Preliminary Announcement of Results - NAV Up 29.8%
MORGAN GRENFELL EQUITY INCOME TRUST PLC
28 October 1999
MORGAN GRENFELL EQUITY INCOME TRUST PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
EXTRACT FROM THE CHAIRMAN'S STATEMENT
I am pleased to be able to report that the Company's net asset value per
share rose by 29.8%, outperforming by 9.3% the increase in the capital value
of the UK equity market as measured by the FT-SE All Share Index, which rose
20.5%. This represents a welcome recovery in performance and more than
compensates for the disappointing return in the previous year. The share
price has reflected the good performance, rising by 38.3% and the discount to
net assets has improved from 17.1% to 11.7%.
In the Company's interim statement, I was able to report on the strong
recovery in the UK equity market from the lows seen at the time of the
Company's last year-end. During the second half of the current year the market
fell slightly, as investors became concerned about the extent of the interest
rate rises which may be necessary to contain the strong growth in the
economy. Therefore I can reflect upon a year which began with expectations
of a recession in the UK and ended with concerns that the economy was
growing too rapidly with a risk that this would lead to resurgence in
inflation.
The background for companies improved over the course of the year as both the
UK and other major economies showed signs of stronger growth. However, the
strength of sterling remained a problem for the manufacturing sector and
despite the revival in the economy the competitive environment for many
consumer companies worsened. In many industries the effect of this increased
competitive pressure was to increase the amount of merger activity and we saw
further consolidation in a number of sectors, particularly financial services.
Our revenue return per share was ahead of last year, increasing 33.4%, but
once again the increasing incidence of companies paying special dividends,
sometimes in lieu of a more progressive dividend policy, makes it difficult
to judge the underlying picture. The Board is proposing a final dividend of
4.90p per share which reflects the policy of more modest dividend growth
indicated in last year's annual report, adjusted for the windfall effect of
special dividends. This makes, together with the interim dividend of 2.45p
per share already paid, a total dividend for the year of 7.35p per share, 2.8%
higher than last year.
J. Leigh Pemberton
Chairman
The final dividend of 4.90p per share will be paid on 29 December 1999 to
shareholders on the register at the close of business on 19 November 1999.
The financial information set out overleaf does not constitute the Company's
statutory accounts for the years ended 30 September 1999 or 1998. The
financial information for 1998 is derived from the statutory accounts for 1998
which have been delivered to the Registrar of Companies. The Auditors have
reported on the 1998 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 1999, which have not yet been reported on by the
Auditors, 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.
The annual report will be sent to shareholders and will also be made
available to the public at the Company's registered office.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on Thursday, 16 December 1999 at
11.00 a.m. at Winchester House, 1 Great Winchester Street, London EC2.
By order of the Board Registered Office:
P A Hogwood 20 Finsbury Circus
Secretary London EC2M 1NB
28 October 1999
For further information please contact James Fox or Adrian Frost at
Deutsche Asset Management Tel: 0171 545 6000.
30 September 1999 30 September 1998
Net Asset Value Per
Ordinary Share Basic 245.1p 188.8p
239.9p 183.7p
Statement of total return (incorporating the revenue account*)
for the year ended 30 September
Revenue Capital Total Revenue Capital Total
1999 1999 1999 1998 1998 1998
£'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses) on
investments - 22,238 22,238 - (5,159) (5,159)
Income 4,474 - 4,474 3,589 - 3,589
Investment management
fee (808) - (808) (707) - (707)
Other expenses (132) - (132) (127) - (127)
Net return before finance
costs and taxation 3,534 22,238 25,772 2,755 (5,159) (2,404)
Interest payable (26) - (26) (7) - (7)
Return on ordinary
activities before tax 3,508 22,238 25,746 2,748 (5,159) (2,411)
Tax on ordinary
activities (470) - (470) (500) - (500)
Return on ordinary
activities after tax
for the financial year
attributable to equity
shareholders 3,038 22,238 25,276 2,248 (5,159) (2,911)
Dividends in respect
of equity shares (2,817) - (2,817) (2,723) - (2,723)
Cancellation of warrants - (660) (660) - (272) (272)
Transfer to reserves
after aggregate dividends
paid and proposed of 7.35p
per share (1998-7.15p
per share) 221 21,578 21,799 (475) (5,431) (5,906)
Return per ordinary share:
Basic 7.94p 58.15p 66.09p 5.95p (13.67)p (7.72)p
Diluted** 7.75p 56.71p 64.46p 5.76p (13.21)p (7.45)p
*The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.
**The diluted return per ordinary share for September 1998 has been restated
under Financial Reporting Statement 14.
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