Final Results

RIT Capital Partners PLC 26 May 2005 26 May 2005 PRELIMINARY ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2005 The following is derived from the Chairman's Statement which will appear in the annual report and accounts. In the year to 31 March 2005, your Company's net asset value per share increased by 14.2%, from 621.8p to 710.2p and its net worth by some £134m. Over the same period, the Morgan Stanley Capital International Index (in Sterling), the FTSE All-Share Index and the Investment Trust Net Assets Index increased by 5.7%, 11.9% and 11.6% respectively. We were therefore able to out-perform these three indices in conditions which were significantly more difficult than in the previous year, when your Company's net asset value per share increased by 44.5%. RITCP's net asset value per share at 20 May, the latest available date, was 704.4p. ASSET ALLOCATION Set out below is our asset allocation at the year end. % of % of Portfolio at Portfolio at 31 March 31 March 2005 2004 ------------ ------------ Quoted investments 56.3 50.8 Government securities and 10.0 4.8 money market funds Hedge funds 6.6 10.0 Long equity funds 6.2 4.8 Unquoted investments 12.3 21.6 Private equity partnerships 6.3 5.6 Property 2.3 2.4 ----------- ------------ 100.0 100.0 ----------- ------------ The principal change over the year has been the decrease in the unquoted investments section of the portfolio, as a result of the successful realisation of a number of our holdings, including the investment in Shinsei Bank. In addition, the quoted investments category has shown some increase, while the rise in the level of liquidity to 10% reflects our more cautious stance. QUOTED PORTFOLIO In view of the uncertainties prevailing in world markets, we have continued to diversify the portfolio into specific areas and away from general exposure to markets. Particularly during the early part of the year, we were investors in commodity and energy stocks, which benefited from China's growth and the pressures for a decline in the US Dollar. In addition, we have maintained a level of liquidity within the portfolio. At the year end, our holdings in government securities and money market funds amounted to 10%, compared with 5% at 31 March 2004. Against our $150 million loan, we have retained net cash amounting to some £63 million. At the year end, £635 million, or 56.3% of the portfolio, was held directly in quoted investments, compared with 50.8% at the previous year end. Some £390 million, or nearly two thirds, of this amount is managed by external investment managers. The balance of £245 million is managed internally. We have added to the geographical diversity of the portfolio over the last two years, increasing our asset allocation to Japan and the Far Eastern markets. We have also continued to diversify the currency exposure away from the US Dollar and the Euro to include the currencies of the leading Asian economies. In terms of the geographical exposure, the increase in Europe from 15.4% to 22.8% has been partly attributable to increased holdings in European government bonds. The halving of our exposure to Japan from 13% to 7.8% has mainly come about as a result of the sale of our holding in Shinsei Bank. UNQUOTED PORTFOLIO The sale of the Shinsei holding was the largest of a number of successful realisations that we completed during the year under review. We realised a profit of £68 million, or 3.3 times our original cost, over the life of the investment. Other profitable realisations included the sale of a leading multiplex cinema company, Cine-UK, in October 2004 at 3.4 times the original cost, giving a total return of £18.3 million. At the year end, we increased the valuation of our holding in Power Measurement, a North American electronics company, to £29.1 million, or 4 times its original cost, following the announcement of the sale of the company. In March 2005, Seminis, a global seed producer, was sold to realise £13.3 million, or 3.2 times our original cost and a profit of £9 million. In addition, during the first half of the year, two of our unquoted investments, PayPoint, an electronics payments systems business, and Blueheath, a web-based grocery wholesale business were successfully floated. Our exposure to unquoted investments and private equity partnerships amounted to £209.9 million, or 18.6% of the portfolio at the year end. Of this, £138.5 million, or 12.3%, represents investments made directly by our management and £71.4 million, or 6.3%, is invested in limited partnerships managed by third parties. DIVIDEND We are proposing to pay a dividend of 3.1p per share on 20 July 2005 to shareholders on the register at 17 June 2005, the same level of dividend as last year. The focus of your Company is to achieve capital growth rather than increases in dividend income. OUTLOOK The outlook for world markets is an unusually complex one. In 2003 and 2004 stock market values increased, reflecting economic growth, significant increases in corporate earnings and low levels of inflation. Today there is, on the one hand, some evidence of accelerating inflation but, on the other, there are some concerns about a slowdown in economic activity which could affect corporate profitability. Conventional wisdom tells us that the USA's massive trade deficit, unless moderated, will sooner or later lead to monetary crisis. The problem is a circular one, as the reduction in consumption required to solve it would depress the global economy at a time when increasing levels of unemployment and lack of growth are already evident, particularly in Europe. It is politically expedient, therefore, for the USA and the Far Eastern surplus countries to allow these imbalances to continue and to hope that the problems will somehow go away. We are living in uncharted waters and none of us can forecast the outcome with accuracy, particularly as regards timing. Meanwhile, equity valuations on conventional criteria remain reasonable and the opportunities for stock selection and special situations are there to find. Nevertheless, we have sought to reduce the level of risk by taking profits, increasing liquidity and continuing to diversify the portfolio. This has been achieved not only by a widely spread, global equity portfolio, but also through the diversification of currency exposure and a broad allocation over a number of asset classes, both quoted and unquoted. Further diversification is achieved by our policy of allocating part of the portfolio to exceptional managers, in order to give shareholders access to the best external talent available. Currently some 58% of the portfolio is managed in this way. Unquestionably, conditions for investing have become more difficult, as levels of risk and uncertainty have increased in recent months. We shall continue to pursue new investment ideas and themes and to seek outstanding investment managers to improve and diversify your Company's portfolio. This policy has served shareholders well in the past and we believe that, in these uncertain times, it is the most likely way of doing so in the future. Rothschild 26 May 2005 CONSOLIDATED STATEMENT OF TOTAL RETURN (incorporating the revenue account) For the year ended 31 March 2005 Revenue Capital Total £'000 £'000 £'000 --------- --------- -------- Gains on investments - 147,841 147,841 Dealing losses (12,638) - (12,638) Investment income 20,838 - 20,838 Other income 350 - 350 Administrative expenses (6,703) - (6,703) Investment management fees (4,860) (5,347) (10,207) Other capital items - 4,836 4,836 --------- --------- -------- Net (loss)/return before finance costs and taxation (3,013) 147,330 144,317 Interest payable and similar charges (3,285) - (3,285) Other finance income 26 - 26 --------- --------- -------- (Loss)/return on ordinary activities before taxation (6,272) 147,330 141,058 Taxation on ordinary activities 858 1,193 2,051 --------- --------- -------- (Loss)/return on ordinary activities after taxation attributable to equity shareholders (5,414) 148,523 143,109 Dividend (4,842) - (4,842) --------- --------- -------- Transfer (from)/to reserves (10,256) 148,523 138,267 (Loss)/return per ordinary share (3.5p) 95.0p 91.5p --------- --------- -------- Net asset value per ordinary share 710.2p -------- The revenue column of this statement is the consolidated profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the year ended 31 March 2005 £'000 ---------- Return on ordinary activities after taxation 143,109 Actuarial gain on pension scheme 558 Movement on deferred tax relating to actuarial gain (1,232) Exchange movements arising on consolidation (52) ---------- Total recognised gains and losses 142,383 ---------- CONSOLIDATED STATEMENT OF TOTAL RETURN (incorporating the revenue account) Restated for the year ended 31 March 2004 Revenue Capital Total £'000 £'000 £'000 --------- --------- -------- Gains on investments - 292,697 292,697 Dealing losses (7,205) - (7,205) Investment income 17,078 - 17,078 Other income 406 - 406 Administrative expenses (6,410) - (6,410) Investment management fees (3,893) (2,366) (6,259) Other capital items - 19,494 19,494 --------- --------- -------- Net (loss)/return before finance costs and taxation (24) 309,825 309,801 Interest payable and similar charges (2,527) - (2,527) Other finance costs (196) - (196) --------- --------- -------- (Loss)/return on ordinary activities before taxation (2,747) 309,825 307,078 Taxation on ordinary activities (527) 671 144 --------- --------- -------- (Loss)/return on ordinary activities after taxation attributable to equity shareholders (3,274) 310,496 307,222 Dividend (4,862) - (4,862) --------- --------- -------- Transfer (from)/to reserves (8,136) 310,496 302,360 --------- --------- -------- (Loss)/return per ordinary share (2.1p) 198.0p 195.9p Net asset value per ordinary share 621.8p --------- --------- -------- The revenue column of this statement is the consolidated profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Restated for the year ended 31 March 2004 £'000 -------- Return on ordinary activities after taxation 307,222 Actuarial gain on pension scheme 1,616 Movement on deferred tax relating to actuarial gain (524) Exchange movements arising on consolidation 772 --------- Total recognised gains and losses 309,086 --------- CONSOLIDATED BALANCE SHEET 31 March Restated 2005 31 March £'000 2004 £'000 ----------- --------- Fixed assets Investments 1,127,346 978,819 Tangible fixed assets 214 239 ----------- --------- 1,127,560 979,058 ----------- --------- Current assets Debtors 41,622 30,048 Dealing investments - 2,400 Cash at bank 70,416 92,193 ----------- --------- 112,038 124,641 ----------- --------- Creditors: amounts falling due within one year Securities sold short (7,879) (6,080) Creditors and accruals (16,176) (21,905) Proposed dividend (4,842) (4,862) Bank loans and overdrafts (7,829) (1,880) ----------- --------- (36,726) (34,727) ----------- --------- Net current assets 75,312 89,914 ----------- --------- Total assets less current liabilities 1,202,872 1,068,972 ----------- --------- Creditors: amounts falling due after more than one year Bank loans (79,304) (81,516) Provisions for liabilities and charges (14,738) (9,706) ----------- --------- Net assets excluding pension asset/(liability) 1,108,830 977,750 Pension asset/(liability) 514 (2,361) ----------- --------- Net assets including pension asset/(liability) 1,109,344 975,389 ----------- --------- Capital and reserves Called up share capital 156,178 156,848 Capital redemption reserve 33,978 33,308 Capital reserve - realised 757,544 622,869 Capital reserve - unrealised 157,578 147,407 Revenue reserve 3,932 14,914 ----------- --------- Equity shareholders' funds 1,109,210 975,346 Equity minority interests 134 43 ----------- --------- Capital employed 1,109,344 975,389 ----------- --------- CONSOLIDATED CASH FLOW STATEMENT Year ended Year ended 31 March 31 March 2005 2004 £'000 £'000 --------- --------- Cash (outflow)/inflow from operating activities (3,731) 19,412 --------- --------- Servicing of finance Bank and loan interest paid (3,285) (2,546) --------- --------- Net cash outflow from servicing of finance (3,285) (2,546) --------- --------- Taxation UK tax received - 1,613 Overseas tax paid (860) (993) --------- --------- Net cash (outflow)/inflow from taxation (860) 620 --------- --------- Financial investment Purchase of investments (569,539) (495,927) Sale of investments 621,509 439,563 --------- --------- Net cash inflow/(outflow) from financial investment 51,970 (56,364) --------- --------- Capital expenditure Purchase of fixed assets (81) (240) Sale of fixed assets 19 53 ---------- --------- Net cash outflow from capital expenditure (62) (187) --------- --------- Equity dividend paid (4,862) (4,862) --------- --------- Net cash inflow/(outflow) before management of liquid resources and financing 39,170 (43,927) --------- --------- Management of liquid resources Purchase of government securities (418,085) (225,510) Sale of government securities 354,775 290,378 --------- --------- Net cash (outflow)/inflow from management of liquid resources (63,310) 64,868 --------- --------- Financing Buy-back of ordinary shares (3,677) - Increase in term loan - 81,500 Minority interests 91 43 --------- --------- Net cash (outflow)/inflow from financing (3,586) 81,543 --------- --------- (Decrease)/increase in cash in the year (27,726) 102,484 --------- --------- NOTES 1 CHANGE IN ACCOUNTING POLICY The Group has adopted Financial Reporting Standard 17, Retirement Benefits in full during the year. This change has resulted in the restatement of the prior year figures. 2 (LOSS)/RETURN PER ORDINARY SHARE The loss per share for the year ended 31 March 2005 is based on the revenue loss after tax of £5.4 million (31 March 2004: £3.3 million) and the capital return after tax of £148.5 million (31 March 2004: £310.5 million) and the weighted average number of ordinary shares in issue during the year of 156.4 million (31 March 2004: 156.8 million) 3 NET ASSET VALUE PER ORDINARY SHARE The net asset value per share at 31 March 2005 is based on the net assets attributable to ordinary shareholders of £1,109.2 million (31 March 2004: £975.3 million) and the number of ordinary shares in issue at 31 March 2005 of 156.2 million (31 March 2004: 156.8 million). 4 MOVEMENTS IN FIXED ASSET INVESTMENTS Quoted Unquoted Funds and Other Total £'000 and Partnerships securities £'000 property £'000 £'000 £'000 -------- -------- ---------- ---------- --------- Cost at 31 March 2004 404,864 194,480 186,579 47,652 833,575 Appreciation/ (depreciation) at 31 March 2004 92,358 40,641 12,475 (230) 145,244 -------- -------- ---------- ---------- --------- Valuation at 31 March 2004 497,222 235,121 199,054 47,422 978,819 Reclassifications 96,619 (96,619) - - - Additions 474,659 30,175 57,278 418,084 980,196 Disposals (519,286) (28,884) (63,270) (351,765) (963,205) Revaluation 85,533 24,162 22,534 (693) 131,536 -------- -------- ---------- ---------- --------- Valuation at 31 March 2005 634,747 163,955 215,596 113,048 1,127,346 -------- -------- ---------- ---------- --------- Cost at 31 March 2005 493,272 173,500 190,175 113,741 970,688 -------- -------- ---------- ---------- --------- Appreciation/ (depreciation) at 31 March 2005 141,475 (9,545) 25,421 (693) 156,658 -------- -------- ---------- ---------- --------- Investment properties were valued at 31 March 2005 by Jones Lang LaSalle in accordance with the Appraisal and Valuation Manual of the Royal Institution of Chartered Surveyors on the basis of open market value. Funds and partnerships comprise hedge funds, long equity funds and private equity partnerships. Other securities comprise government securities and investments in money market funds. 5 MOVEMENTS IN RESERVES Capital Capital Revenue Redemption Reserve Reserve Reserve £'000 £'000 £'000 ----------- ---------- --------- At 31 March 2004 33,308 770,276 17,038 Prior year adjustment - - (2,124) Retained loss for the year - - (10,256) Capital return for the year - 148,523 - Other movements 670 (3,677) (726) ----------- ---------- --------- At 31 March 2005 33,978 915,122 3,932 ----------- ---------- --------- 6 OTHER CAPITAL ITEMS Other capital items include profits arising on forward currency contracts, exchange movements and movements on provisions. 7 LITIGATION In November 1997 proceedings were issued in the New York Courts against a total of ten defendants, including the Company, by Richbell Information Services Inc. ('RIS') and certain connected entities. The proceedings relate to the Company's investment in H-G Holdings Inc. and a loan made to RIS by the Company's wholly-owned subsidiary, Atlantic and General Investment Trust Limited ('AGIT'). The claim against all of the defendants was for approximately US$240 million. On 15 March 2002 the New York Court dismissed the proceedings in their entirety at their initial stage for failure to state a claim upon which relief could be granted. On 1 April 2002 the plaintiffs filed an appeal against that dismissal. On 23 September 2003 the New York Appellate Court affirmed the dismissal of the proceedings as to thirty causes of action included in the claim and as to AGIT. The New York Appellate Court reinstated three of the causes of action as to seven of the defendants, including the Company, and referred the matter back to the New York Court for further proceedings with respect to those three causes of action. Based upon legal advice received, the Directors do not believe that the proceedings will have a material effect on the financial position of the Company. 8 UNAUDITED STATEMENTS The results for the year ended 31 March 2005 are unaudited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2004 have been delivered to the Registrar of Companies. The auditors have made a report under Section 235 of the Companies Act 1985 on those statutory accounts which was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. 9 ANNUAL REPORT It is intended that the Company's Annual Report and Accounts for the year ended 31 March 2005 will be posted to shareholders on Friday 10 June 2005. Copies of this announcement and the Annual Report will be available to the public at the Company's registered office at 27 St James's Place, London SW1A 1NR. This information is provided by RNS The company news service from the London Stock Exchange BIA

Companies

RIT Capital Partners (RCP)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today