German Smaller Co - Final Results
May 15 1998 - 3:35AM
UK Regulatory
RNS No 5257u
GERMAN SMALLER COMPANIES INVESTMENT TRUST PLC
14th May 1998
German Smaller Companies Investment Trust plc
Preliminary Results for the Year ended 31 March 1998
The directors announce the audited results for the year ended 31 March 1998.
The objective of the company is to achieve capital appreciation through
investment primarily in the equity securities of small and medium-sized German
companies.
The directors have decided to recommend at the annual general meeting to be
held on Tuesday 14th July 1998 a foreign income dividend (FID) of 0.6p per
ordinary share to be paid to shareholders on the register on 1 June 1998. The
payment of a FID of 0.6p would be made on 22nd July 1998. Payment of a FID
enables the Company to recover all of its advance corporation tax, which would
otherwise have been largely irrecoverable.
Statement of Total Return (incorporating the revenue
account) of the Company
Year ended 31 March 1998 Year ended 31 March
1997
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Gains on investments - 5,015 5,015 - 933 933
Exchange (losses)/gains (19) (197) (216) (24) (320) (344)
Overseas dividends 994 - 994 1,319 - 1,319
Bank interest and other 34 - 34 58 - 58
income - (100) (100) - - -
Reduction of share
premium account expenses
------- ------- ------- ------- ------- -------
1,009 4,718 5,727 1,353 613 1,966
Investment management fee (477) - (477) (464) - (464)
Other expenses (111) - (111) (130) - (130)
------- ------- ------- ------- ------- -------
Return on ordinary 421 4,718 5,139 759 613 1,372
activities before
taxation
Tax on ordinary (161) - (161) (234) - (234)
activities
------- ------- ------- ------- ------- -------
Return on ordinary 260 4,718 4,978 525 613 1,138
activities after taxation
Dividends in respect of (254) - (254) (466) - (466)
ordinary shares
------- ------- ------- ------- ------- -------
Transfer to reserves 6 4,718 4,724 59 613 672
------- ------- ------- ------- ------- -------
- - - - - -
Return per ordinary share 0.6p 11.2p 11.8p 1.2p 1.5p 2.7p
===== ===== ===== ===== ===== =====
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31 March 1998 or 1997 but is derived
from those accounts. Statutory accounts for 1997 have been delivered to the
registrar of companies and those for 1998 will be delivered following the
company's annual general meeting. The auditors have reported on those
accounts; their reports did not contain statements under section 237 (2)
(accounting records or returns inadequate or accounts not agreeing with
records and returns) or (3) (failure to obtain necessary information and
explanations) of the Companies Act.
German Smaller Companies Investment Trust plc is registered in England and
Wales No 1879372. During the year ended 31 March 1998 it was an investment
company within the meaning of section 266 of the Companies Act 1985.
Registered office: 10 Fleet Place, London, EC4M 7RH.
For further information contact:
Alison Powell or Michael Oliver
Hill Samuel Asset Management Limited
0171 203 3000
Ten largest investments
% of Trust's
equity holdings
at 31 March 1998
Name and description
1. MLP Financials 5.0
2. Adidas Textiles 4.1
3. Hugo Boss Textiles 4.0
4. Fresenius Chemicals 3.9
5. Depfa Bank Financials 3.8
6. Kolnische Financials 3.4
Ruckversicherung
7. SKW Trostberg Chemicals 3.0
8. Mobilcom Consumer Goods and 2.6
Services
9. GEA Engineering 2.2
10. Rhon-Klinikum Healthcare 2.2
____
34.2
====
Investment portfolio % of Trust equity % sector
at holdings weightings
31 March 1998 C Dax (ex Dax)
Index*
Automobiles 1.8 3.6
Breweries 1.5 1.6
Building & 6.9 7.4
Construction
Chemicals 10.0 14.9
Electricals 5.0 2.4
Financials 20.1 28.2
Engineering 13.0 9.9
Utilities - 10.0
Textiles 12.5 4.5
Consumer goods & 18.4 8.3
services
Steel 7.7 4.0
Miscellaneous 0.9 2.9
Healthcare 2.2 -
Paper - 2.3
*The sectoral index figures shown above are as at 31 January 1998 because the
31 March 1998 data is not readily available. However, it is anticipated that
the Deutsche Borse will be publishing the CDAX(exDAX) capital index from the
end of June 1998, which will be used for comparative purposes in future.
Statement by the Chairman
The Trust's undiluted net asset value per share has increased by 8.6% during
the year ended 31 March 1998 to 139.7p. The share price has increased 6.4% to
112.3p. The German stock market rose strongly during the Trust's financial
year and outperformed most of Europe's other stock markets in local currency
terms. A proportion of this rise was eroded however by the 12% decline of the
deutschmark against sterling over the year.
Corporate profits grew faster than many analysts' expectations as the benefits
of heavy restructuring over the last two years coincided with improved demand
and favourable currency conditions. There were strong inflows of liquidity
into the market, particularly from domestic institutions which are gradually
shifting assets from lower yielding bonds and time deposits into equities.
The Neuer Markt (New Market), launched in March 1997, to promote stock market
listings for smaller growth companies, particularly in electronics and
biotechnology sectors, met with spectacular success and encouraged many
domestic retail investors into equity investment for the first time. The
Trust benefited from this growing interest in smaller stocks and from a more
general change in the pattern of investment away from sector rotation in
favour of individual stocks.
Although the market is highly valued, it is not overvalued relative to the
bond market and the economic background remains highly supportive: domestic
demand is reviving, but not sufficiently to trigger inflation or more than
modest interest rate rises. Corporate activity in the form of takeovers,
restructuring and, following recent legislation, share buybacks will continue
to excite investor interest. The German government has, as of 1 April 1998,
allowed the establishment of private pension plans for both corporate entities
and individuals. Over time this should promote major funds flows into the
stock market.
The smaller sector should thrive in this environment, not least thanks to
increased new issue activity. The Trust remains fully invested in a
diversified portfolio of companies which are well managed and able to take
advantage of the changing opportunities within their industries.
Approval was given by shareholders at an extraordinary general meeting on 11
March 1998 for our company to buy in up to 6.3 million (14.99%) of its issued
share capital. It is intended that such purchases will enhance the net asset
value of the company's shares as well as contributing to the reduction of the
discount to net asset value.
P D Minchin
13 May 1998
END
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