Interim Results - NAV Up 10.7%
IVORY & SIME UK SMALLER COMPANIES TRUST PLC
29 October 1999
INTERIM RESULTS
Investment Objective
Ivory & Sime UK Smaller Companies Trust aims to achieve capital growth by
investing in a portfolio of smaller companies quoted on the London Stock
Exchange.
Interim results for the six months ended 30 September 1999
* Strong recovery in shares of smaller companies.
* Valuation of smaller companies still highly attractive.
* Gearing facilities extended to take advantage of buying opportunities.
Results
Over the six months to 30 September 1999, the fully-diluted net asset value
increased by 10.7% compared with an increase of 11.9% in the FTSE SmallCap (ex
Investment Trusts) Index over the same period.
A further 60,000 warrants were bought in for cancellation which reduces the
potential dilution to net asset value and to future earnings.
Earnings and Dividends
Group earnings per share were 3.30 pence per ordinary share in respect of the
six months ended 30 September 1999 (1998 - 2.50 pence). The Board has
declared an unchanged interim dividend of 1.00 pence per ordinary share
payable on 6 January 2000 to shareholders on the register on 4 December 1999.
Borrowings
A £7 million five year fixed rate sterling loan was negotiated to replace the
£6 million loan which matured and was repaid in August 1999. To provide
additional flexibility the Company also added a revolving credit facility of
up to £5 million which will be employed strategically as opportunities present
themselves.
Outlook
The immediate issue is to what extent the recent interest rate rise will
impact on sentiment towards smaller companies and their financial performance.
The increase is likely to prove a pre-emptive strike, reflecting the
underlying strength of the economy, rather than a precursor to significant
upward movement in rates. Sentiment is unlikely to be damaged by the interest
rate moves alone. Whilst the disruption associated with Year 2000 issues
could prove to be a source of short-term irritation for some companies, it
does not undermine the fundamental long-term attractions of most, including,
we believe, those in which we are invested. There are sufficient attractive
business opportunities coupled with modestly priced equity to justify the
Company adopting a fully invested stance.
For further information contact:
Stephen Grant/Keith Hannay
Friends Ivory & Sime plc : tel. 0131 465 1000
Group Statement Of Total Return (Unaudited)
(Incorporating the Revenue Account)
For the Six Months Ended 30 September 1999
Six Months ended
30 September 1999
PDS'000 PDS'000 PDS'000
Revenue Capital Total
Realised gains/(losses) on sales - 2,325 2,325
Unrealised gains/(losses) - 2,216 2,216
______ ______ ______
Total capital gains/(losses) on investments - 4,541 4,541
Warrants purchased for cancellation - (63) (63)
Income 1,116 - 1,116
Investment management fee (70) (131) (201)
Other expenses (131) - (131)
Realised exchange differences - 3 3
______ ______ ______
Return before finance costs and taxation 915 4,350 5,265
______ ______ ______
Interest payable (98) (183) (281)
______ ______ ______
Return on ordinary activities before tax 817 4,167 4,984
______ ______ ______
Tax on ordinary activities (122) 24 (98)
______ ______ ______
Return available to equity shareholders 695 4,191 4,886
Dividends in respect of equity shares (211) - (211)
______ ______ ______
Transfer to/(from) reserves 484 4,191 4,675
______ ______ ______
Return per ordinary 50p share:
Basic 3.30 19.91 23.21
Diluted (FRS 14) 3.23 19.46 22.69
Group Statement Of Total Return (Unaudited)
(Incorporating the Revenue Account)
For the Six Months Ended 30 September 1998
Six Months ended
30 September 1998
PDS'000 PDS'000 PDS'000
Revenue Capital Total
Realised gains/(losses) on sales - 3,714 3,714
Unrealised gains/(losses) - (13,596) (13,596)
______ ______ ______
Total capital gains/(losses) on investments - (9,882) (9,882)
Warrants purchased for cancellation - (1,044) (1,044)
Income 999 - 999
Investment management fee (71) (133) (204)
Other expenses (112) - (112)
Realised exchange differences - 2 2
______ ______ ______
Return before finance costs and taxation 816 (11,057) (10,241)
______ ______ ______
Interest payable (97) (180) (277)
______ ______ ______
Return on ordinary activities before tax 719 (11,237) (10,518)
______ ______ ______
Tax on ordinary activities (194) 41 (153)
______ ______ ______
Return available to equity shareholders 525 (11,196) (10,671)
Dividends in respect of equity shares (210) - (210)
______ ______ ______
Transfer to/(from) reserves 315 (11,196) (10,881)
______ ______ ______
Return per ordinary 50p share:
Basic 2.50 (53.23) (50.73)
Diluted (FRS 14) 2.42 (51.69) (49.27)
Group Statement Of Total Return
(Incorporating the Revenue Account)
For the Year Ended 31 March 1999
Year Ended
31 March 1999
PDS'000 PDS'000 PDS'000
Revenue Capital Total
Realised gains/(losses) on sales - 6,008 6,008
Unrealised gains/(losses) - (7,271) (7,271)
______ ______ ______
Total capital gains/(losses) on investments - (1,263) (1,263)
Warrants purchased for cancellation - (1,044) (1,044)
Income 1,638 - 1,638
Investment management fee (200) (279) (479)
Other expenses (149) - (149)
Realised exchange differences - 3 3
______ ______ ______
Return before finance costs and taxation 1,289 (2,583) (1,294)
Interest payable (193) (360) (553)
______ ______ ______
Return on ordinary activities before tax 1,096 (2,943) (1,847)
Tax on ordinary activities (306) 77 (229)
______ ______ ______
Return attributable to equity shareholders 790 (2,866) (2,076)
Dividends in respect of equity shares (736) - (736)
______ ______ ______
Transfer to reserves 54 (2,866) (2,812)
______ ______ ______
Return per ordinary 50p share:
Basic 3.76 (13.62) (9.86)
Diluted (FRS 14) 3.67 (13.33) (9.66)
Group Balance Sheet (Unaudited)
As at As at
30.9.99 31.3.99
PDS'000 PDS'000
Fixed Assets
Investments 52,630 44,320
Net current assets/(liabilities) 2,336 (1,053)
--------- ---------
54,966 43,267
Borrowings (7,000) -
--------- ---------
47,966 43,267
--------- ---------
Financed by
Shareholders' funds 47,966 43,267
Net asset value per ordinary share
- Undiluted 227.67p 205.60p
- Fully-diluted 221.67p 200.17p
- Diluted (FRS 14) 222.74p 201.44p
Notes
1. The unaudited interim results have been prepared on the basis of the
accounting policies set out in the statutory accounts of the Group for the
year ended 31 March 1999.
2. Earnings for the first six months should not be taken as a guide to the
results of the full year.
3. Basic earnings per ordinary share are based on a weighted average of
21,052,251 ordinary shares in issue during the period (1998 - 21,031,335).
The diluted earnings per ordinary share which is calculated in accordance
with Financial Reporting Standard 14 (Earnings per share) is 3.23p (1998:
2.42p). This is based on return attributable to equity shareholders and on
21,535,440 (1998: 21,659,451) ordinary shares, being the weighted average
number of ordinary shares in issue during the period plus the number of
ordinary shares that would have been issued for no consideration using a
weighted average share price of 172.0p (1998: 161.7p).
4 The interim dividend of 1.00 pence per ordinary share will be paid on 6
January 2000 to shareholders on the Register on 4 December 1999.
5. There were 21,067,815 ordinary shares in issue at 30 September 1999 (31
March 1999 - 21,044,469). 23,346 ordinary shares were issued in respect
of warrants which were exercised on 31 July 1999. The Company bought in
for cancellation 60,000 warrants for a consideration of £63,000 during the
period. The diluted net asset value per ordinary share which is calculated
in accordance with FRS 14 (Earnings per share) 222.74p (31 March 1999:
201.44p). This is based on net assets and on 21,534,788 (31 March 1999:
21,478,932) ordinary shares, being the number of ordinary shares in issue
at 30 September 1999 plus the notional number of shares that would have
been issued for no consideration using a period end share price of 177.25p
(31 March 1999: 157.00p).
6. The group results consolidate those of I&S UK Securities Limited, a wholly
owned subsidiary which deals in securities.
7. These are not full statutory accounts in terms of Section 240 of the
Companies Act 1985 and are unaudited. Statutory accounts for the year to
31 March 1999, which were unqualified, have been lodged with the Registrar
of Companies. No statutory accounts in respect of any period after 31
March 1999 have been reported on by the Company's auditors or delivered to
the Registrar of Companies. A full interim report will be sent to
shareholders in November 1999 and will be available for inspection at One
Charlotte Square, Edinburgh, the registered office of the Company.
Managed by Friends Ivory & Sime plc
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