC, for the year to 31 July 2001, and does not constitute
statutory accounts under the Companies Act 1985.

CHAIRMAN'S STATEMENT

For the year to 31st July 2001

This is the second Annual Report of Gartmore Split Capital Opportunities Trust
PLC and my first report to shareholders as Chairman, following the resignation
of Neville Bain on 31st August 2001. I would like to thank Neville for his
valuable work during the Company's first two years.

The Company's investment policy, which is to invest in the split capital
sector, predominantly high yielding income shares, has generated a portfolio
yield on the Company's assets of over 9% - approximately three times the yield
on the FTSE All-Share index. The policy, which was set out in the prospectus
at launch in November 1999, has enabled the Company to meet its dividend
commitments of 10.5p per Ordinary share in the first twelve months of the
Company's life and subsequently to increase its interim dividend payments and
further add to the revenue reserve. Ordinary shareholders will, I am sure, be
pleased with this aspect of the Company's performance over the past year.

Results

At 31st July 2001 the Company had total assets of £71.8 million. This compares
with £121.7 million at the end of the previous year. The reduction of £49.9
million is explained in large measure by the payment of £28.1 million to the
minority shareholders of The Gartmore Scotland Investment Trust (GSIT), the
Company's subsidiary which wound up on 31st July 2001. Additionally, the UK
equity market generally has had a difficult time. The FTSE All-Share Index
produced a negative total return of 10.9% in the Company's year and the income
share sector, in particular, has been extremely weak. Throughout the year
approximately half of the Company's assets was invested in UK equities through
GSIT whose total assets, aggregated with dividends paid, fell by 5.2%. The
other half of the Company's assets was invested in high yielding geared
ordinary income shares and conventional income shares of split capital
investment trusts. The income share portfolio produced a negative total return
of 16.5% during the year. This is clearly a disappointing result, but somewhat
better than the returns achieved by the UK Datastream Investment Trust Income
Share Index and the UK Datastream Investment Trust Highly Geared Ordinary
Share Index which fell by 17.9% and 19.8% respectively. The total return on
the total assets of the Company was -11.9%.

As indicated in the last quarterly report to shareholders, the current capital
structure of the Company has been preserved through the rollover of £9.6
million, due for repayment on 31st July 2001, into a new loan of £9.6 million
fixed until 1st November 2004. Interest is payable on this loan at a rate of
6.47%, which represents a significant improvement on the 6.96% paid
previously. This means that the Company continues to have funding of £19.2
million through bank loans at an average rate of 6.85%.

Ordinary Shares

The net asset value (NAV) of the Company's Ordinary Shares fell by 56% over
the last year to 37.0p at 31st July 2001. This substantial fall highlights the
negative effects of gearing, provided by the bank debt and the Zero Dividend
Preference Shares, when the overall assets of the Company decline while the
prior charge entitlement continues to accrue. The market price of the ordinary
shares fell rather less, however, by 37.4% to 54.75p. This smaller decline
generated a 48% premium to the NAV, which reflects to some degree the support
provided by the very high yield of these shares.

GSCOT Securities Zero Dividend Preference Shares

The asset entitlement per Zero Dividend Preference share rose by 9.3% from
101.9p at 31st July 2000 to 111.4p at 31st July 2001, in accordance with the
terms of their issue. The share price fell from 104.25p to 101.5p over the
same period, representing a discount of 9% to their asset entitlement.
Subsequently, the share price has fallen further. The latest available closing
mid-market price, as I write, is 68.0p on 19th September 2001, which
represents a discount to NAV of 40%. At 31st July 2001 the final entitlement
of the Zeros of 149.35p was covered 1.0 times, but this has fallen further to
0.9 times at 19th September 2001. It should be noted, however, that this is a
conservatively based figure calculated on an assumption of no capital growth
to the redemption date. The recent heavy stock market losses have meant that
many zeros, including our own, are now uncovered. Notwithstanding the Board's
obligations to the Ordinary shareholders and the Company's investment policy,
the Board has made the capital performance of the Company and the
re-establishment of cover for the Zeros a priority whilst satisfying dividend
expectations. The Board is aware, however, that the attainment of this will,
to a large degree, require a recovery from the broader equity market between
now and 1st November 2004 when the zeros are due to be repaid.

Outlook

Following the wind-up of GSIT on 31st July 2001, the Company became entitled
to the repayment of £23.5 million in respect of its shareholdings in GSIT
income, zero dividend preference and capital shares. On the recommendation of
the Managers, the Company took £20.5m of this in specie, comprising 42 UK
equities with an average yield of 3.3%. The balance was taken in cash. The
Board agreed that, given the limited number of attractive investment
opportunities currently available in the split capital sector in general and
the income share sector in particular, holding approximately 30% of the
Company's assets in direct equities would provide both classes of shareholder
with better total return prospects, while still generating sufficient income
to satisfy the dividend expectations of the Ordinary shareholders. Going
forward the Manager will seek investment opportunities from the split capital
sector, whether income shares, zeros or capital shares, and will look to
reinvest proceeds from equity sales in these instruments when attractive
opportunities are presented.

The UK equity market has fallen substantially in recent weeks and this has
exacerbated the problems in the split capital sector where some highly geared
trusts have breached or are close to breaching their banking covenants. Two
trusts, namely the Framlington Net.Net Trust and the European Technology &
Income Trust have been forced to pay back bank debts and dividend payments
have been curtailed. I would stress that your Company is modestly geared and
it is in a comfortable position relative to its banking covenants. Further
dividend cuts in the sector may occur and it may be that these will impinge on
the Company's revenue and capital returns. Your Board is keeping the situation
under constant review, but the Company's sustainable capital structure,
together with its holdings in equities and its revenue reserve of 2.76p per
ordinary share, should enable it to see out better than most what is a very
difficult period for the split capital sector.

ANNUAL REPORT
--------------

The Annual Report of the Group for the year to 31st July 2001 will be posted
to shareholders shortly. Copies will be available from the registered office
of the Company: Gartmore House, 8 Fenchurch Place, London EC3M 4PH.

ANNUAL GENERAL MEETING
----------------------

The Annual General Meeting for 2001 will be held at the Company's Registered
office on Monday 3rd December 2001, at 12.30 p.m.

The above financial information does not constitute statutory accounts under
the Companies Act 1985. The results and balance sheet for the year to 31st
July 2001 are taken from the Company's latest financial statements which are
subject to final audit and have not yet been delivered to the Registrar of
Companies. The comparative financial information is based on the full
statutory accounts for the period ended 31st July 2000, which included an
unqualified audit report and have been filed with the Registrar of Companies.

GARTMORE INVESTMENT LIMITED
21st September 2001



                                                                                
                                                                                
                                                              

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