Final Results
Baillie Gifford Japan Trust PLC
03 October 2003
THE BAILLIE GIFFORD JAPAN TRUST PLC
Results for the year to 31 August 2003
The Baillie Gifford Japan Trust PLC outperformed its Benchmark Index* over the
year to 31 August 2003 by 4.5 percentage points. Net asset value per share rose
by 12.7%, while the Benchmark Index gained 8.2%. Since April, the Japanese
market has risen sharply, spurred by strengthening corporate earnings,
attractive valuations, increasing trading volumes and with foreign investors
redressing their heavily underweight positions. This has compounded strong
second half performance, with net asset value rising 33.5% compared to a 25.6%
rise in the Benchmark Index.
• Gearing and performance. Since April, exposure to equities has steadily
increased as prospects for corporate earnings growth have firmed. By the
Company's year end, net gearing was equal to 22.0% of net assets, with
outperformance being driven by large holdings such as Konica Minolta and
new holdings such as Sumitomo Realty and Kenwood.
• Improving economic data. The initial export led economic recovery has
prompted a sharp rebound in domestic capital expenditure. The lower than
anticipated impact of SARS on Japan's Asian export markets and China's
rapid economic expansion have proved a significant stimulus to demand. In
recent months, GDP growth forecasts have risen dramatically from 0.5% to
2.0% and could rise further. Retail price indicators suggest that deflation
is lessening.
• Optimistic outlook. In contrast to past examples, the recent rally in
Japanese equities has not been stimulated by fiscal packages or technical
market support measures, but, rather by the relative strength of Japanese
corporate earnings against global peers. In spite of the sharp rally, most
companies are still trading on attractive multiples of earnings and free
cash flow.
• Change in Benchmark Index. The Board intends to measure performance solely
against TOPIX in the future, due to the increasing irrelevance of the
Second Section Index, as trading volumes dry up and companies transfer
directly to the First Section.
* The Company's Benchmark index during the year comprised 75% TOPIX and 25%
Tokyo Stock Exchange Second Section Index, in sterling terms.
The Baillie Gifford Japan Trust PLC aims to pursue long-term capital growth
principally through investment in medium to smaller sized Japanese companies.
The Company is managed by Baillie Gifford & Co., the leading independent
Edinburgh based fund management group with around £25 billion under management
and advice.
2 October 2003
- ends -
For further information please contact:
Sarah Whitley, Manager
The Baillie Gifford Japan Trust PLC 0131 222 4000
Mike Lord, Director
Broadgate Marketing 020 7726 6111
Baillie Gifford & Co. is authorised and regulated by the Financial Services
Authority.
THE BAILLIE GIFFORD JAPAN TRUST PLC
The following is the unaudited preliminary statement for the year to 31 August
2003 which was approved by the Board on 2 October 2003. The Directors of The
Baillie Gifford Japan Trust PLC are recommending to the Annual General Meeting
of the Company to be held on 26 November 2003 that no dividend be paid for the
year ended 31 August 2003.
THE BAILLIE GIFFORD JAPAN TRUST PLC
STATEMENT OF TOTAL RETURN
(unaudited and incorporating the revenue account*)
for the year ended for the year ended
31 August 2003 31 August 2002
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Realised - (12,882) (12,882) - (11,001) (11,001)
losses on
investments
Unrealised - 22,567 22,567 - (5,284) (5,284)
gains/(losses)
on investments
Currency - (64) (64) - 162 162
(losses)/gains
(note 1)
Income 797 - 797 808 - 808
Investment (718) - (718) (847) - (847)
management fee
Other (184) - (184) (202) - (202)
administrative
expenses
Net return (105) 9,621 9,516 (241) (16,123) (16,364)
before
finance costs
and taxation
Finance costs (159) - (159) (116) - (116)
of borrowings
Return on (264) 9,621 9,357 (357) (16,123) (16,480)
ordinary
activities
before
taxation
Tax on (93) - (93) (120) - (120)
ordinary
activities
Return on (357) 9,621 9,264 (477) (16,123) (16,600)
ordinary
activities
after taxation
Transfer (357) 9,621 9,264 (477) (16,123) (16,600)
(from)/to
reserves
Return per (0.57p) 15.40p 14.83p (0.75p) (25.40p) (26.15p)
ordinary share
(note 3)
* The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in this statement derive from continuing
operations.
THE BAILLIE GIFFORD JAPAN TRUST PLC
SUMMARISED BALANCE SHEET
at 31 August 2003
(unaudited)
31 August 2003 31 August 2002
£'000 £'000
NET ASSETS
Listed overseas equities 96,084 79,180
Unlisted equities - traded on the 8,746 6,957
Japanese OTC/Hercules Japan markets
Unlisted equities - other unlisted 1,484 1,317
Total fixed asset investments 106,314 87,454
Net liquid (liabilities)/assets (226) 5,223
Total assets (before deduction of bank 106,088 92,677
loans)
Bank loans (note 4) (19,506) (14,176)
86,582 78,501
CAPITAL AND RESERVES
Called-up share capital 3,097 3,167
Capital reserves 90,350 81,842
Revenue reserve (6,865) (6,508)
EQUITY SHAREHOLDERS' FUNDS 86,582 78,501
NET ASSET VALUE PER ORDINARY SHARE 139.8p 124.0p
Ordinary shares in issue 61,935,000 63,335,000
THE BAILLIE GIFFORD JAPAN TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
Year to Year to
31 August 2003 31 August 2002
£'000 £'000 £'000 £'000
NET CASH OUTFLOW (27) (284)
FROM OPERATING
ACTIVITIES
NET CASH OUTFLOW (157) (119)
FROM SERVICING OF
FINANCE
TOTAL TAX PAID (98) (119)
FINANCIAL INVESTMENT
Acquisitions of (51,026) (50,387)
investments
Disposals of 44,309 43,198
investments
Realised currency (147) (433)
loss
NET CASH OUTFLOW (6,864) (7,622)
FROM FINANCIAL
INVESTMENT
NET CASH OUTFLOW (7,146) (8,144)
BEFORE FINANCING
FINANCING
Shares purchased for (1,183) (446)
cancellation
Bank loans drawn down 5,413 9,440
Bank loans repaid - (5,676)
NET CASH INFLOW FROM 4,230 3,318
FINANCING
DECREASE IN CASH (2,916) (4,826)
RECONCILIATION OF
NET CASH FLOW TO
MOVEMENT IN NET DEBT
Decrease in cash in (2,916) (4,826)
the year
Net cash flow from (5,413) (3,764)
bank loans
Exchange movement on 83 595
bank loans
MOVEMENT IN NET DEBT (8,246) (7,995)
IN THE YEAR
NET DEBT AT 1 (10,767) (2,772)
SEPTEMBER
NET DEBT AT 31 AUGUST (19,013) (10,767)
THE BAILLIE GIFFORD JAPAN TRUST PLC
TWENTY LARGEST EQUITY HOLDINGS
at 31 August 2003
Name Business Market value % of total
£'000 assets
Konica Minolta Office equipment and 4,037 3.8
Holdings imaging
NTT DoCoMo Mobile 3,446 3.3
telecommunications
Takeda Chemical Pharmaceuticals 3,187 3.0
Industries
KDDI Mobile 2,911 2.7
telecommunications
Canon Printers and copiers 2,857 2.7
TDK Electronic components 2,854 2.7
Yamada Denki Consumer electronics 2,779 2.6
retailer
Kyocera Electronic components 2,706 2.5
LeoPalace21 Condominium developer 2,700 2.5
and lessor
Tostem Inax Building materials 2,632 2.5
Holdings
Uniden Cordless phone 2,507 2.4
manufacturer
JFE Holdings Major steel company 2,483 2.3
Sumitomo Realty Property development 2,458 2.3
and Development and leasing
UFJ Holdings Major bank 2,414 2.3
NTT Telecommunications 2,381 2.3
Bandai Maker of toys, cartoons 2,335 2.2
and character goods
Aiful Consumer finance 2,332 2.2
Goodwill Group Part-time labour and 2,307 2.2
nursing care
Ushio Specialist lighting 2,303 2.2
products
Itochu Trading conglomerate 2,276 2.1
53,905 50.8
THE BAILLIE GIFFORD JAPAN TRUST PLC
NOTES
31 August 2003 31 August 2002
£'000 £'000
1. Currency (losses)/gains
Realised exchange differences (147) (729)
Movement in unrealised exchange 83 891
differences
(64) 162
2. No dividend will be declared.
3. Return per ordinary share
Revenue return (357) (477)
Capital return 9,621 (16,123)
Return per ordinary share is based on the above totals of revenue and
capital and on 62,473,082 (2002 - 63,485,946) ordinary shares, being the
weighted average number of ordinary shares in issue during the year.
4. Bank loans of £19.5 million (Y3.6 billion) have been drawn down under
yen loan facilities which are repayable between August 2006 and August
2008 (31 August 2002- £14.2 million (Y2.6 billion)).
5. During the year 1,400,000 ordinary shares with a nominal value of
£70,000 were bought back for a total consideration of £1,183,000. At
31 August 2003 the Company had authority to buy back a further
8,433,956 shares.
6. The financial information set out above does not constitute the
Company's statutory accounts for the year ended 31 August 2003. The
financial information for 2002 is derived from the statutory accounts
for 2002, which have been delivered to the Registrar of Companies. The
Auditors have reported on the 2002 accounts, their report was
unqualified and did not contain a statement under section 237(2) or
(3) of the Companies Act 1985. The statutory accounts for 2003 will be
finalised on the basis of the financial information presented in this
preliminary announcement and will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
This information is provided by RNS
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