RNS Number:1386Z
Aberdeen Development Capital PLC
25 July 2002
ABERDEEN DEVELOPMENT CAPITAL PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
for the year ended 31 May 2002
The year ended 31 May 2002 has been another successful one for your Company,
with the Net Asset Value per Ordinary Share ("NAV") increasing by 8.81% to
74.34p, compared with a fall of 16.68% in the FTSE Small Cap Index (excluding
Investment Trusts). Over 3 and 5 years, the NAV has increased by 13.25% and
23.49% respectively, compared with increases of 1.76% and 12.36% in the Index.
By far the biggest contributor to the increase in the NAV has been the
substantial uplift in the valuation of the Company's largest investment, John
Wood Group PLC ("Wood"), which listed on the London Stock Exchange on June 5,
2002, immediately after the Company's year-end. As detailed in the Manager's
Review, the Company has realised half of its holding in Wood since the IPO, and
retains the balance subject to a six month lock-in, with any future decisions to
sell further shares dependent on market conditions and portfolio issues at the
time. The investment in Wood was the first made by the Company following its
launch in 1986, and has been an outstanding success, generating an IRR of just
under 30% over 15 years. This highly satisfactory outcome is a tribute to Sir
Ian Wood and his outstanding management team, who have overseen the
transformation of the company from a small fishing boat owner back in the early
1970's to a global oil services company with over 10,000 employees operating in
bases in over 30 countries.
Despite volatile markets and continuing difficult economic conditions, the
Company's manager has been extremely busy, investing over £7.8 million in 8 new
companies and 5 existing investments, and also realising over £15.3 million from
the sale of 13 investments, producing gains over cost of some £8.0 million. This
excellent performance was offset by the disappointment of the failure of
Residence International, at a cost of some £3.16 million, as detailed in the
Interim Statement. Funds investing private equity are inevitably going to
experience failures from time to time, but it is none the less extremely
disappointing when it happens, and it is important that lessons are learned from
such failures.
Income received from investments has been maintained at around £2.9 million,
allowing the Board to recommend that the Ordinary Dividend be maintained at 5.2p
per Ordinary Share. It is worth noting, however, that income for the year
included a one-off dividend of some £750,000 arising as part of the sale of the
investment in Grampian Country Food Group. Such one-off dividends are not
unusual as part of the disposal proceeds from private equity investments, and,
together with the ability to control the financial structure of new investments
, they allow the Manager the opportunity to ensure that the proportion of total
returns between capital and income is at a level which will enable the
aspirations of both Zero dividend preference and Ordinary Shareholders to
continue to be met.
Included for the first time in the Notice of Meeting which you will find at the
end of the Annual Report & Accounts are resolutions proposed to grant authority
to the Board to buy back, for cancellation, both Zero Dividend Preference and
Ordinary Shares. Both classes of share are currently trading on the London Stock
Exchange at a discount to their NAV and the Board considers that market
purchases, to the extent that such purchases are able to be made at less than
their accrued capital value per share, would benefit remaining shareholders.
Your Board remains confident that the existing investment portfolio, together
with the excellent deal-flow attracted by the Manager, will continue to produce
satisfactory long-term returns for shareholders.
Calum A MacLeod
Chairman
26 July 2002
The unaudited results were:
Group Statement of Total Return (incorporating the revenue account *)
Year ended 31 May 2002
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 5,457 5,457
Income 2,884 - 2,884
Investment management fee (391) (794) (1,185)
Other expenses (535) (265) (800)
Net return before finance costs and taxation 1,958 4,398 6,356
Interest payable and similar charges (158) (321) (479)
Return on ordinary activities before tax 1,800 4,077 5,877
Tax on ordinary activities (5) - (5)
Return attributable to shareholders 1,795 4,077 5,872
Appropriations in respect of non-equity shares
- Zero dividend preference - (1,728) (1,728)
Return attributable to equity shareholders 1,795 2,349 4,144
Dividends on equity shares (1,920) - (1,920)
Transfer (from)/to reserves (125) 2,349 2,224
Return per share (pence):
- Zero dividend preference - 5.72 5.72
- Ordinary 4.86 6.36 11.22
Year ended 31 May 2001
(audited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 8,161 8,161
Income 2,940 - 2,940
Investment management fee (435) (882) (1,317)
Other expenses (304) (504) (808)
Net return before finance costs and taxation 2,201 6,775 8,976
Interest payable and similar charges (213) (432) (645)
Return on ordinary activities before tax 1,988 6,343 8,331
Tax on ordinary activities 8 - 8
Return attributable to shareholders 1,996 6,343 8,339
Appropriations in respect of non-equity shares
- Zero dividend preference - (1,605) (1,605)
Return attributable to equity shareholders 1,996 4,738 6,734
Dividends on equity shares (1,920) - (1,920)
Transfer to reserves 76 4,738 4,814
Return per share (pence):
- Zero dividend preference - 5.31 5.31
- Ordinary 5.41 12.83 18.24
* The Statements of total return presented above are in accordance with the
Statement of Recommended Practice for Financial Statements of Investment Trust
Companies.
Balance Sheets as at 31 May 2002
Group Company Group Company
31 May 2002 31 May 2002 31 May 2001 31 May 2001
(unaudited) (unaudited) (audited) (audited)
£'000 £'000 £'000 £'000
Fixed assets
Investments 54,666 41,447 57,111 41,795
Subsidiary undertaking - 2,760 - 2,295
54,666 44,207 57,111 44,090
Current assets
Debtors 5,289 10,266 1,111 5,740
Cash at bank and in hand 426 23 564 295
5,715 10,289 1,675 6,035
Creditors: amounts falling due within one year (3,757) (3,707) (3,345) (3,289)
Net current assets/(liabilities) 1,958 6,582 (1,670) 2,746
Total assets less current liabilities 56,624 50,789 55,441 46,836
Creditors: amounts falling due after one year
Minority Interest (4,435) - (7,424) -
(1,353) - (1,133) -
Total net assets 50,836 50,789 46,884 46,836
Capital and reserves
Called-up Ordinary shares 3,692 3,692 3,692 3,692
Called-up Zero dividend preference shares 3,021 3,021 3,021 3,021
Share premium account 13,940 13,940 13,940 13,940
Capital reserve - realised 15,732 16,989 10,722 12,044
Capital reserve - unrealised 13,391 12,090 14,324 12,956
Revenue reserve 1,060 1,057 1,185 1,183
Total shareholders' funds 50,836 50,789 46,884 46,836
Equity shareholders' funds 27,446 27,399 25,222 25,174
Non-equity shareholders' funds 23,390 23,390 21,662 21,662
Total shareholders' funds 50,836 50,789 46,884 46,836
Net asset value per share (pence):
- Zero dividend preference 77.43 77.43 71.71 71.71
- Ordinary - basic 74.34 74.21 68.32 68.19
Cash Flow Statements for the year ended 31 May 2002
2002 2001
(unaudited) (audited)
£'000 £'000 £'000 £'000
Net cash inflow from operating
Activities 614 1,631
Net cash outflow from servicing of
Finance (478) (651)
Net tax recovered/(paid) 72 (317)
Financial investment
Purchase of investments (7,951) (9,526)
Sale of investments 11,970 12,497
Net cash inflow from financial investments 4,019 2,971
Equity dividends paid (1,970) (1,830)
Net cash (outflow)/inflow before
Financing (2,257) 1,804
Financing
Bank loan (2,989) (1,576)
Net cash (outflow)from financing (2,989) (1,576)
(Decrease)/increase in cash (732) 228
Reconciliation in net cash flow to movements in net debt
(Decrease)/increase in cash as above (732) 228
Cash outflow from increase in loans 2,989 1,576
Exchange movements - 3
Movement in net debt in the year 2,257 1,807
Net debt at 1 June (8,808) (10,615)
Net debt at 31 May (6,551) (8,808)
2002 2001
(unaudited) (audited)
1 Income £'000s £'000s
Income from investments
Franked investment income 2,521 2,207
Unfranked investment income 336 647
2,857 2,854
Other income
Deposit interest 27 86
2,884 2,940
2 Revenue return per Ordinary share is based on the net revenue on ordinary activities after taxation of
£1,795,000 (2001 - £1,996,000) and on 36,919,225 (2001 - same) Ordinary shares, being the number of such shares
in issue during the year. Capital return per Ordinary share, after deduction of appropriations in respect of
Zero dividend preference shares, is based on net gains for the year of £2,349,000 (2001 - £4,738,000) and on
36,919,225 (2001 - same) Ordinary shares, being the number of such shares in issue during the year. Capital
return per Zero dividend preference share is based on appropriations in respect of Zero dividend preference
shares of £1,728,000 (2001 - £1,605,000) and on 30,206,638 (2001 - same) Zero dividend preference shares, being
the number of such shares in issue during the year.
3 Net asset value per Ordinary share of the Group is based on equity shareholders' funds of £27,446,000 (31 May
2001 - £25,222,000) and on 36,919,225 (31 May 2001 - same) Ordinary shares, being the number of Ordinary shares
in issue at the end of the year. Net asset value per Ordinary share of the Company is based on equity
shareholders' funds of £27,399,000 (31 May 2001 - £25,174,000) and on 36,919,225 (2001 - same) Ordinary shares,
being the number of Ordinary shares in issue at the end of the year. Net asset value per Zero dividend
preference share is based on non-equity shareholders' funds of £23,390,000 (31 May 2001 - £21,662,000) and on
30,206,638 (31 May 2001 - same) Zero dividend preference shares in issue at the year end.
4 The financial information set out above does not constitute the Group's statutory accounts for the years ended
31 May 2002 or 2001. The financial information for 2001 is derived from the statutory accounts, which have been
delivered to the Registrar of Companies. The auditors have reported on the 2001 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 2002 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 following the
Annual General Meeting.
5 Copies of the Annual Report will be posted to shareholders in due course and further copies will be available
from the Company's Registered Office, One Albyn Place, Aberdeen AB10 1YG.
26 July 2002 Aberdeen Asset Management PLC Secretaries
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