Final Results
22 Julho 2003 - 12:13PM
UK Regulatory
RNS Number:8319N
Dresdner RCM Endwmt PlcyTst 2010PLC
22 July 2003
For immediate release 22nd July 2003
DRESDNER RCM ENDOWMENT POLICY TRUST 2010 plc
PRELIMINARY ANNOUNCEMENT OF RESULTS
For the year ended 30th June 2003
A summary of the results for the year ended 30th June 2003 is set out below.
Net Asset Value
The net asset value per ordinary share has decreased from 129.2p at 30th June
2002 to 96.5p per ordinary share at 30th June 2003. This represents a decline of
25.3% over the last twelve months. Calculations of net asset value reflect
estimated market values of policies, based wherever possible on recent auction
transactions and otherwise by reference to surrender values.
Projected final net asset values
Projected final net asset values as at 30th June 2003 are given in the table
below.
100% Current 80% Current 50% Current No Further
Bonus Rates Bonus Rates Bonus Rates Bonuses
Projected final net 156.3p 140.2p 117.5p 81.3p
Asset value at
31st December 2010
Projected final net asset values are calculated using the bases and assumptions
set out overleaf. These illustrations are given to provide an indication of the
sensitivity of the projected final net asset value to bonus rate changes. They
should not be taken as forecasts of particular degree of change in rate levels.
Investment Review
The Company has investments in policies valued at #28.7 million from a total of
45 with-profits life funds and net borrowings (after adjusting for fixed
interest investments and cash) of #5.1m. During the twelve months to 30th June
2003 the Company received proceeds of policy maturities amounting to #2.3
million. The average annualised return on these policies was 6.2% since purchase
excluding demutualisation proceeds.
The environment for life company 'with profits' funds remains challenging. Stock
markets have been volatile throughout this period, exposing the risks involved
in 'with profits' savings products which combine significant guaranteed elements
with relatively high equity backing. The first response of life companies has
been to reduce bonuses in an attempt to bring policy maturities more in line
with asset share and to protect their solvency position. The extent of these
bonus rate cuts has been greater in this period than in the past, reflecting the
limited ability of life companies to smooth returns when solvency requirements
have become paramount. Additionally, adjustments to bonus rates - hitherto
previously an annual event - have become far more frequent.
The Financial Services Authority has played an important role in maintaining
confidence in the sector through proposing the future adoption of a more
realistic solvency regime, and allowing stronger offices to apply for waivers to
the existing minimum solvency requirements to alleviate the need to sell
equities in depressed markets. Nonetheless, many of the larger life companies
have significantly reduced their 'with profits' equity exposure over this period
and some weaker offices have followed Equitable Life in largely eliminating
their remaining equity exposure. The medium-term outlook for these funds looks
unattractive, but policyholders are being discouraged from withdrawing their
investments and Market Value Adjusters are being applied. The Company's
portfolio is weighted towards the financially strong life companies and less
than 1% of the portfolio is held in companies which have reduced their equity
exposure to negligible levels.
Share Buy Backs and Borrowings
A number of policies were disposed of during the twelve months under review,
realising #1.47m. Overall, the weighted average return on these policies on
disposal was 7.8%.
The proceeds of these disposals have been used partly to repay debt and partly
to fund the repurchase of 250,000 Ordinary Shares for cancellation. Net of fixed
interest securities and cash, borrowings represented 21.3% of total net assets
at 30th June 2003.
The Board intends to seek renewed authority from shareholders to buy back up to
15% of the issued share capital of the Company.
Earnings and Dividend
The Company is managed with the objective of providing returns to investors
entirely in the form of capital. The continuing deficit on the Revenue Reserve
is consistent with this objective. Consequently, no dividend will be payable for
the current year.
Status
The Company operates as an approved investment trust within the meaning of
Section 842 of the Income and Corporation Taxes Act 1988. The Company has been
approved by the Inland Revenue as an approved investment trust company for the
period ended 30th June 2002. Such approval is expected to be granted for the
current accounting year. The Company is not a close company.
Annual General Meeting
The Annual General Meeting will be held on Wednesday 22nd October 2003 at
12.45pm.
155 Bishopsgate By Order of the Board
London EC2M 3AD P W I Ingram
Company Secretary
Enquiries:
For further information please contact:
Allianz Dresdner Asset Management (UK) Limited
Simon White, Head of Investment Trusts
Tel: 020 7065 1539
PRINCIPAL BASES AND ASSUMPTIONS USED IN PROJECTING THE FINAL NET ASSET VALUE
The final net asset value has been calculated at 31st December 2010, on the
basis that:
1) All policies are held to maturity, no death claims arise and no
further purchases or disposals of policies are made.
2) The latest reversionary and terminal bonus rates declared at 30th
June 2003 continue to apply until maturity or are reduced immediately by
20%, 50% and 100%.
3) The estimated mid-market gross redemption yields as at 30th June
2003, for policies of differing remaining terms, are assumed to remain
unchanged.
4. Annual expenses are assumed to be in line with recent experience and future
annual inflation is assumed to be 3%. Interest rates over the Company's life
are assumed to be consistent with the shape of the swap yield curve at 30th
June 2003.
5. No shares are issued or repurchased or dividends paid.
DRESDNER RCM ENDOWMENT POLICY TRUST 2010 plc
SUMMARY OF UNAUDITED RESULTS
STATEMENT OF TOTAL RETURN
For the year ended 30th June 2003 Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (7,347) (7,347)
Income from fixed asset investments 117 - 117
Other income 13 - 13
Management and advisory fees (489) - (489)
Expenses of administration (126) - (126)
Return on ordinary activities
before finance costs and taxation (485) (7,347) (7,832)
Finance costs of borrowings (359) - (359)
Return on ordinary activities before
taxation (844) (7,347) (8,191)
Taxation - - -
Transfer from reserves (844) (7,347) (8,191)
Return per Ordinary Share (3.42)p (29.78)p (33.20)p
The return per Ordinary Share is based on a weighted average number of Shares in
issue of 24,672,877.
*The revenue column of this statement is the profit and loss account of the
Company.
NET ASSET STATEMENT
as at 30th June 2003
#'000s
Valuation of investments 30,779
Net current assets 181
30,960
Loan repayable after more than one year (7,200)
Total Net Assets 23,760
Called up Share Capital 246
Share Premium Account 4,750
Capital Redemption Reserve 4
Special Reserve 19,689
Capital Reserve : Realised 2,801
: Unrealised 659
Revenue Reserve (4,389)
Shareholders' Funds 23,760
Net asset value per Ordinary Share 96.5p
The net asset value is based on 24,625,000 Ordinary Shares in issue
STATEMENT OF TOTAL RETURN
For the year ended 30th June 2002 Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (515) (515)
Income from fixed asset investments 79 - 79
Other income 2 - 2
Management and advisory fees (592) - (592)
Expenses of administration (174) - (174)
Return on ordinary activities
before finance costs and taxation (685) (515) (1,200)
Finance costs of borrowings (430) - (430)
Return on ordinary activities before taxation (1,115) (515) (1,630)
Taxation - - -
Transfer from reserves (1,115) (515) (1,630)
Return per Ordinary Share (4.47)p (2.07)p (6.54)p
The return per Ordinary Share is based on a weighted average number of Shares in
issue of 24,913,630.
*The revenue column of this statement is the profit and loss account of the
Company.
NET ASSET STATEMENT
as at 30th June 2002
#'000s
Valuation of Investments 40,299
Net current liabilities (362)
39,397
Loan repayable after more than one year (7,800)
Total Net Assets 32,137
Called up Share Capital 249
Share Premium Account 4,750
Capital Redemption Reserve 1
Special Reserve 19,875
Capital Reserves : Realised 1,932
: Unrealised 8,875
Revenue Reserve (3,545)
Shareholders' Funds 32,137
Net asset value per Ordinary Share 129.2p
The net asset value is based on 24,875,000 Ordinary Shares in issue
CASH FLOW STATEMENT
For the years ended 30th June 2003 and 2002
2003 2003 2002
#'000s #'000s #'000s
Net cash outflow from operating activities (526) (662)
Servicing of finance
Interest paid (353) (428)
Taxation
Income tax repaid - 2
Investing activities
Purchase of investments (2,609) (1,780)
Receipts from demutualisations - 798
Sale of investments 4,782 2,241
Net cash inflow from investing activities 2,173 1,259
Net cash inflow before financing 1,294 171
Financing
Decrease in bank loan (600) (720)
Purchase of Ordinary Shares for cancellation (186) (125)
Net cash outflow from financing (786) (845)
Increase (decrease) in cash 508 (674)
ANALYSIS OF INVESTED FUNDS
TWENTY LARGEST HOLDINGS BY LIFE OFFICE
AS AT 30TH JUNE 2003
Life Office Value of policies % of
#000s total investment
Standard Life 7,744 25.2
Legal & General 7,380 24.0
Friends Provident 2,954 9.6
Scottish Provident 2,548 8.3
AVIVA (Norwich Union) 1,547 5.0
Scottish Widows 1,497 4.9
Scottish Life 1,062 3.4
Prudential 552 1.8
AVIVA (Commercial Union) 544 1.8
Prudential (Scottish Amicable) 378 1.2
Eagle Star 317 1.0
Clerical Medical 306 1.0
National Mutual 264 0.9
Royal & Sun Alliance (Royal Life) 215 0.7
NEL Britannia 158 0.5
Irish Life 151 0.5
Colonial 135 0.4
Friends Provident (UKPI) 108 0.3
Scottish Mutual 95 0.3
Alba Life (Crusader) 79 0.3
Total of twenty largest holdings 28,034 91.1
Holdings in other offices 666 2.2
Total holdings of endowment policies 28,700 93.3
LISTED EQUITY HOLDINGS
AS AT 30TH JUNE 2003
% of
#000s total investment
Friends Provident 103 0.3
103 0.3
FIXED INTEREST HOLDINGS
AS AT 30TH JUNE 2003
% of
#000s total investment
EIB 5.5% Bd 7.12.11 536 1.8
EIB 4.25% Bd 7.12.10 782 2.5
Finland (REP) 9.375% 3.02.10 658 2.1
1,976 6.4
Total of Invested Funds 30,779 100.0
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the periods ended 30th June 2003 or 30th June
2002. The preliminary announcement has been prepared on the same basis as the
previous year's financial statements. The financial information for the year
ended 30th June 2002 is derived from the statutory accounts for that year which
have been delivered to the Registrar of Companies. The auditors reported on
those accounts; their report was unqualified and did not contain a statement
under section 237(2) or (3) of the Companies Act 1985. The statutory accounts
for the year ended 30th June 2003 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 following the
Company's Annual General Meeting.
DEPT2010/Announcements/Preliminary Announcement July 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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