Final Results

Schroder UK Growth Fund PLC 19 June 2001 Press Release 19 June 2001 For Immediate Release - Tuesday 19 June 2001 Schroder UK Growth Fund plc Preliminary Results For The Year Ended 30 April 2001 Preliminary Results The Directors of Schroder UK Growth Fund plc announce the unaudited preliminary results for the year ended 30 April 2001: Year Ended Year Ended 30 April 2001 30 April 2000 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised - 13,704 13,704 - 28,285 28,285 gains on sales of investments Unrealised - (59,945) (59,945) - (36,204) (36,204) losses on investments Losses on - (46,241) (46,241) - (7,919) (7,919) investments Premia paid - (141) (141) - (392) (392) on purchase of warrants for cancellation Income 7,613 - 7,613 9,031 - 9,031 Investment (399) (1,128) (1,527) (1,238) (1,238) (2,476) management fees Administrative (308) - (308) (269) - (269) expenses Net return 6,906 (47,510) (40,604) 7,524 (9,549) (2,025) before finance costs and taxation Interest (808) (1,885) (2,693) (18) (18) (36) payable Net return 6,098 (49,395) (43,297) 7,506 (9,567) (2,061) on ordinary activities before taxation Taxation on - - - - - - ordinary activities Return on 6,098 (49,395) (43,297) 7,506 (9,567) (2,061) ordinary activities after taxation attributable to equity shareholders Dividends (9,188) - (9,188) (8,521) - (8,521) Transfer (3,090) (49,395) (52,485) (1,015) (9,567) (10,582) (from)/to reserves Return per 3.07p (24.89)p (21.82)p 3.41p (4.35)p (0.94)p ordinary share Return per 2.96p (23.96)p (21.00)p 3.28p (4.18)p (0.90)p ordinary share - fully diluted Dividends for the year 3.00p - 3.00p 4.00p - 4.00p per ordinary share - ordinary Dividends for the year 1.80p - 1.80p - - - per ordinary share - special Dividends for the year 4.80p - 4.80p 4.00p - 4.00p per ordinary share - total At 30 April 2001 At 30 April 2000 Summary Balance Sheet Assets £'000 £'000 Investments 321,878 362,245 Net current (liabilities)/assets (33,539) 2,739 Net Assets 288,339 364,984 Net asset value per share - undiluted 150.75p 175.63p Net asset value per share - diluted 144.63p 166.66p Year Ended Year Ended 30 April 2001 30 April 2000 Abridged Cash Flow Statement £'000 £'000 Net cash inflow from operating activities 5,536 6,963 Total interest paid (2,696) - Total tax paid (163) (24) Net cash (outflow)/inflow from financial (5,421) 32,927 investment Equity dividends paid (8,022) (8,949) Net cash inflow/(outflow) from financing 22,598 (27,578) Net cash inflow 11,832 3,339 Reconciliation of net cash flow to movement in net funds Year Ended Year Ended 30 April 30 April 2001 2000 £'000 £'000 Increase in cash in the year 11,832 3,339 Movement in overdraft and bank loan to finance (47,000) (3,000) investments Change in net (debt)/funds (35,168) 339 Net funds at the beginning of the year 6,123 5,784 Net (debt)/funds at 30 April (29,045) 6,123 The above financial information is unaudited and does not constitute statutory accounts under Section 240 of the Companies Act 1985 (as amended). Statutory accounts for the financial year ended 30 April 2000 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 30 April 2001 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. This announcement is prepared on the basis of the accounting policies as set out in the most recent published set of annual financial statements. However, management fees and finance costs are now allocated 70:30 between capital and revenue (formerly 50:50). This statement was approved by the Board of Directors on 18 June 2001. Statement by the Chairman, Mr. Peter Sedgwick: Performance The year to 30 April 2001 has been particularly disappointing for growth oriented stocks. This has had a severely negative impact on the performance of the Company. During the year to 30 April 2001, the Company's net asset value produced a negative total return of 11.32 per cent. whilst the FTSE All-Share Index, the Company's benchmark Index, posted a negative return of 2.15 per cent. Background The Company's portfolio has been positioned with the principal objective of achieving capital growth over the longer term. Holdings have therefore been weighted towards those areas of the market that are most likely to deliver this growth such as Pharmaceuticals, Information Technology, Electronics and Support Services. Conversely, the portfolio is not exposed to mature, albeit stable sectors, where growth prospects are more limited such as Utilities, Foods and Beverages. The focus on growth stocks, which tend to trade on higher valuations than the more mature, so called 'value' stocks, has been the main cause of the under-performance relative to the FTSE All-Share Index over the last twelve months. Whilst the Company's portfolio was not particularly exposed to internet stocks, it has suffered from the more broadly based under-performance of technology growth stocks over the last few months as company profit warnings have escalated. Dividend Policy Last year, I reported that the Company's dividend policy would not be sustainable in light of the Company's change in investment policy. The Board believes that the ordinary dividends for the year to 30 April 2001 of 3.0p per share provide a firm base for a progressive dividend policy going forward. In addition, the Board believes that it would be appropriate to pay a special dividend of 1.8p at the same time as the second ordinary interim dividend of 1.1p for the year ended 30 April 2001. The special dividend will be paid from accumulated revenue reserves as a one-off payment. Gearing Policy During the year to 30 April 2001, the Company maintained a 364-day revolving facility with The Royal Bank of Scotland plc. At the beginning of the financial year, the facility was undrawn, but following draw-downs of £10 million, £15 million and £25 million during the year, the facility was fully drawn and has remained so since the end of the financial year. Purchase of Shares and Warrants for Cancellation During the year, the Board continued to operate an active share buy-back policy and a total of 17,077,768 ordinary shares were purchased for cancellation, equal to 8.2 per cent. of the total shares in issue on 1 May 2000. A resolution to renew the authority is included in the Notice of the Annual General Meeting. The Directors also continued to purchase warrants for cancellation during the year to 30 April 2001 when suitable opportunities to enhance shareholder value arose. A total of 1,174,899 warrants were purchased for cancellation during the year. Penultimate Warrant Exercise Date on 31 August 2001 A Circular to warrant holders will be distributed with the Annual Report and Accounts, as in previous years, to remind them of the next available opportunity to exercise their warrants. The next warrant exercise date is 31 August 2001, and I would like to remind all warrant holders that there will be only one additional opportunity left after that date to exercise their warrants, on 31 August 2002. Warrants may also, of course, be traded on the stock market in the same way as ordinary shares are traded. Outlook Offsetting the negative news which has dominated growth stocks during the year under review, has been the dramatic easing of US monetary policy since the beginning of 2001, with five half point interest rate cuts in as many months. This should stabilise the US economy in the next few months. Following substantial share price falls in recent months many growth stocks now offer more reasonable value and the Investment Manager remains committed to the strategy of holding shares in growth companies for the long term. Annual General Meeting The Annual General Meeting will be held at 12.00 noon on Monday 6 August 2001, and shareholders are encouraged to attend. The meeting, as in previous years, will include a presentation by the Investment Manager on the prospects for the UK market and the Company's investment strategy. Peter Sedgwick Chairman ____________________________ Second Interim Dividend The Directors of the Company have declared the payment of a second interim dividend, in lieu of a final dividend, of 2.90p net per share, which includes a special dividend of 1.80p net per share, making a total distribution of 4.80p, for the year ended 30 April 2001. The second interim dividend will be payable on 31 July 2001 to shareholders on the register on 6 July 2001. Ex-Dividend Date : 4 July 2001 Transfers must be lodged by : 2.30 p.m. on 6 July 2001 Dividend Warrants : Despatched on 30 July 2001 Payment Date : 31 July 2001 Dividend per share : 2.90p net* *This includes a special dividend of 1.80p. The Annual Report and Accounts will be mailed to shareholders at their registered addresses in July 2001 and copies of the Annual Report and Accounts will be available to the public at the Company's registered office: 31 Gresham Street, London, EC2V 7QA. Enquiries: Schroder Investment Management Limited John Spedding (020 7658 3206) 19 June 2001

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