TR Smaller Co. Inv - Final Results
July 28 1997 - 3:30AM
UK Regulatory
RNS No 9326x
TR SMALLER COMPANIES INVESTMENT TRUST PLC
28th July 1997
TR SMALLER COMPANIES INVESTMENT TRUST PLC
UNAUDITED PRELIMINARY GROUP RESULTS
FOR THE YEAR ENDED 31 MAY 1997
Highlights
* Testing period for international smaller companies fund
* Difficult first half to year, improvement seen in last
six months
* Further consolidation in smaller company sector expected
* Company continues to seek successful companies
Assets
The year under review has proved to be a testing period for
an international smaller companies fund. Smaller quoted
companies around the world have continued to underperform
larger companies because investors have been prepared to
pay a premium for greater stock market liquidity. The
other outstanding feature over the year has been the
strength of sterling which rose by 15.1% on a trade
weighted basis and thereby reduced the sterling returns
from the 41% of assets outside the United Kingdom.
After a particularly difficult first half to the year, the
second six months saw an improving trend as the Company
produced a total return of 6.2% compared with a rise of
7.4% in the FTSE SmallCap Index (excluding investment
trusts). It is encouraging to note that over the six
months to the end of June 1997 the Company has produced a
total return of 7.4% compared with a rise of 2.4% in the
FTSE Small Cap Index (excluding investment trusts).
The UK portfolio rose by 2.1% on a total return basis which
compares with a rise of 6.1% in the FTSE SmallCap Index
(excluding investment trusts). After an excellent year
last year, the US portfolio fell by 2.8% compared with a
rise of 1.3% in the Russell 2000 Index. The Continental
European portfolio produced another excellent return of
17.7% compared with a rise of 7.0% in the James Capel
Smaller European Companies (ex UK) Index. Although the
Tokyo Second Section Index fell by 19.9% in yen terms,
currency weakness extended this to a fall of 29.6% in
sterling terms. The Japanese portfolio fell by 28.0%. The
portfolio exposed to the Pacific Rim rose by 4.1% compared
with a rise of 9.4% in the Salomon Pacific Index (ex
Japan).
TR SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May
1997
Revenue and Dividends
Total group earnings for the year were 4.15p per ordinary
share which included a contribution of 0.50p from the
Company's finance subsidiary. The Board is recommending an
unchanged final dividend of 2.45p making total net dividend
payments for the year of 3.95p (1996: 3.95p). Unlike many of
the newer trusts, the Company continues to have significant
revenue reserves.
Change of Name
The Board is proposing to shareholders a change of name for
the Company to The Henderson Smaller Companies Investment
Trust plc.
Prospects
The business environment is intensely competitive the world
over. In addition the UK corporate sector will be struggling
with the effects of a strong pound, having to compete on an
increasingly global basis and against a background of a
tightening fiscal and monetary policy designed to contain
strong consumer activity. The Board anticipates consolidation
in the smaller company sector as corporate entities strive to
build market position and achieve pricing power. Organic
growth is achieved by winning market share and by offering a
superior product or service at a competitive price. Product
development and innovation is key. A smaller company must be
well managed and focused to prosper and grow. The Company
will continue to search out these successful companies.
Enquiries:
John Alexander
Director & Manager
TR Smaller Companies Investment Trust PLC
Tel: 0171 410 4340
TR SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May
1997
Group Statement of Total Return (incorporating the revenue account)
for the year ended 31 May 1997
Year ended 31 May Year ended 31 May
1997 1996 (audited and
restated*)
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Total capital - (6,504) (6,504) - 108,798 108,798
(losses)/gains from
investments
Income from fixed asset 12,066 - 12,066 14,836 - 14,830
investments
Other interest receivable 1,898 - 1,898 1,262 - 1,262
and similar income
----- ----- ----- ----- ----- -----
Gross revenue and capital 13,964 (6,504) 7,460 16,092 108,798 124,890
(losses)/gains
Management fee (1,801) - (1,801) (1,708) - (1,708)
Other administrative (274) - (274) (551) - (551)
expenses
----- ----- ----- ----- ----- -----
Net return/(loss) on
ordinary activities before
interest payable and 11,889 (6,504) 5,385 13,833 108,798 122,631
taxation
Interest payable (2,316) - (2,316) (2,341) - (2,341)
----- ----- ----- ----- ----- -----
Net return/(loss) on
ordinary activities before
taxation 9,573 (6,504) 3,069 11,492 108,798 120,290
Taxation on net return on (2,147) - (2,147) (2,526) - (2,526)
ordinary activities
----- ----- ----- ----- ----- -----
Net return/(loss) on
ordinary activities after
taxation 7,426 (6,504) 922 8,966 108,798 117,764
Appropriations - Dividends
Cumulative preference stock (28) - (28) (28) - (28)
dividends
----- ----- ----- ----- ----- -----
Net return/(loss)
attributable to ordinary
shareholders 7,398 (6,504) 894 8,938 108,798 117,736
Dividends - ordinary shares
Interim of 1.50p (1996: (2,673) - (2,673) (2,673) - (2,673)
1.50p)
Final of 2.45p (1996: (4,366) - (4,366) (4,364) - (4,364)
2.45p)
--- --- --- --- --- ---
7,039 - 7,039 7,037 - 7,037
----- --- ----- ----- --- -----
Transfer to/(from) reserves 359 (6,504) (6,145) 1,901 108,798 110,699
===== ===== ===== ===== ===== =====
Return/(loss) per ordinary 4.15p (3.65p) 0.50p 5.02p 61.05p 66.07p
===== ===== ===== ===== ===== =====
The revenue column of this statement represents the revenue
account of the Group.
The total recognised revenue and capital gains since the last
audited accounts were #1,692,000, which comprise the total
return for the year of #922,000 as shown above, and #770,000
relating to the prior year adjustment.
* Restated for the change in accounting policy (see note 2).
TR SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May
1997
(Unaudited) (Audited
and
Restated*)
Summary of Group Net Assets: 31 May 31 May 1996
1997
#'000 #'000
Fixed asset investments at valuation 490,026
508,085
Net current liabilities
(4,070) (16,023)
--------- ---------
Total assets less current liabilities
485,956 492,062
Creditors: amounts falling due after (20,000) (20,000)
more than one year
Provision for liabilities and charges -
(39)
--------- ---------
Total net assets
465,917 472,062
Cumulative preference stock (875)
(875)
--------- ---------
Assets attributable to the ordinary
shares 465,042 471,187
====== ======
Net asset value per ordinary share
after deducting
prior charges at par 261.0p 264.4p
* Restated for change in accounting policy (see note 2)
Notes:
1. SORP
As from 1 June 1996 the Company has adopted the
recommendations of the Statement of Recommended Practice
- "Financial Statements of Investment Trust Companies"
(the "SORP"). This has resulted in certain accounting
policy changes, the most significant of which is given in
note 2 below. In addition as recommended by the SORP, a
statement of total return is presented on page 3, which
combines the revenue account and statement of realised
and unrealised capital gains to give a "Total Return". A
separate revenue account is therefore no longer required.
2. Change in Accounting Policy
Dividends receivable from equity shares are taken to the
revenue account on an ex-dividend basis. This represents
a change from previous years when dividend income was
recognised on a due date basis. Income from fixed
interest debt securities is recognised on a time
apportionment basis and, if material, so as to reflect
the effective yield on these securities. Previously
income from fixed interest securities was recognised on a
due date basis.
The effect of this change on net revenue return on
ordinary activities after taxation for the current year
is nil (1996 decrease: #672,000) and to increase net
assets at 1 June 1996 by #770,000. The comparative
figures for the year ended 31 May 1996 have been restated
accordingly.
TR SMALLER COMPANIES INVESTMENT TRUST PLC
Unaudited Preliminary Group Results for the year ended 31 May
1997
3. Revenue returns per Share
Revenue returns per ordinary share are based on earnings
attributable to the ordinary shares of #7,398,000 (1996:
as restated: #8,938,000) and on the 178,200,000 shares in
issue during the two years ended 31 May 1997.
Capital returns per ordinary share are based on net
capital losses attributable to the ordinary shares of
#6,504,000 (1996: gain of #108,798,000) and on the
178,200,000 shares in issue.
4. Dividend
The recommended final dividend of 2.45p per share,
subject to approval at the Annual General Meeting, is
payable on 6 October 1997 to shareholders on the register
at the close of business on 9 September 1997.
5. 1997 Accounts
The preliminary figures for the year ended 31 May 1997
are an extract from the latest Group accounts. These
accounts have not yet been delivered to the Registrar of
Companies, nor have the auditors yet reported on them.
6. 1996 Accounts
The figures and financial information for the year ended
31 May 1996 are compiled from an extract from the latest
published accounts and do not constitute the statutory
accounts for that year. These accounts have been
delivered to the Registrar of Companies, and included the
report of the auditors which was unqualified and did not
contain a statement under either Section 237 (2) or
Section 237 (3) of the Companies Act 1985.
7. Annual General Meeting
Copies of the Report and Accounts will be posted to the
members in August 1997 and will thereafter be available
from the Secretary at 3 Finsbury Avenue, London EC2M 2PA.
The Annual General Meeting will be held at 11.30 am on
Friday 26 September 1997.
For further information please contact :
John Alexander
TR Smaller Companies Investment Trust PLC
Tel : 0171 410 4340
END
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