Govett Asian Smaller - Final Results
29 Fevereiro 2000 - 4:01AM
UK Regulatory
RNS Number:3285G
Govett Asian SmallerCo'sInv.Tst Ld
28 February 2000
Preliminary Announcement for Govett Asian Smaller Companies Investment Trust
Limited Unaudited results for the year ended 31st December 1999
Unaudited Statement of Total Return (incorporating the revenue account *) for
the year ended 31st December 1999
Year ended Year ended
31st December 1999 31st December 1998
US DOLLARS Revenue Capital Total Revenue Capital Total
$000s $000s $000s $000s $000s $000s
Realised & unrealised - 28,380 28,380 - (13,223)(13,223)
gains/(losses) on investments
Net foreign currency - (724) (724) - 504 504
exchange differences
Income from Investments 931 - 931 1,560 - 1,560
Deposit interest 69 - 69 400 - 400
Investment management fee (1,024) (1,024) (881) - (881)
Other (expenses)/income (455) (330) (785) (425) 24 (401)
Net return before finance (479) 27,326 26,847 654 (12,695) (12,041)
costs and taxation
Interest payable (218) - (218) (21) - (21)
Return on ordinary activities (697) 27,326 26,629 633 (12,695) (12,062)
before tax
Tax on ordinary activities (28) - (28) (79) 118 39
Return on ordinary activities (725) 27,326 26,601 554 (12,577) (12,023)
after tax attributable to equity
shareholders
Ordinary dividends - - - (375) - (375)
Final nil (1998: 1.00p)
Transfer to reserves (725) 27,326 26,601 179 (12,577) (12,398)
Return per Ordinary share (2.10)c 79.40c 77.30c 1.48c (33.54)c (32.06)c
*The revenue column of this statement represents the revenue account of the
Company.
Unaudited Statement of Total Return (incorporating the revenue account *) for
the year ended 31* December 1999
STERLING Year ended Year ended
31st December 1999 31st December 1998
Revenue Capital Total Revenue Capital Total
#000s #000s #000s #000s #000s #000s
Realised & unrealised - 17,540 17,540
gains/(losses) on investments - (7,947) (7,947)
Net foreign currency - (447) (447) - 303 303
exchange differences
Income from Investments 576 - 576 940 - 940
Deposit interest 43 - 43 241 - 241
Investment management fee (634) - (634) (531) - (531)
Other (expenses)/ income (282) (204) (486) (255) 14 (241)
Currency adjustment on 8 1,405 1,413 - (506) (506)
translation of balances
Net return before finance (289) 18,294 18,005 395 (8,136) (7,741)
costs and taxation
Interest payable (135) - (135) (13) - (13)
Return on ordinary activities (424) 18,294 17,870 382 (8,136) (7,754)
before tax
Tax on ordinary activities (17) - (17) (48) 71 23
Return on ordinary activities (441) 18,294 17,853 334 (8,065) (7,731)
after tax attributable to equity
shareholders
Ordinary dividends - - - (226) - (226)
Final nil (1998: 0.60p)
Transfer to reserves (441) 18,294 17,853 108 (8,065) (7,957)
Return per Ordinary share (1.28)p 53.15p 51.87p 0.90p (21.51)p (20.61)p
*The revenue column of this statement represents the revenue account of the
Company.
Average exchange rate for the year #1 = US$1.6139
SUMMARISED BALANCE SHEET - US DOLLARS 1999 1998
$000 $000
Investments at Valuation 69,194 66,494
Net Current Liabilities (1,949) (3,777)
Total Resources 67,245 62,717
Net Asset Value per share - US Dollars US$2.56 US$1.67
SUMMARISED BALANCE SHEET - STERLING 1999 1998
#000 #000
Investments at Valuation 42,761 39,965
Net Current Liabilities (1,204) (2,270)
Total Resources 41,557 37,695
Not Asset Value per share - sterling #1.58 #1.01
Exchange rate at 31 December 1999 #1 = US$1.618
The Chairman, Colin Black, commented:
1999 has been a dramatic and exceptional year for Asian equity markets. It
began with the region still mired in deep recession and reeling from the near
collapse of the international financial system in the third quarter of 1998.
However, as we close the book at the end of the 20th Century, Asia and Asian
companies have recovered strongly from the financial crisis and have regained
some of their former strength. In line with the economic recovery, Asian equity
markets have seen a reversal in market psychology from caution at the start of
the year to one of extreme bullishness at the close.
The general belief at the start of the year was that Asia could only recover
if it undertook widespread economic and corporate reforms. Admittedly, the huge
gains in Asian stock markets were in no way correlated to the rate and success
of these reforms, but were rather a bounce from very depressed levels on signs
that the regional economies are turning around. Nevertheless, over the past
year, some fundamental changes have taken place in Asia that will ensure that
the future will be very different from the past. Thailand's passage of the
bankruptcy and insolvency laws, China's entry into the WTO and the dismantling
of Daewoo in Korea are all encouraging examples of the way some of the problems
in Asia have been addressed. There has also been a sea change at the corporate
level where many Asian companies are now paying more attention to creating
shareholder value, adhering to the highest standards of corporate governance and
naming their businesses along economic value added lines.
Against this encouraging market background, we are pleased to report that the
Trust's net asset value rose by 58% in sterling terms over the year. This
compares favourably to a rise of 39% in sterling terms on the SocGen Crosby
Asian Smaller Companies Index in 1999.
You will recall that on 27th August 1999, your Board announced a tender offer
whereby Shareholders could realise up to 35% on their holding at a discount to
net asset value of 12%. 30% of the shares (11,250,075 shares) were to be
purchased and cancelled by the Trust and 5% (1,875,012 shares) were to be
purchased by Allied Irish Banks, p.l.c. or funds under its management.
In the event, Shareholders tendered in total 24,010,746 shares, 64% of the
original share capital. Tenders in excess of the basic entitlement were
satisfied as to 24.10% of the excess tenders. The net asset value at the close
of business on 22nd September 1999, the calculation date, was US$2.23 per share
and the tender offer price was, therefore, US$1.962 or #1.193 per share.
Looking forward to 2000, we believe the Asian economies are entering a new
growth phase which goes beyond simple recovery from the crisis. While the
rebound in 1999 was powered by the return of domestic confidence (as currencies
stabilised, interest rates fell, and the external environment improved sharply),
a broader set of growth dynamics are emerging to sustain Asia's economic
recovery m the next few years.
First the global economic environment favours Asia's recovery. The economies
of Japan and Europe, in particular, are expected to strengthen, driven by
falling unemployment and a related pickup in consumer confidence. This should
lead to increased trade with Asia as well as more capital inflow in the form of
foreign direct investment (FDI) and enhanced lending activity in Asia by foreign
banks. In addition, as growth recovers in the region, intra-regional trade will
also pick up and will allow positives in one country to feed into positives in
another, producing a virtuous circle of growth in the region.
Second, economic and corporate reforms have brought about a shift in the way
business is conducted in Asia. At the governmental level, on-going deregulation
and other policy changes are lowering entry barriers and opening up new
business opportunities. At the corporate level, companies are responding to the
more competitive post-crisis environment by carrying out aggressive operational
and financial restructuring. All these measures, together with the sharp
devaluation of the regional currencies, will result in lower overall business
cost structure in Asia and enhance the prospects of further economic recovery.
Third, the increased emphasis on E-commerce is changing the operating behaviour
of companies in the developed world and will have far-reaching consequences for
Asian economics. Cost deflation in the internet economy will require companies
in the developed world to look for lower cost manufacturing and service centres,
and there are already firm indications that Asia is in a strong position to play
that supporting role.
Last but not least, we expect regional interest rates to remain stable or even
decline in most countries due to accommodative macro policy, excess liquidity in
banking systems, little domestic on pressure and excess capacity in
domestically-oriented industry. If central banks need to tighten policy on the
back of higher US interest rates, we believe this would be accommodated via an
appreciation of exchange rates as regional currencies are still cheap relative
to pre-crisis levels and exporters can withstand currency appreciation from
current levels.
Given the positive economic outlook for Asia, we are optimistic that regional
equity markets will continue to do well in 2000. As the 1999 market rally was
led by bigger-capitalised stocks, smaller companies in Asia have lagged the
broad market move and, as a group, are beginning to offer better relative
valuations than their larger counterparts. We believe that amongst these, the
stocks that are fundamentally sound will benefit from the improved regional
economic environment. The Trust's primary objective remains to be the
acquisition of stocks on a selective basis.
After 5 years as Chairman, and having recently reached the age of 70, I feel it
right to retire as Chairman and Director of the Trust with effect from the AGM
on 5 May. The board has resolved to appoint Peter Robertson as Chairman in my
place. He has had a number of years of experience in Asian markets and I am
pleased to leave the Trust in his capable hands.
The Annual General Meeting of the Trust will be held at 12 noon on 5th May 2000
at the offices of our Manager, AIB Govett Asset Management Limited, Shackleton
House, 4 Battle Bridge Lane, London, SEI 2HR. We look forward to meeting
shareholders at the AGM, which will be followed by a brief presentation and a
buffet luncheon.
The Board do not recommend a final dividend for the year ended 31 December 1999.
The Trust's annual report and accounts will be sent to shareholders in March
2000. Copies will be available to the public at the registered office of the
Trust, AIB House, Grenville Street, St Helier, Jersey and at the offices of the
Assistant Secretary as shown below.
The figures for 1998 are extracted from the statutory accounts for the year
ended 31 December 1998 which have been delivered to the Registrar of Companies
and on which the auditors have made an unqualified report under the Companies.
(Jersey) Law 1991.
This preliminary statement is not the Trust's statutory accounts for the year
ended 31st December 1999. The statement of total return and balance sheet are
extracts from these accounts, which have not yet been delivered to the Registrar
of Companies.
By order of the Board
Shackleton House AIB Grovett Secretaries Limited
4 Battle Bridge Line Assistant Secretary
London SEI 2HR Registered in Jersey no: 45906
28th February 2000
END
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