RNS Number:2059R
RIT Capital Partners PLC
23 October 2003
23 October 2003
PRELIMINARY ANNOUNCEMENT FOR THE SIX MONTHS ENDED
30 SEPTEMBER 2003
The following is derived from the Chairman's Statement which will appear in the
interim report.
During the half year to 30 September, your Company's net asset value per share
increased by 17.5%, from 430.2p to 505.6p. Over the same period, the Morgan
Stanley Capital International Index (in Sterling), the FTSE All-Share Index and
the Investment Trust Net Assets Index rose by 15.6%, 16.8% and 20.9%
respectively.
During the difficult market conditions of the previous three years, we
outperformed these indices by some margin, as a result of the liquidity we
maintained during this period and the diversified nature of the portfolio,
particularly into asset classes which are less directly correlated to stock
markets. Since the beginning of the year, we have increased our stock market
exposure significantly, particularly in the Far East and, as a result,
shareholders have participated in the recent rise in stock markets.
The increase in net asset value was attributable largely to the performance of
the "quoted investments" section of the portfolio, which contributed #92 million
towards the total increase in value of #118 million generated for shareholders
over the period. A significant element of the portfolio - some 25% - is held in
unquoted investments where values are likely to mature over a longer cycle.
RITCP's net asset value per share at 20 October was 523.2p - an increase of
21.6% since 31 March.
INVESTMENT PORTFOLIO
During the period under review, we were presented with a relatively brief
opportunity to benefit from historically low interest rates. In July, we
borrowed $150 million at a rate of 3.93% fixed for five years, thereby
increasing the resources available to your Company at a reasonable cost. We
believe that this will allow shareholders to benefit from the increased
opportunities available at this stage in the economic cycle.
During the half year we increased the market exposure of the portfolio,
particularly to Japan and other Far Eastern markets, with a corresponding
reduction in our liquidity. We have realigned our currency exposure, continuing
to hedge against the majority of our US$ exposure, while seeking to diversify
the currency profile of the portfolio. This has contributed to the positive
returns achieved.
We aim to identify investment managers with outstanding expertise in different
asset classes or geographical areas. Shareholders should be aware that some #295
million, or more than two thirds of the quoted portfolio of #418 million, is
managed by fourteen external managers. The spread of investments made by each
manager contributes significantly to the underlying diversity of the portfolio.
At 30 September, #418 million, or 47% of the portfolio, was held directly in
quoted investments, compared with 40% at 31 March. A further #161 million, or
18% of the portfolio was held in funds (including hedge funds) which invest
mainly in quoted securities. Taking these two categories together, some 65% of
the portfolio was invested in quoted or other marketable securities, compared
with 55% at 31 March. The total amount invested in this area has increased by
some #200 million during the period under review.
The overall exposure of your Company to unquoted investments arises either from
investments made directly by RITCP's own management, or from investments in
externally managed partnerships which make private equity investments. In total,
some #224 million, or 25% of the portfolio, was invested in this sector: #170
million, or 19%, by our own management and #54 million, or 6%, through our
investments in limited partnerships managed by third parties. The amounts
invested in this area have increased by some #36 million as a result of new
investments made by our own management during the six month period.
RESULTS
The increase in your Company's net assets over the six months to 30 September
amounted to #118 million, of which #112 was attributable to capital and #6
million to revenue.
In line with our established policy, RITCP will not be paying an interim
dividend.
For further information please contact:
Duncan Budge 020-7514 1928
CONSOLIDATED STATEMENT OF TOTAL RETURN
For the six months ended 30 September 2003
Revenue Capital Total
#'000 #'000 #'000
Gains on investments - 107,143 107,143
Dealing profits 3,438 - 3,438
Investment income:
Dividends and interest 10,055 - 10,055
Income from investment properties 491 - 491
Other income 238 - 238
Administrative expenses (3,302) - (3,302)
Investment management fees (1,720) (962) (2,682)
Other capital items - 6,943 6,943
---------- ---------- ----------
Net return before finance costs
and taxation 9,200 113,124 122,324
Interest payable and similar charges (790) - (790)
---------- ---------- ----------
Return on ordinary activities
before taxation 8,410 113,124 121,534
Taxation on ordinary activities (2,587) (961) (3,548)
---------- ---------- ----------
Return on ordinary activities
after taxation attributable to
equity shareholders 5,823 112,163 117,986
----------- ---------- ----------
Transfer to reserves 5,823 112,163 117,986
========== ========== ==========
Return per ordinary share 3.7p 71.5p 75.2p
The revenue column of this statement is the consolidated profit and loss account
of the Group.
The accompanying notes are an integral part of this statement.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the period.
CONSOLIDATED STATEMENT OF TOTAL RETURN
For the six months ended 30 September 2002
Revenue Capital Total
#'000 #'000 #'000
Losses on investments - (121,720) (121,720)
Dealing profits 165 - 165
Investment income:
Dividends and interest 7,876 - 7,876
Income from investment properties 443 - 443
Other income 160 - 160
Administrative expenses (3,101) - (3,101)
Investment management fees (1,665) 3 (1,662)
Other capital items - 26,942 26,942
--------- --------- ---------
Net return/(loss) before finance costs
and taxation 3,878 (94,775) (90,897)
Interest payable and similar charges (103) - (103)
--------- ------------ ---------
Return/(loss) on ordinary activities
before taxation 3,775 (94,775) (91,000)
Taxation on ordinary activities (1,137) 1,583 446
--------- --------- ---------
Return/(loss) on ordinary activities
after taxation attributable to
equity shareholders 2,638 (93,192) (90,554)
--------- ------- -------
Transfer to/(from) reserves 2,638 (93,192) (90,554)
========= ======= =======
Return/(loss) per ordinary share 1.7p (59.4)p (57.7)p
The revenue column of this statement is the consolidated profit and loss account
of the Group.
The accompanying notes are an integral part of this statement.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the period.
CONSOLIDATED BALANCE SHEET
30 September 31 March 30 September
2003 2003 2002
#'000 #'000 #'000
Fixed assets
Investments 889,593 684,472 638,915
Tangible fixed assets 270 151 202
---------- ---------- ----------
889,863 684,623 639,117
---------- ---------- ----------
Current assets 49,657 29,217 58,989
Creditors: amounts falling due
within one year (47,597) (32,859) (3,056)
---------- ---------- ----------
Net current assets/(liabilities) 2,060 (3,642) 55,933
---------- ---------- ----------
Total assets less current
liabilities 891,923 680,981 695,050
Creditors: amounts falling due
after more than one year
Bank loan (90,173) - (20,866)
Provisions for liabilities and
charges (8,709) (6,276) (6,430)
---------- ---------- ----------
793,041 674,705 667,754
========== ========== ==========
Capital and reserves
Called up share capital 156,848 156,848 156,848
Capital redemption reserve 33,308 33,308 33,308
Capital reserve - realised 581,606 554,625 530,855
Capital reserve - unrealised (9,663) (94,845) (80,852)
Revenue reserve 30,894 24,769 27,595
---------- ---------- ----------
Total shareholders' funds 792,993 674,705 667,754
Equity minority interests 48 - -
---------- ---------- ----------
Capital employed 793,041 674,705 667,754
========== ========== ==========
Net asset value per
ordinary share 505.6p 430.2p 425.7p
CONSOLIDATED CASH FLOW STATEMENT
Period Ended Year Ended Period Ended
30 September 31 March 30 September
2003 2003 2002
#'000 #'000 #'000
Cash inflow/(outflow) from
operating activities 19,975 30,152 (1,389)
---------- ---------- ----------
Servicing of finance
Bank and loan interest paid (89) (171) (109)
---------- ---------- ----------
Net cash outflow from
servicing of finance (89) (171) (109)
---------- ---------- ----------
Taxation
UK tax paid - (75) (82)
UK tax received 1,229 - -
Overseas tax paid (582) (458) (528)
---------- ---------- ----------
Net cash inflow/(outflow) from
taxation 647 (533) (610)
---------- ---------- ----------
Financial investment
Purchase of investments (264,480) (355,406) (192,847)
Sale of investments 120,192 308,243 197,740
---------- ---------- ----------
Net cash (outflow)/inflow
from financial investment (144,288) (47,163) 4,893
---------- ---------- ----------
Capital expenditure
Purchase of fixed assets (218) (49) (49)
Sale of fixed assets 53 6 6
---------- ---------- ----------
Net cash outflow from
capital expenditure (165) (43) (43)
---------- ---------- ----------
Equity dividends paid (4,862) (4,862) (4,862)
---------- ---------- ----------
Net cash outflow
before management of liquid
resources and financing (128,782) (22,620) (2,120)
--------- ---------- ----------
Management of liquid resources
Purchase of government
securities (133,125) (216,978) (77,986)
Sale of government securities 182,728 228,812 81,162
---------- ---------- ----------
Net cash inflow from
management of liquid resources 49,603 11,834 3,176
---------- ---------- ----------
Financing
Increase in term loan 90,168 - -
Minority interests 48 - -
---------- ---------- ----------
Net cash inflow from financing 90,216 - -
---------- ---------- ----------
Increase/(decrease) in cash
in the period 11,037 (10,786) 1,056
========== ========== ==========
NOTES
1 ACCOUNTING POLICIES
The accounting policies used by the Group in the preparation of this interim
report are consistent with those applied in preparing statutory accounts for the
year ended 31 March 2003.
2 MOVEMENTS IN FIXED ASSET INVESTMENTS
Unquoted
and Funds and Government
Quoted Property Partnerships Securities Total
#'000 #'000 #'000 #'000 #'000
At 31 March 2003 271,533 142,639 152,970 117,330 684,472
Reclassifications (5,751) 5,751 - - -
Additions 179,972 35,715 56,376 132,619 404,682
Disposals (103,333) (2) (2,102) (186,447) (291,884)
Revaluation 75,476 8,675 8,313 (141) 92,323
------- ------- ------- ------- -------
At 30 September 417,897 192,778 215,557 63,361 889,593
2003
======= ======= ======= ======= =======
3 MOVEMENTS IN RESERVES
Capital
Redemption Capital Revenue
Reserve Reserve Reserve
#'000 #'000 #'000
At 31 March 2003 33,308 459,780 24,769
Profit for the period - - 5,823
Capital return for the period - 112,163 -
Other movements - - 302
--------- ---------- ---------
At 30 September 2003 33,308 571,943 30,894
========= ========== =========
4 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.
5 STATUTORY ACCOUNTS
The financial information in this publication is unaudited and does not
constitute statutory accounts. The statutory accounts for the year ended 31
March 2003 have been delivered to the Registrar of Companies in England and
Wales and the report of the auditors on those accounts was unqualified.
6 INTERIM REPORT
The Company's Interim Report for the six months ended 30 September 2003 will be
posted to shareholders on Wednesday, 29 October 2003. Copies of this
announcement and the Interim 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
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