Preliminary Annual Results
Aberdeen Asian Smaller Co's Inv Tst
3 October 2001
ABERDEEN ASIAN SMALLER COMPANIES INVESTMENT TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
for the year ended 31 July 2001
Chairman's Statement
In the past twelve months, we have seen an abrupt deterioration in global
growth. Asian economies have suffered and markets everywhere have been in
retreat. Against this backdrop, the Company's undiluted net asset value per
share fell just 8.2% to 118.83p as at 31st July 2001. This compares with a
24.3% plunge in the MSCI AC Asia Pacific ex-Japan over the same period. The
relative resilience of your Company's net asset value is testimony both to the
quality and the attractive valuation of the underlying investments.
The Board is recommending payment of a dividend of 2.00p per Ordinary share,
against 1.22p last year.
Outwardly, Asia's recent export-led reliance on the US has been rudely
exposed, with growth rates stagnating. Yet the reaction in the region's stock
markets has been an orderly decline. In part, this is because influential
investors had already voted with their feet, preferring only the fashionable
large cap stocks. Yet this closet benchmarking, like the obsession with
growth, may have peaked with the market.
For our managers, good investment opportunities have been evident for some
time. Value in small caps has been less hidden than neglected. As a result
there has been no reason to change strategy. Portfolio activity has been an
almost mundane matter of topping up in well-managed stocks and re-visiting
ones that were earlier trading at prohibitive levels. A pick-up in takeovers
and buybacks has also facilitated the recycling of funds. The experience of
the investment team, now with seven managers, has counted too.
One point to note is the portfolio's exposure primarily to domestic oriented
companies. These should continue to perform despite a deteriorating
environment. We have been encouraged that, on a political level, complacency
toward corporate reform that has prevailed since the debt crisis of 1997-98
has been replaced with a new sense of urgency. Governments appear to accept
that export growth no longer provides cover for inaction, and the next phase
of growth will have to be domestically driven. This recognition coincides with
the emergence of a new generation of politicians. So far their words have been
positive -- it just remains to be seen whether their deeds live up to
expectations.
Following the recent tragic events in the US, it is unlikely that Asia will
return to favour in the short term. An increase in risk aversion and
heightened recession fears will affect absolute and relative performance.
However, we have been here before. Asia, as a core emerging market region, has
led recovery in previous cycles. We would be surprised if it were not to do so
again. This is less a market call than an observation on price. Stocks were
already at near-'97 crisis levels prior to the events in the US. Today, many
companies are trading close to book or cash on balance sheet. Our focus on
these fundamentals should pay off in a period of unclear earnings' visibility.
Certainly Asian smaller companies offer compelling value for the patient
investor.
Nigel Cayzer
Chairman
3 October 2001
The unaudited results were:
Statement of Total Return (incorporating the Revenue Account*)
Year ended
31 July 2001
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Losses on investments - (4,021) (4,021)
Income 1,673 - 1,673
Investment management fee (445) - (445)
Other expenses (243) - (243)
Exchange gains - 38 38
________ ________ ________
Net return/(loss) before finance costs and
taxation 985 (3,983) (2,998)
Interest payable and similar charges (153) - (153)
________ ________ ________
Return/(loss) on ordinary activities before
taxation 832 (3,983) (3,151)
Tax on ordinary activities (287) - (287)
________ ________ ________
Return/(loss) on ordinary activities after
taxation 545 (3,983) (3,438)
Dividends in respect of equity shares (535) - (535)
________ ________ ________
Transfer to/(from) reserves 10 (3,983) (3,973)
======== ======== ========
Return/(loss) per Ordinary share (pence):
Basic 1.84 (13.43) (11.59)
======== ======== ========
Year ended
31 July 2000
(audited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 10,188 10,188
Income 1,334 - 1,334
Investment management fee (340) - (340)
Other expenses (296) - (296)
Exchange losses - (103) (103)
________ ________ ________
Net return before finance costs and
taxation 698 10,085 10,783
Interest payable and similar charges (145) - (145)
________ ________ ________
Return on ordinary activities before
taxation 553 10,085 10,638
Tax on ordinary activities (189) - (189)
________ ________ ________
Return on ordinary activities after
taxation 364 10,085 10,449
Dividends in respect of equity shares (363) - (363)
________ ________ ________
Transfer to reserves 1 10,085 10,086
======== ======== ========
Return per Ordinary share (pence):
Basic 1.12 31.08 32.20
======== ======== ========
* The revenue column of this statement is the revenue account of the Company.
The Statements of Total Return presented above are in accordance with the
Statement of Recommended Practice for Financial Statements of Investment Trust
Companies.
Balance Sheet
As at As at
31 July 31 July
2001 2000
(unaudited) (audited)
£'000 £'000
Fixed assets
Investments 33,994 38,693
________ ________
Current assets
Debtors 258 160
Cash at bank and in hand 797 1,010
________ ________
1,055 1,170
Creditors: amounts falling due within one year (3,232) (1,321)
________ ________
Net current liabilities (2,177) (151)
________ ________
Total assets less current liabilities 31,817 38,542
Provisions for liabilities and charges (26) (22)
________ ________
Total net assets 31,791 38,520
======== ========
Capital and reserves
Called-up share capital 6,689 7,439
Capital redemption reserve 2,062 1,312
Special reserve 14,990 17,746
Other capital reserves:
Warrant reserve 2,275 2,275
Capital reserve - realised 6,556 4,837
Capital reserve - unrealised (1,031) 4,671
Revenue reserve 250 240
________ ________
Total equity shareholders' funds 31,791 38,520
======== ========
Net asset value per Ordinary share (pence):
Basic 118.83 129.46
======== ========
Fully-diluted 114.92 123.85
======== ========
Cash Flow Statement
Year ended Year ended
31 July 2001 31 July 2000
(unaudited) (audited)
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 757 590
Servicing of finance
Interest paid (154) (149)
________ ________
Net cash outflow from servicing of finance (154) (149)
Taxation
Net taxation (paid)/recovered (12) 344
Financial investment
Purchase of investments (8,238) (10,519)
Sale of investments 8,962 15,660
________ ________
Net cash inflow from financial investment 724 5,141
Equity dividends paid (363) (93)
________ ________
Net cash inflow before financing 952 5,833
Financing
Repurchase of Ordinary shares (453) (5,195)
Expenses paid in respect of share buybacks - (153)
Repayment of loans (750) (1,000)
________ ________
Net cash outflow from financing (1,203) (6,348)
________ ________
Decrease in cash (251) (515)
======== ========
Reconciliation of net cash
flow to movements in net funds/(debt)
Decrease in cash as above (251) (515)
Cash outflow from repayment of loan 750 1,000
Exchange movements 38 (118)
________ ________
Movement in net funds in the year 537 367
Opening net funds/(debt) 260 (107)
________ ________
Closing net funds 797 260
======== ========
Notes:-
1 The basic capital return per Ordinary share is based on net capital losses
for the financial year of £3,983,000 (2000 - gains of £10,085,000) and on
29,669,197 (2000 - 32,453,641) Ordinary shares, being the weighted average
number of Ordinary shares in issue during the year.
2 The basic revenue return per Ordinary share is based on net revenue on
ordinary activities after taxation of £545,000 (2000 - £364,000) and on
29,669,197 (2000 - 32,453,641) Ordinary shares, being the weighted average
number of Ordinary shares in issue during the year.
3 2001 2000
£'000 £'000
Income from investments
Franked investment income 71 -
Overseas dividends 1,568 1,230
_______ _______
1,639 1,230
_______ _______
Other income
Deposit interest 34 104
_______ _______
1,673 1,334
======= =======
4 The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 July 2001 or 2000. The financial
information for 2000 is derived from the statutory accounts for 2000 which
have been delivered to the Registrar of Companies. The auditors have reported
on the 2000 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 2001 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 in due course.
5 During the financial year 3,000,000 Ordinary shares were bought back for
cancellation at a cost of £2,756,000.
6 The Board has declared a final dividend in respect of the year ended 31
July 2001 of 2.00p net per share (2000: 1.22p). The final dividend will have a
record date of 12 October 2001 and, if approved by shareholders, will be paid
on 30 November 2001 to holders of Ordinary shares on the register on the
record date.
7 Copies of the Annual Report will be posted to shareholders shortly and
further copies may be obtained from the registered office, One Bow Churchyard,
Cheapside, London EC4M 9HH.
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