Results - NAV Up 37%
British Empire Sec & Gen Tst PLC
11 November 1999
UNAUDITED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 1999
* Net asset value rose by 37% compared to rises in the benchmark Datastream
Index, the MSCI World Index and the FTSE All Share Index of 28%, 32% and 21%
respectively.
* The share price rose 48% over the year.
* The final dividend is 0.88p per share giving an increase for the full year
of 1.8%.
* Net assets increased to £298 million, over a 50 fold growth since 1984.
* The major highlight of the year was the sale of our 6.8% holding in the
Lazard company, Rue Imperiale de Lyon, for £45.9 million realising a profit of
£25.6 million.
* Geographical allocation paid off following a build up in Far East exposure
in 1998 with significant realised profits in Japanese investment trusts - BG
Japan (£6 million) and Fidelity Japan OTC (£4 million).
* The Company seeks to work with its investee companies to enhance shareholder
value. A number of corporate transactions boosted the value of our investment
trust holdings.
* Following realisations, cash and equivalents has increased to £93.9 million
or 28% of total assets. In uneasy markets this gives flexibility to pursue
our policy of buying quality assets at a significant discount to underlying
value.
* The Company continues to use its buy back powers adding value for
shareholders.
William Fossick, Chairman, said:
'It was a good year for the Company with an increase of 48% in the share
price. The Board's decision to stick to its distinctive value policy was
vindicated as a number of depressed stocks and markets recovered'.
John Walton, Managing Director of Ivory & Sime Asset Management Ltd, said:
'An exciting year with substantial gains from our biggest holding in Rue
Imperiale de Lyon and from the purchase of depressed Japanese investments in
1998. We have substantial cash resources which give flexibility to accumulate
holdings in special situations selling on substantial discounts and we intend
to remain pro-active in pursuit of shareholder value'.
The Group's Statement of Total Return and Balance Sheet (unaudited) follow:
British Empire Securities and General Trust p.l.c.
Statement of total return (incorporating the revenue account) of the Group
Year to 30 September 1999
Revenue Capital Total
£'000 £'000 £'000
Gains/(losses) on investments - 81,343 81,343
Realised exchange differences - (506) (506)
(Depreciation)/appreciation of Loan Stock - (2,223) (2,223)
Amortisation of debenture issue expenses - (7) (7)
Income 6,962 3,499 10,461
Investment management fee (incl. VAT) (1,172) (878) (2,050)
Other expenses (net of VAT recovered) (477) - (477)
Net return before finance 5,313 81,228 86,541
costs and taxation
Interest payable (2,812) - (2,812)
Return on ordinary activities 2,501 81,228 83,729
before tax
Tax on ordinary activities (463) 65 (398)
Return attributable to 2,038 81,293 83,331
equity shareholders
Dividends in respect of equity shares (2,119) - (2,119)
Transfer (from)/to reserves (81) 81,293 81,212
Return per ordinary share 1.08p 42.99p 44.07p
(Based on 189,114,267 (1998: 189,355,089) weighted average number of shares
in issue during the year)
British Empire Securities and General Trust p.l.c.
Unaudited Statement of total return (incorporating the revenue account) of the
Group
Year to 30 September 1998
Revenue Capital Total
£'000 £'000 £'000
Gains/(losses) on investments - (39,490) (39,490)
Realised exchange differences - 361 361
(Depreciation)/appreciation of Loan Stock - 500 500
Amortisation of debenture issue expenses - (7) (7)
Income 9,338 1,872 11,210
Investment management fee (incl. VAT) (1,348) (337) (1,685)
Other expenses (net of VAT recovered) (308) - (308)
Net return before finance 7,682 (37,101) (29,419)
costs and taxation
Interest payable (2,853) - (2,853)
Return on ordinary activities 4,829 (37,101) (32,272)
before tax
Tax on ordinary activities (1,287) (476) (1,763)
Return attributable to 3,542 (37,577) (34,035)
equity shareholders
Dividends in respect of equity shares (2,102) - (2,102)
Transfer (from)/to reserves 1,440 (37,577) (36,137)
Return per ordinary share 1.87p (19.84p) (17.97p)
British Empire Securities and General Trust p.l.c.
Unaudited Group Balance Sheet
As at As at
30 September 30 September
1999 1998
£'000 £'000
Investments 250,985 226,068
Freehold investment properties 7,300 6,900
Net current assets 79,626 25,555
_______ _______
Total assets less current liabilities 337,911 258,523
Financed by :
Equities index unsecured loan stock 2013 12,233 10,939
10.375 per cent debenture stock 2011 11,883 11,883
8.125 per cent debenture stock 2023 14,829 14,822
Provision for liabilities and charges 565 527
Ordinary Shareholders' funds 298,401 220,352
_______ _______
337,911 258,523
Net Asset Value per ordinary share 159.53p 116.37p
Number of shares in issue 187,055,089 (1998: 189,355,089)
British Empire Securities and General Trust p.l.c.
Notes:
1. During the year, 2,300,000 ordinary shares were bought back by the Company
for cancellation, at an average price of 136.6p. The nominal value of the
shares bought back has been transferred to a Capital Redemption Reserve. The
Company now has 187,055,089 ordinary shares in issue.
To allow the Company to buy back its own shares, it ceased to be an
investment company during the year. However, the financial statements
continue to adopt the format recommended by the Statement of Best Practice for
investments trusts.
2. The Company bought in for cancellation 336,578 units of Equities Index
Unsecured Loan Stock during the year at prices between 256p and 303p. The
Company now has 4,328,530 units in issue.
3. The Group suffered United Kingdom taxation of £396,000 (1998 - £1,762,000)
and overseas taxation of £2,000 (1998 - £1,000). On 6 April 1999 the tax
credits attached to the franked investment income reduced from 20% to 10%.
4. The final dividend of 0.88p per share will be paid on 10 January 2000 to
Ordinary Shareholders on the Register on 26 November 1999.
5. The performance element of the management fee (deemed to be the amount
payable at a fee rate in excess of 0.4% of assets) is charged wholly to the
capital reserve on the basis that it derives directly from the capital
performance of the Group relative to the Benchmark Index. Comparative figures
have been restated accordingly.
6. These are not full statutory accounts in terms of section 240 of the
Companies Act 1985. The full audited accounts for the year to 30 September
1998, which were unqualified, have been lodged with the Registrar of
Companies. The annual report will be sent to shareholders in November 1999 and
will be available for inspection at the registered office of the Company, 7
Princes Street , London EC2R 8AQ.
7. The Annual General Meeting will be held at Saddlers' Hall, Gutter Lane,
Cheapside, London on 16 December 1999 at 12 noon.
For further information, please contact:
William Fossick
Chairman, British Empire Securities and General Trust p.l.c.
Tel: 0171 853 6900
John Walton
Managing Director, Ivory & Sime Asset Management
Tel: 0171 853 6900
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