Interim Management Statement

RNS Number : 4849A

British Assets Trust PLC

01 August 2008

 



British Assets Trust plc

Interim Management Statement

For the Three Month Period 1 April 2008 to 30 June 2008

Investment Objective

British Assets Trust plc aims to achieve a total return in excess of a composite index, weighted as to 75 per cent FTSE All-Share Index and 25 per cent FTSE World (ex UK) Index, by investing principally in a diversified international portfolio of equities and equity-related securities.  Within this overall objective, the Company aims to maintain a progressive dividend policy which will be dependent upon, inter alia, the rate of revenue growth within the investment portfolio, and the level of dividend cover. 

Performance Summary

Total Return1		Three months to 30/6/08	Nine months to 30/6/08
Net asset value		-5.1%	-15.3%
Composite Index2		-1.5%	-11.1%
Capital Values	As at  30/6/08	As at  31/3/08	As at 30/9/07
Share price (mid market)	114.75p	124.50p	140.75p
Discount  - Basic  - Debt adjusted	13.8% 13.4%	12.0% 11.4%	12.8% 11.5%
Gearing  - Net of cash3  - Equity gearing 4	17.4% 9.2%	19.0% 11.3%	15.0% 8.4%

Sources: F&C Investment Business Limited, Datastream.

1.     All total returns are based on net dividends re-invested

2.     Composite Index of 75 per cent FTSE All-Share Index and 25 per cent FTSE World (ex UK) Index

3.     Gearing net of cash: investments/shareholders' funds

4.      Equity gearing: equity investments/shareholders' funds

Review for the Period

The Company's net asset value total return for the three months ended 30 June 2008 was -5.1%. This compares with a return of -1.5% from the composite benchmark index of 75% FTSE All-Share Index and 25% FTSE World (ex UK) Index. UK stock selection accounted for most of the underperformance during the quarter with gearing also being a negative factor. Performance in the UK was affected by the poor performance of the Company's banks and consumer focused companies. The Managers believe that the market concerns towards these sectors are now excessive and not representative of the long term prospects for the businesses involved. Performance was also affected by the Company's underweight exposure to resources, which continues to see strong performance but where the Managers believe weaker global demand will result in lower commodity prices and thus weaker earnings growth prospects going forward.

During the quarter, as fears over risk in the financial system eased in the wake of the Bear Stearns rescue in March, attention shifted to the challenging economic backdrop. Strong rallies in equity and credit markets in April were derailed by concerns over the impact of spiking oil and food prices on the global economy. Meanwhile, government bond markets moved to modify expectations of further interest rate cuts and priced in increases as inflationary pressures began to take centre stage with policy makers.

Equity markets weakened over the quarter, with sharp declines in all major markets in June cancelling out any progress made earlier in the quarter. Companies in the oil, gas and mining industries and related support services remained the notable exception to this general theme. With the exception of Japan, major equity markets and government bond markets delivered negative returns over the second quarter of 2008. 

Dividends

A first interim dividend in respect of the year ended 30 September 2008, of 1.4p per share, was paid on 11 April 2008 to shareholders on the register on 14 March 2008.

Share Buy Backs

During the period, the Company bought back 2,000,000 shares for cancellation for a total consideration of £2.6 million.

Board Composition 

As previously announced, Mr Ian Russell was appointed as a non-executive Director of the Company on 1 June 2008. The Board believes that Mr Russell's experience will be of benefit to the Company. He is a former chief executive and finance director of Scottish Power plc. He is currently a non-executive director of Johnston Press plc and The Mercantile Investment Trust plc, Chairman of Remploy Limited and an adviser to the 3i Group.

Top Ten Holdings as at 30/6/08

Company	Country	% of total assets
BP	UK		5.8
Vodafone Group	UK		4.2
Royal Dutch Shell	UK		3.5
GlaxoSmithkline	UK		3.0
Anglo American	UK		2.7
HSBC Holdings	UK		2.6
Royal Bank of Scotland Group	UK		2.4
BG Group	UK		2.1
AstraZeneca	UK		2.1
Centrica	UK		2.1
Total			30.5

 

Geographical Analysis

Country	30/6/08 % of total assets		31/3/08  %of total assets
UK		61.1		63.5
North America		11.9		11.8
Europe (ex UK)		6.5		7.3
Pacific (ex Japan)		5.8		5.8
Japan		3.7		3.4
Corporate Bonds		6.7		6.3
Net Current Assets		4.3		1.9
Total		100.0		100.0

The Board is not aware of any significant events or transactions which have occurred since 30 June 2008 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and Key Information

Further information regarding the Company, including daily net asset values published since the end of the period and monthly factsheets, can be found at the Company's website www.british-assets.co.uk, or at www.fandc.com.

For further information please contact:

Julie Dent/Gordon Hay Smith

F&C Investment Business Limited

Tel: [phone]

 

END

 

 

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