Interim Results

Schroder Split Investment Fund PLC 21 June 2004 21 June 2004 PRESS RELEASE PRELIMINARY results The Directors of Schroder Split Investment Fund plc announce the unaudited preliminary results of the Group for the six months ended 30 April 2004 Highlights 30 April 2004 31 October 2003 % Pence Pence change Net asset value per Zero Dividend Preference Share 118.28p 113.96p +3.8% Ordinary Share 78.61p 73.19p +7.4% Share price per Zero Dividend Preference Share 122.75p 119.00p +3.2% Ordinary Share 67.25p 67.75p -0.1% Total return to Results for the 6 months Results for the 6 months shareholders to 30 April 2004 to 30 April 2003 £'000 £'000 Zero Dividend Preference Shares 1,187 1,096 Ordinary Shares 3,388 (302) Chairman's Statement Performance During the six month period ended 30 April 2004, the performance of the Group has been encouraging with a net asset value total return of 7.4 per cent compared to the FTSE All-Share Index total return of 7.1 per cent and the FTSE 350 Higher Yield Index total return of 7.2 per cent. Dividend The Board has announced two interim dividends for the accounting year ending 31 October 2004 of 1.4 pence each per share. The Directors currently expect that they will be able to declare dividends totalling 6.0 pence per share in respect of the current year (2003: 6.0 pence per share). Discount on the Ordinary Shares The discount to net asset value of the price of the Company's ordinary shares has widened significantly since the beginning of the financial year. At 31 October 2003 the discount stood at 7.4 per cent, and this widened to 14.5 per cent at 30 April 2004. Since the end of the period, the discount has further widened to 19.0 per cent at the time of writing. Your Board believes that good performance is the most important long-term factor in determining the discount, however, in the short term the share price continues to be impacted by poor market sentiment towards the sector. Portfolio and Gearing At 30 April 2004 approximately 73 per cent of our total assets are invested in equities, 24 per cent in fixed interest securities and 3 per cent in cash. The Group has not, since inception, held any interests in other split capital investment trusts and I re-iterate that we have no intention of holding such investments in the future. Our Bank loan of £12.1m represented 15.7 per cent of total assets at 30 April 2004 (16.4 per cent at 31 October 2003). This loan, on which we pay a fixed interest rate of 6.05 per cent per annum, is due for repayment in November 2007. Outlook The Group's equity portfolio has continued to perform well. This coupled with the Group's exposure to investment grade bonds to help balance the structural gearing in place since launch has again produced positive performance for the Group and should continue to provide shareholders with re-assurance that the business model adopted at launch remains conservative. John Padovan Chairman 18 June 2004 Investment Managers' Report Equity Portfolio (approximately 73 per cent of Gross Assets) Performance The value of the UK equity investments rose by 8.7 per cent during the six month period to 30 April 2004 compared to a rise in the FTSE All-Share and FTSE 350 High Yield Indices of 7.1 per cent and 7.2 per cent respectively. Market Background and Explanation of Performance The stock market rose due to investor's increased confidence in an improvement in the world economy, in particular that of the US. Towards the end of the period under review, the prospect of rising interest rates led to a shift towards the more defensive areas of the market such as beverages and tobacco, and away from cyclical areas such as mining and banking. These trends benefited the Company. The sharp rally over the last year in mid and small capitalisation stocks has closed much of the valuation gap between them and the larger capitalisation companies. Bearing this in mind we believe there are more opportunities now in some of the larger companies. For example, the company has added to holdings in Abbey National and Scottish & Newcastle. Fixed Interest Portfolio (approximately 24 per cent of Gross Assets) Performance The total returns of the Schroder Monthly High Income Fund and the Schroder Corporate Bond Fund were 3.8 per cent and 1.9 per cent respectively during the six month period to 30 April 2004. Market Background and Explanation of Performance The progress of bond markets slowed over the period, reflecting the improvement in global economic outlook. However, with only the shortest maturity yields rising significantly over the period, bonds still produced positive performance, partly on the back of flows from equities. Our positioning on anticipation that yields would generally rise contributed negatively to the performance of the Company. For the UK corporate bond market, the positive outlook for companies and their balance sheets as economic growth began to feed through encouraged us to maintain an overweight to lower-rated investment grade bonds that would perform well. The Company benefited from this bias. Outlook We expect the recovery in economic growth will be weaker than in the past as it is reliant on corporate rather than consumer expenditure. The risks to the recovery are the imbalances that remain within the US economy, namely the record levels of private sector indebtedness and a record current account deficit. Schroder Investment Management Limited 18 June 2004 Unaudited Group Statement of Total Return Results for the six months Results for the six months 30 April 2004 30 April 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains /(losses) on investments - 3,357 3,357 - (427) (427) Income 1,942 - 1,942 1,913 - 1,913 Investment management fee (79) (119) (198) (60) (90) (150) Other administrative expenses (161) - (161) (179) - (179) ------------------ ------- ------- ------- ------- ------- --------- Return / (deficit) on ordinary activities before finance costs and taxation 1,702 3,238 4,940 1,674 (517) 1,157 Interest payable (146) (219) (365) (145) (218) (363) Provision for the redemption of Zero dividend preference shares in the subsidiary - (1,187) (1,187) - (1,096) (1,096) ------------------ ------- ------- ------- ------- ------- --------- Return / (deficit) on ordinary activities before taxation 1,556 1,832 3,388 1,529 (1,831) (302) Taxation on ordinary activities (97) 97 - (87) 87 - ------------------ ------- ------- ------- ------- ------- --------- Return/(deficit) after taxation attributable to ordinary shareholders 1,459 1,929 3,388 1,442 (1,744) (302) Dividends : ordinary shares - first interim dividend (577) - (577) (577) - (577) - second interim dividend (577) - (577) (577) - (577) ------------------ ------- ------- ------- ------- ------- --------- Transfer to/ (from) reserves 305 1,929 2,234 288 (1,744) (1,456) ------------------ ------- ------- ------- ------- ------- --------- Return per share ------------------ ------- ------- ------- ------- ------- --------- Ordinary shares 3.54p 4.68p 8.22p 3.50p (4.23)p (0.73)p ------------------ ------- ------- ------- ------- ------- --------- Dividends per share 2.80p - 2.80p 2.80p - 2.80p ------------------ ------- ------- ------- ------- ------- --------- Zero dividend preference - 4.32p 4.32p - 3.99p 3.99p shares ------------------ ------- ------- ------- ------- ------- --------- Unaudited Abridged Group Cash Flow Results for Results for Statement the the six months six months 30 April 2004 30 April 2003 £'000 £'000 Net cash inflow from operating activities 864 1,205 Bank loan interest paid (146) (363) Dividends paid (1,319) (1,277) UK tax paid - (24) Net cash inflow/(outflow) from investing activities 3,311 57 Net cash (outflow)/inflow from financing - (9) Net cash inflow/(outflow) 2,710 (411) Summary Summary Summary Summary Unaudited Unaudited Balance Balance Balance Sheets Balance Sheets Sheets at 31 Sheets at 31 at 30 April 2004 at 30 April 2004 October 2003 October 2003 Group Company Group Company £'000 £'000 £'000 £'000 Fixed Asset Investments Equities listed in the United Kingdom 56,115 56,115 54,019 54,019 Fixed interest investments 18,393 18,393 18,059 18,059 Investment in subsidiary - 50 - 50 ------------ ----------- ----------- ----------- 74,508 74,558 72,078 72,128 Net current assets 2,471 2,421 1,480 1,430 Creditors : Amounts falling due after more than one year Loan facility (12,100) (12,100) (12,100) (12,100) Amount owed to group undertaking - (32,489) - (31,302) Zero dividend preference shares in the subsidiary (32,489) - (31,302) - Net Assets 32,390 32,390 30,156 30,156 Funds attributable * to Ordinary shares 32,390 30,156 Zero dividend preference shares in the subsidiary 32,489 31,302 64,879 61,458 Net asset value per zero dividend preference share 118.28p 113.96p Net asset value per ordinary share 78.61p 73.19p *Funds Attributable may be defined as the net assets employed before deducting amounts owed in respect of zero dividend preference shares. Notes 1. The above financial information is unaudited and does not amount to statutory accounts under Section 240 of the Companies Act 1985 (as amended). The statutory accounts for the year to 31 October 2003 have been delivered to the Registrar of Companies. 2. The Group accounts consolidate the accounts of the Company and its wholly owned subsidiary Schroder Split ZDP plc. 3. As permitted by Section 230 of the Companies Act 1985, the Company has not presented its own revenue account. The net revenue after taxation for the period to 30 April 2004 of the Company dealt with in the accounts of the Group was £1,459,000 (Year to 31 October 2003: £2,573,000.) This statement was approved by the Board of Directors on 21 June 2004. The Interim Report will be mailed to shareholders at their registered addresses in July 2004 and from the date of release copies of the Interim Report will be available to the public at the Company's registered office: 31 Gresham Street, London, EC2V 7QA. Enquiries: Schroder Investment Management Limited Neil Olofsson (020 7658 3496) 21 June 2004 This information is provided by RNS The company news service from the London Stock Exchange

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