Final Results- Significant Performance Improvement
SCOTTISH ORIENTAL SMALLER COMPANIES TRUST PLC
21 October 1999
Preliminary Results for the year ended 31st August 1999
(Extracted from the Audited Accounts)
The Board of The Scottish Oriental Smaller Companies Trust PLC is pleased
to announce the results for the year ended 31st August 1999.
These results are presented in a format which summarises the information
which will be given in the forthcoming Annual Report and Accounts.
Summary Statement of Total Return for the year ended 31st August 1999
1999 1998
£'000 £'000 £'000 £'000
Dividends 709 701
Other income 16 45
725 746
Expenses (372) (324)
Income before tax 353 422
Tax (78) (103)
Income attributable to 275 319
shareholders
Dividend (216) (216)
Transferred to Revenue Reserve 59 103
Return attributable to
shareholders:
Income 275 319
Capital 12,972 (15,713)
Total 13,247 (15,394)
Total return per share - 52.02p (60.45p)
undiluted
Income return per share - 1.08p 1.25p
undiluted
Dividend per share (net) 0.85p 0.85p
Summary Balance Sheet as at 31st August 1999
1999 1998
£'000 £'000 £'000 £'000
Total investments 26,789 10,787
Debtors 213 205
Cash 939 943
Creditors (413) (273)
Net current assets 739 875
27,528 11,662
Foreign currency loan (2,836) -
Provision for deferred tax (33) (34)
Shareholders' funds 24,659 11,628
Net asset value per share - 96.83p 45.66p
undiluted
Summary Cash Flow Statement for the year ended 31st August 1999
1999 1998
£'000 £'000
Net cash inflow from operating 426 423
activities
Interest paid on borrowings (13) -
Taxation (106) (106)
Net cash outflow for capital
expenditure and financial investment (2,713) (432)
Equity dividend paid (216) (171)
Net cash outflow before financing (2,622) (286)
Financing 2,618 -
Decrease in cash (4) (286)
Reconciliation of Total Income to Net Cash Inflow from Operating Activities
1999 1998
£'000 £'000
Income 725 746
Expenses (359) (324)
Decrease in debtors 26 24
Increase/(decrease) in creditors 34 (23)
Net cash inflow from operating 426 423
activities
BOARD STATEMENT
Investment Performance
There has been a significant improvement in the performance of the Trust
during the year ending 31st August 1999. A turnaround in the economic
outlook for Asia resulted in a substantial appreciation of the
stockmarkets over the period. Although underperforming their larger
counterparts, smaller companies participated in the recovery as low interest
rates made bank deposits a less attractive alternative for local investors. A
more positive perception towards the Region has also been evidenced by the
decline in the Trust's discount to net asset value.
Scottish Oriental's undiluted net asset value appreciated 112.1 per cent
to 96.83p, more than doubling over the twelve-month period. This compares with
a sterling adjusted increase of 69.9 per cent in the SG Asian Smaller
Companies Index (the Trust's new benchmark) and a 118.3 per cent rise in the
MSCI AC Asia Free (ex Japan) Index. The FT-SE-A All-Share Index rose 20.4 per
cent in the year.
Ordinary Share Buy-Backs
The Board had previously intended to seek shareholders' authority at the AGM
to repurchase a limited number of ordinary shares from the market. However,
it has today been decided that this would not be an appropriate measure as
the Company has limited revenue reserves for this purpose and the Board
considers that the costs involved in seeking such authority would outweigh any
benefits to shareholders.
Gearing
During the course of the year, Scottish Oriental borrowed £2.6 million in
yen, which currently represents 12 per cent of net assets. This gearing gives
the Trust greater flexibility to enhance long-term returns.
Summary Data at 31st August 1999
Shares in issue 25,466,250 Shareholders' Funds £24.66m
Warrants in issue 4,747,400 Market Capitalisation £19.35m
Net Asset Value per
share
Undiluted 96.83p Warrant Price 23.50p
Share Price 76.00p Package Price 80.70p
Package equates to one
share and one-fifth of a
warrant
Share Discount to Package Discount to Net
Net Asset Value Asset Value
Undiluted 21.5% Undiluted 16.7%
Performance for the year ended 31st August 1999
Net Asset Value +112.1% Warrant Price +129.3%
(undiluted)
Share Price +145.2% Package Price +144.2%
SG Asian (ex Japan) +69.9% MSCI AC Asia Free (ex +118.3%
Smaller Companies Japan) Index (£)
Index (£)
FT-SE-A All-Share Index +20.4%
Outlook
Since reaching their nadir in August 1998, Asian stockmarkets have
achieved outstanding returns. Although a similar performance is unlikely in the
short- term, the long-term outlook for the Region remains positive.
As Asia emerges from the crisis, opportunities abound for well-managed
and soundly financed companies to strengthen their market position.
Whilst portfolio flows into the Region may initially favour the larger
companies, their smaller counterparts should also benefit given their above
average growth prospects and attractive valuations.
Dividend
An unchanged final dividend of 0.85p per share (equivalent to 0.94p per
share gross) for the year ended 31st August 1999 is recommended to be paid on
21st January 2000 to shareholders registered on 17th December 1999. The
Directors would remind shareholders that the principal objective of the Trust
is capital growth and the dividend payout could consequently fluctuate from year
to year.
Enquiries: Angus Tulloch, Susie Rippingall or Michael Tulloch
Stewart Ivory & Company Limited
Tel: 0131 226 3271
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