Interim Management Statement
June 12 2008 - 2:00AM
UK Regulatory
INTERIM MANAGEMENT STATEMENT
Anglo & Overseas Plc
Interim Management Statement for the three months to 30 April 2008
The Board of Anglo & Overseas Plc ('the Company') announces its second Interim
Management Statement as required by the UK Listing Authority's Disclosure and
Transparency Rules. This Statement is in respect of the period from 1 February
2008 to 30 April 2008.
Objective
The objective of Anglo & Overseas Plc is to provide shareholders with above
average returns over the longer term through both capital appreciation and
income growth.
Investment Policy
The Company's investment policy for the period under review was:
The Company invests principally in securities of publicly quoted companies
worldwide, though it may invest up to 5 per cent of its gross assets in
unquoted securities. There are concentrated UK and international portfolios,
with each portfolio representing between 40 and 60 per cent of the Company's
total investments, and comprising 30 to 40 securities. The Company may also
invest in bonds, cash or short term deposits where the manager considers it
prudent to do so. The Company's investments are managed without reference to
the composition of any stock market index.
Subsequent to the period end there was a change to the Company's investment
policy, which was approved by shareholders at an Extraordinary General Meeting
of the Company that was held on 16 May 2008. The Company's new investment
policy is:
Asset allocation
The Company's investment policy is to invest in a focused portfolio comprising
principally securities of publicly quoted companies worldwide which the
investment manager considers to be undervalued on the basis of their earnings
potential. The Company may also invest up to 5 per cent of its gross assets in
unquoted securities and up to 10 per cent of its gross assets in other listed
investment companies or funds, including investment trusts. The Company's
portfolio will be constructed without reference to either the composition of
any stock market index or any geographic, industrial or sectoral asset
allocation limits.
Where the investment manager believes market or economic conditions make equity
investment unattractive or while seeking appropriate investment opportunities
for the portfolio or to maintain liquidity, the Company may invest in bonds and
other debt instruments, cash, cash equivalents or short term deposits. The
proportion of the Company's assets which may be invested in this way will vary
according to the investment manager's view of market or economic conditions and
the availability of suitable equity investment opportunities. In the unlikely
event of very extreme conditions, 100 per cent of the portfolio could be so
invested, although the use of such investments is not expected normally to
exceed 30 per cent of gross assets. In addition, the Company may purchase
derivatives for the purposes of efficient
portfolio management (i.e. for the purpose of reducing, transferring or
eliminating investment risk in its investments, including protection against
currency risk).
Risk diversification
In order to spread risk, the portfolio will normally consist of between 40 and
70 equity investments in publicly quoted companies. No single investment will
represent more than 15 per cent. of the Company's gross assets at the time of
its acquisition.
Gearing
The Company's policy on gearing will be not to have fixed or structural
gearing, but the Company may from time to time, when deemed appropriate, borrow
for investment purposes in various currencies to suit investment conditions.
This gearing will not exceed 20 per cent. of shareholders' funds at the time of
borrowing. This is intended to enhance the Company's ability to take advantage
of future investment opportunities identified by the investment manager,
subject always to the Board's overall control in relation to borrowings.
Review of the Period
Results
During the three month period to 30 April 2008 the Company's net asset value
per share (including current period revenue) decreased by 1.3% from 117.31p to
115.73p. The total return for the period was -1.3%.
Although the Company's portfolio is not managed by reference to any stock
market index, the Board having decided not to adopt a formal benchmark, we
continue to believe it would be useful to highlight the performance of your
Company against market indices for comparison purposes.
The total return from the FTSE All-Share Index over the three month period was
+4.9%, while the corresponding total return from the FTSE All-World ex UK Index
was very similar at +4.8%. The total return from the average of these indices
over the three month period under review was +4.8%.
During the three month period performance was adversely impacted by the
Company's lack of exposure to emerging markets and mining stocks, which
continued to perform well during the period under review.
Dividend
The Company paid an interim dividend of 0.80p per share for the year to 31 July
2008. This was paid on 7 May 2008 to shareholders on the register as at 18
April 2008. The ex-dividend date was 16 April 2008.
In the EGM circular relating to the change of investment policy the Directors
stated that they expect, barring unforeseen circumstances, that the total
dividend for the current year would increase by not less than 20 per cent. over
the previous year. The total dividend for the prior full period to 31 July 2007
was 2.20p per share.
Share Price and Discount
There was little change in the share price in the three month period,
increasing by 0.3% from 99.25p to 99.50p. This resulted in the share price
discount to net asset value (excluding income) decreasing from 15.9% at the end
of January to 13.4%.
As previously stated your Board continues to believe that the shares of your
Company should trade in a relatively narrow range around net asset value and as
a consequence operates
a share buy back policy. During the period the Company repurchased 421,000
shares which are all held in treasury. The total number of shares held in
treasury as at 30 April 2008 totalled 6,421,000 shares. The total number of
shares in circulation at 30 April 2008 was 83,303,381, with the total number of
shares in issue, including treasury shares, being 89,724,381 shares.
Investment Outlook
Global economic growth is slowing, with the US clearly slipping into recession
and growing evidence of a slowdown in other economies. We believe margin
assumptions globally are optimistic, with the corporate sector starting to
suffer from slowing revenues, which combined with higher input costs will
reverse some of the operational gearing benefits that companies have enjoyed in
recent years. In addition the cost of borrowing is likely to remain high for
some time as the banking sector recapitalises.
Although we remain cautious of the short term economic outlook, we believe the
portfolio is well placed in this more adverse economic environment to preserve
capital and achieve above average long term real returns. The portfolio has a
substantial representation in large capitalisation stocks with strong balance
sheets and good cash flow.
FINANCIAL SUMMARY
30 April 31 January % Change
2008 2008
Net asset value per share (including 115.73p 117.31p -1.3%
current period revenue)
Net asset value per share (excluding 114.96p 117.98p -2.6%
current period revenue)
Share price 99.50p 99.25p +0.3%
Share price discount to net asset value 13.4% 15.9%
(excluding current period revenue)
Net assets �96.4m �98.2m
Past performance is not a guide to future performance.
12 June 2008
Enquiries:
Sandy Nairn
Graham Campbell
Kenneth Greig
Edinburgh Partners Limited
12 Charlotte Square
Edinburgh EH2 4DJ
Tel: 0131 270 3800
Registered Office of the Company:
Beaufort House
51 New North Road
Exeter EX4 4EP
END
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