Edinburgh UK Smaller Companies Tracker Trust plc
(formerly Themis FTSE All-Small Index Trust PLC)
PRELIMINARY ANNOUNCEMENT OF UNAUDITED ANNUAL RESULTS
for the year ended 31 March 2004
Chairman's Statement
Performance of the Company
The twelve month period to 31 March 2004 witnessed much stronger UK and World
equity markets as geo-political concerns eased and economic data improved. UK
small companies performed particularly well in the second and third quarters of
2003 as corporate profits came through strongly and the interest rate
environment remained favourable.
Our benchmark, the FTSE All-Small Index (excluding Investment Companies) - (the
'Index'), rose by 67.4% in the year. Over the same period, the capital net asset
value of an Ordinary Share in the Company (the 'NAV') increased from 129.01p to
217.53p, a rise of 68.6%. The Board is pleased to note that your Company has
continued to perform in line with its stated investment objective after taking
account of the trading costs associated with the levels of portfolio
re-balancing required in difficult and illiquid markets. The difference in
returns between the Index and NAV largely reflected the benefit to continuing
Shareholders from the Company buying back shares for cancellation at a discount
to NAV. I am pleased to report that in the twelve month period to 31 March 2004,
the Company's middle market share price rose by 79.8% to 196p.
As at 31 March 2004, the predicted dividend yield on the portfolio was 2.3%, in
line with the predicted dividend yield for the Index.
Dividends
Revenue return per Ordinary Share for the year to 31 March 2004 amounted to
3.48p (2003 - 3.36p). The Board previously declared an interim dividend of 1.75
pence per share which was paid on 5 December 2003 and it recommends a final
dividend of 2.00 pence, payable on 7 July 2004 to Shareholders on the register
on 28 June 2004. The total dividend of 3.75 pence compares with 3.75 pence paid
in respect of the previous year. Maintaining the total dividend of 3.75p at last
year's level has required a transfer from revenue reserves of �116,000. This
compares to a contribution from reserves last year of �268,000. If investment
income does not improve in 2005 a reduction in the dividend payment may be
required due to the low level of the revenue reserve which will, after the
payment of the recommended dividend, stand at �167,000.
Change of Name
Following the completion in October 2003 of the takeover by Aberdeen Asset
Management PLC of Edinburgh Fund Managers Group plc, the Board recommended to
shareholders a change in the Company name so as to include the established
Edinburgh brand name. This recommendation was made in the belief that the
established Edinburgh name, together with a newly combined investment and
marketing force with in-depth experience of managing index funds, should help
enhance the value of the Company over time.
Accordingly, at the Extraordinary General Meeting held on 24 February 2004
shareholders approved the change in the Company's name to Edinburgh UK Smaller
Companies Tracker Trust plc. Of the 46.2 million proxies received some 93.4%
were voted in favour and the name change was effected immediately. Shareholder
certificates have not been automatically replaced and those in the old name
remain valid.
I would reiterate that the investment objective of the Company remains unchanged
together with the proven investment process and the current secretarial and
administrative arrangements.
Share Price Discount to Net Asset Value
The issue of shares trading at discounts to net asset values has been a
continuing problem in the investment trust sector. In line with many of its
peers, your Company has not been immune from this issue and the Board is very
much aware that it is an area requiring constant attention. The Board believes
that the combination of re-branding to use the Edinburgh name with re-packaged
savings plans and the manager's expanded index and marketing teams, together
with a strong commitment to a sensible share buy back programme, should help to
lower the discount and reduce discount volatility.
I believe that this package of measures, together with such strong performance
from smaller companies and accurate index tracking, have helped to steadily
improve the discount to net asset value which stood at 10.0% at year end
compared with 15.8% at the beginning of the period.
Share Buybacks
Since the share buyback programme commenced in February 2000, a total of
16,312,537 Ordinary Shares have been bought back, representing 19.3% of the
original share capital. This includes 5,618,523 shares purchased during the
financial year under review and a further 1,230,000 shares bought in since the
end of the financial year.
The shares purchased during the financial year to 31 March 2004 were bought in
at an average discount of 15.4%. These buybacks enhanced the net asset value by
approximately 1.2%, helping to offset the costs incurred in portfolio
re-balancing during the year.
The Board will be proposing an ordinary resolution at the AGM again seeking
authorisation to make purchases in the market for cancellation of up to 14.99%
of the current number of issued ordinary shares of 68,141,477.
Investment Management
With the re-branding of the trust and the desire to enhance shareholder value,
the Board and the Manager agreed to a reduction in the investment management
fee. With effect from 1 April 2004, the annual management fee has been reduced
from 0.5% to 0.4% of the net assets of the Company. All the other terms of the
agreement remain unchanged.
As part of the reorganisation within the management company following the offer
for Edinburgh Fund Managers, it was agreed that John Webb and John Kenneally,
the two founding investment managers of the Trust, would leave Aberdeen Asset
Managers by mutual agreement. I should like to thank them for their contribution
to the success of the Company since its inception more than ten years ago.
The Directors have undertaken an annual review of the Manager and are of the
opinion that the continuing appointment of Aberdeen Asset Managers Limited on
the terms agreed is in the interests of Shareholders as a whole. This opinion is
supported by the competitive nature of the management fee, the satisfactory
deliverance of the stated investment policy and the continued marketing efforts
undertaken by the Manager.
Stocklending
The Company continued its policy of lending stock during the year. The Board
considers that stocklending provides a useful supplement to the Company's income
account, but only undertakes lending on a fully collateralised basis.
Website
The dedicated website can now be accessed at :
www.edinburgh-uksmalltracker.co.uk giving current and historical information
about the Company including a daily net asset value. I recommend this site to
Shareholders as a way of following the performance of the Company and of
obtaining comprehensive statistics and fund information.
Proposed Board Changes
By the time of the AGM in July 2004 I will have been a director for ten years
and will not be standing for re-election. It is proposed that Michael Cumming,
who has been a director for over four years, should take over the Chairmanship
from me and I would urge you to give him your continued support. Robert
Williams, who has also been a director since 1994, has indicated his intention
not to stand for re-election at the AGM in 2005. This will provide the necessary
continuity of experience on the Board.
I should like to thank my fellow Directors for all their hard work and the
unstinting support they have given to me during the period of my Chairmanship.
It has been a pleasure being Chairman of your Company and I will stand down in
July knowing that the Company is in safe hands.
Annual General Meeting
The AGM will be held at the Company's registered office at One Bow Churchyard,
London, EC4 on 5 July 2004 at 11.30am. At the meeting Shareholders will once
again be given the opportunity to vote on the continuation of the Company. This
opportunity is offered at each AGM. Edinburgh UK Smaller Companies Tracker Trust
plc is the only investment trust specialising in 'broadly matching' the FTSE
All-Small Index, a true small-cap index encompassing all fully listed companies
outside the FTSE 350 but excluding investment companies and quoted companies on
AIM. The Company has the virtue of a simple capital structure and it offers
investors a low cost exposure to the UK smaller companies equity market, which
should continue to benefit from stronger economic growth and remain an
attractive long term investment opportunity. The Board recommends that
Shareholders vote in favour of the continuation resolution.
Peter Dicks
Chairman
18 May 2004
Statement of Total
Return ------- -------
----------------------
Year ended Year ended
------- -------
31 March 2004 31 March 2003
(unaudited) (audited)
------- -------
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
---------------------- ------- ------- -------- ------- ------- -------
Gains/(losses) on - 63,290 63,290 - (45,515) (45,515)
investments
Income 3,836 - 3,836 3,745 - 3,745
Investment management (679) - (679) (586) - (586)
fee (excl. VAT)
Other expenses (640) (18) (658) (634) - (634)
---------------------- ------- ------- ------- ------- ------- -------
Net return on ordinary
activities before
interest payable and 2,517 63,272 65,789 2,525 (45,515) (42,990)
taxation
Interest payable (2) - (2) - - -
---------------------- ------- ------- ------- ------- ------- -------
Net return on ordinary
activities before
and after taxation 2,515 63,272 65,787 2,525 (45,515) (42,990)
Dividends in respect (2,631) - (2,631) (2,793) - (2,793)
of equity shares ------- ------- ------- ------- ------- -------
----------------------
Transfer (from)/to (116) 63,272 63,156 (268) (45,515) (45,783)
reserves ======= ======= ======= ======= ======= =======
======================
Return per share 3.48 87.65 91.13 3.36 (60.63) (57.27)
(pence) ======= ======= ======= ======= ======= =======
======================
The revenue column of this statement represents the revenue account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the year.
Balance Sheet
-------------------------------------- --------- ---------
As at As at
31 March 31 March
--------- ---------
2004 2003
(unaudited) (audited)
--------- ---------
�'000 �'000
-------------------------------------- --------- ---------
Fixed assets
Investments 150,109 95,773
-------------------------------------- --------- ---------
Current assets
Debtors and prepayments 973 957
Cash at bank and in hand 2,020 2,216
-------------------------------------- --------- ---------
2,993 3,173
Creditors: amounts falling due within one (2,445) (2,160)
year --------- ---------
--------------------------------------
Net current assets 548 1,013
-------------------------------------- --------- ---------
Net assets 150,657 96,786
====================================== ========= =========
Share capital and reserves
Called-up share capital 17,295 18,700
Share premium account - 83,564
Special reserve 83,546 -
Other capital reserves:
Capital reserve - realised 70,909 80,002
Capital reserve - unrealised (25,078) (88,176)
Capital redemption reserve 3,818 2,413
Revenue reserve 167 283
-------------------------------------- --------- ---------
Shareholders' funds 150,657 96,786
====================================== ========= =========
Net asset value per share (pence) 217.77 129.39
====================================== ========= =========
Cash Flow Statement
------------------------------ -------- -------- ------- -------
Year ended Year ended
31 March 2004 31 March 2003
(unaudited) (audited)
�'000 �'000 �'000 �'000
------------------------------ -------- -------- ------- -------
Net cash inflow from operating 2,352 2,640
activities
Servicing of finance
Bank interest paid (2) -
Financial investment
Purchases of investments (34,885) (37,307)
Sales of investments 44,385 36,671
------------------------------ -------- -------- ------- -------
Net cash inflow/(outflow) from 9,500 (636)
financial investment
Equity dividends paid (2,743) (3,008)
------------------------------ -------- -------- ------- -------
Net cash inflow/(outflow) before 9,107 (1,004)
financing
Financing
Repurchase of Ordinary shares (9,285) (1,828)
Costs relating to cancellation of (18) -
share premium account -------- -------- ------- -------
------------------------------
Net cash outflow from financing (9,303) (1,828)
------------------------------ -------- -------- ------- -------
Decrease in cash (196) (2,832)
============================== ======== ======== ======= =======
Reconciliation of net cash flow
to movements in net funds
Decrease in cash as above (196) (2,832)
Net funds at 1 April 2,216 5,048
------------------------------ -------- -------- ------- -------
Net funds at 31 March 2,020 2,216
============================== ======== ======== ======= =======
Notes:
1. Income
2004 2003
�'000 �'000
Income from investments (all UK)
UK dividend income 3,501 3,363
Unfranked investment income 38 31
------ ------
3,539 3,394
------ ------
Other income
Deposit interest 47 101
Stocklending fees 250 250
------ ------
297 351
------ ------
Total income 3,836 3,745
====== ======
2. Return per share
2004 2003
Revenue Capital Total Revenue Capital Total
p p p p p p
Return per 3.48 87.65 91.13 3.36 (60.63) (57.27)
Ordinary ======= ====== ====== ======= ====== ======
share
The revenue return per Ordinary share is based on the net revenue on ordinary
activities after taxation of �2,515,000 (2003 - �2,525,000) and on 72,190,088
(2003 - 75,062,763) Ordinary shares, being the weighted average number of
Ordinary shares in issue during the year.
The capital gain per Ordinary share is based on the net capital gain for the
financial year of �63,272,000 (2003 - loss of �45,515,000) and on 72,190,088
(2003 - 75,062,763) Ordinary shares, being the weighted average number of
Ordinary shares in issue during the year.
3. Net asset value per share
The net asset value per share and the net assets attributable to Shareholders at
the year end, calculated in accordance with the Articles of Association were as
follows:
Net asset value Net assets
per share attributable attributable
2004 2003 2004 2003
p p �'000 �'000
Ordinary share 217.77 129.39 150,657 96,786
======== ======== ======== ========
The net asset value per Ordinary share is based on total Shareholders' funds and
on 69,181,477 (2003 -74,800,000) Ordinary shares, being the number of Ordinary
shares in issue at the year end.
4. The financial information for the year ended 31 March 2004 comprise
non-statutory accounts within the meaning of section 240 of the Companies Act
1985. The financial information for the year ended 31 March 2003 has been
derived from the published accounts that have been delivered to the Registrar of
Companies and on which the report of the auditors is unqualified and does not
contain a statement under section 237 (2) or (3) of the Companies Act 1985. The
statutory accounts for 2004 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. Copies of the Annual Report will be posted to all Shareholders in due course
and further copies may be obtained from the Registered Office, One Bow
Churchyard, Cheapside, London EC4M 9HH.
Aberdeen Asset Management PLC
Secretaries
18 May 2004
Edinburgh Uk Small Track (LSE:EDU)
Historical Stock Chart
From Jun 2024 to Jul 2024
Edinburgh Uk Small Track (LSE:EDU)
Historical Stock Chart
From Jul 2023 to Jul 2024
