|
TIDMSST
RNS Number : 2937A
Scottish Oriental Smlr Co Tst PLC
28 March 2012
THE SCOTTISH ORIENTAL SMALLER COMPANIES TRUST PLC
Interim results for the six months to 29th February 2012
(Extracted from the Interim Report)
The Board of The Scottish Oriental Smaller Companies Trust plc is pleased to announce the results for the six months to 29(th) February 2012.
Financial Highlights
Performance for the six months to 29th February 2012
(Unaudited)
------------------------------------------------------------------
MSCI AC Asia ex Japan
Net Asset Value 4.7% Index (GBP) 7.4%
MSCI AC Asia ex Japan
Share Price 5.8% Small Cap 1.7%
Index (GBP)
FTSE All-Share Index
(GBP) 10.3%
Summary Data at 29th February 2012 (Unaudited)
Shares in issue 30,213,650 Shareholders' Funds GBP195.7m
Net Asset Value 647.8p Market Capitalisation GBP191.9m
per share
Share Price Discount
Share Price 635.0p to Net Asset Value 2.0%
----------------- ----------- ---------------------- ----------
Total return (capital return with dividends reinvested)
Corporate Objective
The investment objective of The Scottish Oriental Smaller Companies Trust plc ("Scottish Oriental", "the Company" or "the Trust") is to achieve long-term capital growth by investing in mainly smaller Asian quoted companies with market capitalisations of below US$1,000m, or the equivalent thereof, at the time of investment. For investment purposes, the Region includes the Indian sub-continent but excludes Japan and Australasia.
This is an abridged version of Scottish Oriental's investment policy and objective. A full statement of Scottish Oriental's investment policy can be found on page 3 of the Annual Report and Accounts for the year ending 31(st) August 2011 (the "Annual Report and Accounts").
Principal Risks and Uncertainties
Given the nature of its investment activities, the principal risks that Scottish Oriental faces from its financial instruments are market prices (comprising interest rate, currency and share price risks) and credit risk. The principal risks and uncertainties have not changed since the publication of the Annual Report and Accounts. A detailed explanation of these risks and how they are managed is set out in Note 16 on pages 43-45 of the Annual Report and Accounts. As Scottish Oriental's assets mainly comprise readily realisable securities, other than in exceptional circumstances there should be no significant liquidity risk. Scottish Oriental's investment portfolio is exposed to market price fluctuations and currency fluctuations which are monitored by the Investment Manager. Scottish Oriental does not invest in either fixed or floating rate securities and interest rate risk exposure is restricted to interest receivable on bank deposits or payable on bank overdraft positions which will be affected by fluctuations in interest rates.
Directors' Responsibility Statement
The Directors are responsible for preparing the half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:
(a) the condensed set of financial statements within the half-yearly financial report, prepared in accordance with the Accounting Standards Board's statement 'Half-Yearly Financial Reports' gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
(b) the Interim Management Report includes a fair review of the information required by 4.2.7R of the Financial Services Authority's Disclosure and Transparency Rules (important events that have occurred in the first six months of the Company's financial year, together with their effect on the half yearly financial statements to 29(th) February 2012 and a description of the principal risks and uncertainities for the remaining six months of the financial year). 4.2.8R requires information on related party transactions. No related party transactions have taken place during the first six months of the financial year that have materialy affected the financial position of the Company during that period and there have been no changes in the related party transactions described in the last annual report that could do so.
The half-yearly report, for the six months to 29(th) February 2012, comprises the Interim Management Report, the Directors' Responsibility Statement and a condensed set of financial statements and has not been audited or reviewed by auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.
By order of the Board
James Ferguson
Chairman
28(th) March 2012
Interim Management Report
Investment Performance
In the six months ending 29th February 2012, Scottish Oriental's net asset value per share rose by
4.7 per cent to 647.8p. This compares with a sterling-adjusted increase of 7.4 per cent in the MSCI AC Asia Free (ex Japan) Index and a rise of 1.7 per cent in the MSCI AC Asia (ex Japan) Small Cap Index. The Trust's share price also increased by 5.8 per cent over the period and the discount
to net asset value was 2.0 per cent on 29th February 2012. The Trust underperformed the FTSE All-Share Index, which rose by 10.3 per cent over the six month period.
Scottish Oriental had borrowings of $32.5 million (GBP20.4 million), equivalent to 10.4 per cent of net asset value, as at the 29th February 2012. In addition, the Trust had cash of GBP22.7 million resulting in a net cash position which represented 1.2% of net assets at the end of the period. The Manager will continue to invest this money gradually once suitable long term investment opportunities have been identified.
Review
Asian stockmarkets experienced a period of volatile performance in the six months ending 29th February 2012. The market declines that took place towards the end of 2011 were offset by the strong rally which followed in January and February. The key negative remained the on-going debt crisis in Europe and the potential insolvency of its banking sector. However, this was partially offset by evidence of a modest recovery in the US economy. Unfortunately this was insufficient to avoid a slowdown in Asia's economic growth rates and a decline in expectations for corporate earnings.
Indonesia was the worst performing market in the Region, failing to participate in the recent rally owing to concerns over the impact on inflation from the forthcoming rise in subsidised fuel prices.
The Philippines achieved strong returns supported by signs that the much needed investment in the Country's infrastructure was finally taking place. Thailand also performed well owing to expectations of strong economic recovery and an increase in private sector investment following last year's devastating floods.
Asian smaller companies generally underperformed their larger counterparts with declines in a
number of markets including India and South Korea.
Outlook
The short term outlook for Asia remains uncertain as economic growth is expected to slow owing to weak external demand from Europe and the US while growth in domestic consumption is likely to be curtailed by the higher cost of living. A sustained rise in oil prices is generally bad news for Asia resulting in either higher inflation or greater Government expenditures depending on a country's policy towards fuel subsidies. Most Central Banks would be forced to tighten monetary policy in the event of a sustained rise in inflation. Higher interest rates at a time of slowing economic growth could result in lower than expected corporate earnings and a further downward revision to analysts' forecasts.
However, the longer term prospects for the Region's equity markets remain encouraging supported
by improvements in corporate governance and the emergence of a dividend culture. Scottish Oriental's investment philosophy is well suited to the current stockmarket volatility given its focus on well managed, financially sound companies.
Dividend
A dividend of 9.0p per share was paid on 10th February 2012 for the year ending 31st August 2011 (31st August 2010: 8.5p per share). It is too early to make a forecast of the distribution for the current financial year.
Income Statement for the six months to 29(th) February 2012
Six months to 29th Six months to 28th
February February
2012 2011
(unaudited) (unaudited)
Revenue Capital Total* Revenue Capital Total*
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- --------- --------- ---------
Gains on investments - 11,981 11,981 - 12,450 12,450
Income from investments 1,889 - 1,889 1,086 - 1,086
Other income 1 - 1 20 - 20
Investment management
fee (694) (904) (1,598) (723) - (723)
Currency (losses)/gains - (219) (219) - 74 74
Other administrative
expenses (213) - (213) (225) - (225)
--------- --------- --------- --------- --------- ---------
Net return before
finance costs and
taxation 983 10,858 11,841 158 12,524 12,682
Finance costs of
borrowing (230) - (230) (1) - (1)
--------- --------- --------- --------- --------- ---------
Net return on ordinary
activities before
taxation 753 10,858 11,611 157 12,524 12,681
Tax on ordinary
activities (62) - (62) (51) - (51)
--------- --------- --------- --------- --------- ---------
Net return attributable
to equity
shareholders 691 10,858 11,549 106 12,524 12,630
--------- --------- --------- --------- --------- ---------
Net return per
ordinary share
(p) 2.29 35.94 38.23 0.35 41.45 41.80
Year ended 31st
August
2011
(audited)
Revenue Capital Total*
GBP'000 GBP'000 GBP'000
--------- --------- ---------
Gains on investments - 20,237 20,237
Income from investments 5,696 - 5,696
Other income 30 - 30
Investment management
fee (1,452) (2,405) (3,857)
Currency gains - 470 470
Other administrative
expenses (461) - (461)
--------- --------- ---------
Net return before
finance costs and
taxation 3,813 18,302 22,115
Finance costs of
borrowing (18) (54) (72)
Net return on ordinary
activities before
taxation 3,795 18,248 22,043
Tax on ordinary
activities (352) - (352)
--------- --------- ---------
Net return attributable
to equity
shareholders 3,443 18,248 21,691
--------- --------- ---------
Net return per
ordinary share
(p) 11.39 60.40 71.79
* The total column of this statement is the Profit and Loss Account of the Company.
A Statement of Total Recognised Gains or Losses has not been prepared as any gains or losses are recognised in the Income Statement.
All revenue and capital items derive from continuing operations.
Balance Sheet as at 29(th) February 2012
At 29th At 28th At 31st
February February August 2011
2012 2011
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
EQUITY INVESTMENTS
China 31,359 25,252 29,021
Hong Kong 19,889 19,135 16,691
India 2,642 2,198 2,764
Indonesia 9,640 13,365 10,147
Malaysia 18,136 15,986 15,724
Philippines 8,477 6,612 7,701
Singapore 33,039 23,626 26,843
South Korea 22,206 17,245 24,727
Sri Lanka 3,309 1,429 2,871
Taiwan 26,890 25,799 23,434
Thailand 14,572 16,700 15,691
Vietnam 3,290 2,103 1,935
------------- ------------- -------------
Total equities 193,449 169,450 177,549
Net current assets 22,689 8,377 29,299
------------- ------------- -------------
Total Assets less
Current Liabilities 216,138 177,827 206,848
CREDITORS (due after
one year)
Loan (20,420) - (19,960)
------------- ------------- -------------
Equity Shareholders'
Funds 195,718 177,827 186,888
CAPITAL AND RESERVES
Ordinary share capital 7,554 7,554 7,554
Share premium account 21,337 21,337 21,337
Warrant reserve -
exercised 1,319 1,319 1,319
Capital reserve 160,361 143,779 149,503
Revenue reserve 5,147 3,838 7,175
------------- ------------- -------------
195,718 177,827 186,888
============= ============= =============
Net asset value per
share 647.78p 588.57p 618.56p
Cash Flow Statement for the six months to 29th February 2012
Six months Six months Year to
to to
29th February 28th February 31st August
2012 2011 2011
(uaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
OPERATING ACTIVITIES
Dividends received
from investments 2,504 1,589 5,594
Other income 1 10 64
-------------- -------------- ------------
2,505 1,599 5,658
Investment management
fee (681) (710) (1,305)
Secretarial fee (49) (26) (84)
Directors' fees (37) (46) (79)
Other expenses paid (132) (196) (344)
-------------- -------------- ------------
Net cash inflow from
operating activities 1,606 621 3,846
RETURNS ON INVESTMENTS
AND SERVICING OF
FINANCE
Loan drawn down - - 19,813
Arrangement fees (20) - (34)
Interest paid on
borrowings (228) (1) -
-------------- -------------- ------------
Net cash (outflow)/
inflow from investments
and servicing of
finance (248) (1) 19,779
TAXATION
Total tax paid (68) (44) (453)
CAPITAL EXPENDITURE
AND FINANCIAL INVESTMENT
Purchases of investments (24,198) (26,383) (58,354)
Sales of investments 20,524 24,899 56,742
Currency gains 241 74 623
Performance fee (2,405) - (937)
-------------- -------------- ------------
Net cash outflow
from capital expenditure
and financial investment (5,838) (1,410) (1,926)
EQUITY DIVIDEND PAID (2,719) (2,568) (2,568)
(Decrease)/increase
in cash (7,267) (3,402) 18,678
============== ============== ============
Reconciliation of Movements in
Shareholders' Funds
For the period ended 29(th)
February 2012
Warrant
Share Share Reserve Capital Revenue
Capital Premium Exercised Reserve Reserve Total
Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------- --------- ----------- --------- ---------- ---------
Balance at
31st August
2011 7,554 21,337 1,319 149,503 7,175 186,888
-------------------- ---------- --------- ----------- --------- ---------- ---------
Realised gains
on investments - - - 6,844 - 6,844
Currency loss - - - (219) - (219)
Unrealised
appreciation
on investments
in the period - - - 5,137 - 5,137
Performance
fee - - - (904) - (904)
Income retained
in the period - - - - 691 691
Dividend paid
in the period - - - - (2,719) (2,719)
-------------------- ---------- --------- ----------- --------- ---------- ---------
Balance at
29th February
2012 7,554 21,337 1,319 160,361 5,147 195,718
-------------------- ---------- --------- ----------- --------- ---------- ---------
Reconciliation of Movements in
Shareholders' Funds
For the year ended 31st
August 2011
Share Warrant
Share Premium Reserve Capital Revenue
Capital Account Exercised Reserve Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- --------- --------- ----------- ---------- --------- ----------
Balance at
31st August
2010 7,554 21,337 1,319 131,255 6,300 167,765
----------------- --------- --------- ----------- ---------- --------- ----------
Realised gains
on investments - - - 30,867 - 30,867
Currency gain - - - 470 - 470
Unrealised
depreciation
on investments
in the year - - - (10,630) - (10,630)
Performance
fee - - - (2,405) - (2,405)
Finance costs
of borrowing - - - (54) - (54)
Income retained
in the year - - - - 3,443 3,443
Dividend paid
in the year - - - - (2,568) (2,568)
----------------- --------- --------- ----------- ---------- --------- ----------
Balance at
31st August
2011 7,554 21,337 1,319 149,503 7,175 186,888
----------------- --------- --------- ----------- ---------- --------- ----------
Notes to Accounts
(1) The position as at 31(st) August 2011 is an abridged version of that contained in the full accounts for that year, which received an unqualified audit report and which have been filed with the Registrar of Companies. This interim report has been prepared under the same accounting policies adopted for the year to 31(st) August 2011.
(2) Dividends
At At At
29(th) 28(th) 31(st)
February February August
2012 2011 2011
GBP'000 GBP'000 GBP'000
Amounts recognised as distributions
in the period:
Dividend for the year ending
31(st) August 2011 of 9.0p (2010
- 8.5p) paid 10(th) February
2012 2,719 2,568 2,568
---------- ---------- ---------
(3) Performance Fee
Under the terms of the Investment Management Agreement, an annual performance fee may be payable to the Investment Manager at the end of the year. A detailed explanation of the performance fee computation is set out on page 21 of the Annual Report and Accounts.
Assuming no change in share price, MSCI AC Asia Free ex Japan Index Total Return and shares in issue between 29(th) February and 31(st) August 2012, the estimated performance fee for the year ending 31(st) August 2012 would amount to GBP1,808,000. An amount of GBP904,000 has been accrued in the six months to 29(th) February 2012.
-- The terms of the interim report and this announcement were approved by the Board on 28(th) March 2012.
-- Copies of the Interim Report will be posted to shareholders shortly and will be available thereafter on the Company's website: www.scottishoriental.com and from the registered office at 10 St Colme Street, Edinburgh EH3 6AA.
Enquiries:
Personal Assets Trust Administration Company Limited, Edinburgh, +44 (0)131 538 6610
28(th) March 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EVLFLLXFXBBL
| 
