3i UK Select Trust Ld
28 February 2001
FINAL RESULTS AND PROPOSED DIVIDEND
The unaudited figures for the year ended 31 December 2000 are as follows:
31 December 2000 31 December 1999
Dividends and interest 2,199 2,498
Commissions 4 4
Revenue 1,733 2,053
Amount absorbed by dividends (1,566) (1,764)
Amount transferred to revenue
reserves - 167 289
Interim and final (special 1999)
dividend per ordinary share 2.77p 3.06p
Earnings per ordinary share 3.04p 3.56p
31 December 2000 31 December 1999
Market value of investments 83,703 86,036
Total net assets 76,008 84,635
Net asset value per ordinary share at
10p 134.2p 146.9p
each (ex dividend)
The directors propose that ordinary shareholders should be offered the right
to elect to receive new ordinary shares in lieu of the cash final dividend.
The Chairman, Advocate JM Le Pelley commented as follows:
Equity markets produced their weakest returns for over a decade in 2000.
Negative returns were seen worldwide and were the result of several factors.
Firstly, the very high valuations of technology stocks began to decline in
the spring and acted as a depressant on investor sentiment for the remainder
of the year. Secondly, fears of the impact of interest rate increases on
profitability acted as a cap on markets through the middle of the year.
Finally evidence of a sharp and unexpected economic slow down in the United
States appeared in the final quarter driving markets in that country to lows
for the year.
During the year your company's portfolio produced a total return,
combining capital and income, of -6.5%. This may be compared to the total
return of the FTSE All-Share Index of -5.9%. The portfolio outperformed
the market over the last nine months of the year following the start of
the decline in technology stocks.
In common with most investment trusts the price at which shares in your
company trade stands at a discount to the net asset value of the shares.
At the end of December 2000 the discount had narrowed slightly to 15%
from the 16% recorded at the end of December 1999. This improvement means
that after accounting for dividends paid during the year shareholders
received a total return of -4.2%. In the course of the year, and after
adjusting for shares issued as scrip dividends, a million shares were
bought for cancellation. The Board's policy remains to buy-in at least as
many shares as are issued as scrip dividends and to buy more should the
discount become excessive.
Earnings per share were 3.04p down from 3.56p in 1999. The reduction had
three principal causes: a sharp fall in the number and size of special
dividends; a reduction in the yield of the portfolio as low-yielding
shares with growth prospects were bought; and dividend cuts from some
large companies. These factors are discussed at greater length in the
fund manager's report. Against this background the Board recommend a
final ordinary dividend of 1.94p, an increase of 3.2%. If the proposed
final dividend is approved by shareholders dividends for the year will
total 2.77p, an increase of 2.2% over last year.
The Board has decided to change registrars and from the end of May 2001
shareholders will receive share certificates and dividend payments from
Capita IRG (CI) Limited. This change will allow shareholders who so wish
to have their shareholdings registered with the London Stock Exchange's
For the third year in a row I have to report on a volatile start to the
new year in equity markets. At the end of 2000 pessimism developed as the
US economy appeared to be slowing sharply. In January the American
authorities cut interest rates twice and began moves to reduce taxation.
Rates were cut in the UK in February. Initially these developments
boosted equity markets but they have since drifted back. Although
sentiment is currently depressed by the impact of the economic slowing
the benefits of monetary and fiscal easing should be seen later in the
The directors have decided to declare a final dividend of 1.94p (1999:
1.88p) for the year ended 31 December 2000 making a total dividend of
2.77p, (1999: 3.06p including a special dividend of 0.35p).
The final dividend will be payable on 4 May 2001 on such of the ordinary
shares in respect of which the holders had not, prior to 10 April 2001,
elected to receive an allotment of new ordinary shares.
The record date for the final dividend in respect of the year ended 31
December 2000 is 9 March 2001.