Half Year Results
25 August 2001 - 1:44AM
UK Regulatory
RNS Number:0236J
Govett Asian SmallerCo'sInv.Tst Ld
24 August 2001
Preliminary Announcement for Govett Asian Smaller Companies Investment Trust
Limited
Unaudited results for the 6 months ended 30th June 2001
CHAIRMAN'S STATEMENT
The first six months of financial year 2001 continued to be challenging for
Asian stock markets. Although Asian stocks had an impressive rebound in the
first two months of the year, they retreated sharply in the subsequent months
on concerns over persistent profit warnings from major US technology
companies and the impact of a weakening US economy on Asia's export-led
growth. Compounding the weak market sentiment was renewed weakness in most
Asian currencies, which fell in tandem with the sliding Yen. Notwithstanding
the weak market sentiment, smaller companies in Asia have been generally
resilient and have performed better than their larger counterparts, driven by
retail-led interest towards smaller issues in China, Hong Kong and South
Korea.
Against this difficult market background, your Company's net asset value rose
by 5.7% in sterling terms over the 6 months to 30 June 2001. This compares
with a rise of 16.77% in sterling terms in the SG Asian Smaller Companies
Index and a rise of 2.38% on the MSCI Asia Pacific ex Japan Index for the
same period.
While the gloom over Asia's economic prospects has intensified in recent
months, we maintain the view that a mild recovery in the broader US economy
is likely over the next twelve months. This is a pre-requisite to the
recovery of Asia, where most of the economies are highly dependent on
external demand. We are also encouraged by anecdotal evidence that more Asian
companies are responding constructively to changes in the competitive
environment, such as relocating production, moving up the value chain and
downsizing to cut costs. At the governmental level, we also expect more
aggressive policy measures, including industry deregulation, competitive
depreciation, and a further easing of monetary and fiscal policies.
In June 2001, an Extraordinary General Meeting was held at which shareholders
defeated an unwelcome resolution put by Regent Europe (now Charlemagne
Capital) to liquidate your Company. As stated in the circular to
shareholders, your Board is seeking to improve the attractiveness of your
Company by establishing a more active share buy back programme, supporting
the Manager's marketing efforts and limiting the total expense ratio of the
Company to no more than 2.2% of the average net assets. Regrettably, the
latter will be more difficult to achieve as a consequence of dealing with
Regent Europe's requisition. Your Board remains committed to proposing a vote
to continue the Company within three years of the posting of the Circular.
Shareholders will be aware that the accounts of the Company have historically
been expressed in both US dollars and pounds sterling. On this occasion, we
have only published figures in pounds sterling. Subject to shareholders'
views, we shall continue this policy in future.
Until a clearer outlook for the global economy emerges your Company will
continue to adopt a cautious and selective approach towards Asian stocks.
Peter Robertson
Chairman
24 August 2001
Unaudited Statement of Total Return (incorporating the revenue account *) for
the 6 months ended 30th June 2001
Sterling 6 months ended 6 months ended
30th June 2001 30th June 2000
Revenue Capital Total Revenue Capital Total
#000s #000s #000s #000s #000s #000s
Realised & Unrealised - (238) (238) - (3,608)(3,608)
losses on investments
Net foreign currency - 34 34 - 196 196
exchange differences
Income from investments 431 - 431 432 - 432
Deposit interest 17 - 17 13 - 13
Investment management fee (64)(156) (220) (389) - (389)
Other expenses (118) (10) (128) (194) (41) (235)
Currency adjustment on
retranslation of balances (43) 1,832 1,789 (23) 2,877 2,854
Net return before finance 223 1,462 1,685 (161) (576) (737)
costs and taxation
Interest payable (20) - (20) (167) - (167)
Return on ordinary 203 1,462 1,665 (328) (576) (904)
activities before tax
Tax on ordinary activities (21) - (21) (5) - (5)
Return on ordinary 182 1,462 1,644 (333) (576) (909)
activities after tax
Return per ordinary share 0.69p 5.57p 6.26p (1.27)p (2.20)p (3.47)p
Sterling Year ended
31st December 2000
Revenue Capital Total
#000s #000s #000s
Realised & Unrealised - (15,623) (15,623)
losses on investments
Net foreign currency - (56) (56)
exchange differences
Income from investments 734 - 734
Deposit interest 58 - 58
Investment management fee (708) - (708)
Other expenses (360) (72) (432)
Currency adjustment on
retranslation of balances (23) 3,476 3,453
Net return before finance (299) (12,275) (12,574)
costs and taxation
Interest payable (196) - (196)
Return on ordinary (495) (12,275) (12,770)
activities before tax
Tax on ordinary activities (44) (25) (69)
Return on ordinary (539) (12,300) (12,839)
activities after tax
Return per ordinary share (2.05)p (46.86)p (48.91)p
*The revenue column of this statement represents the revenue account of the
Company.
Average exchange rates for the 6 months to 30th June 2001 US$1.4305 (30th
June 2000 US$1.56135), full year to 31st December 2000 US$1.5135
Balance Sheet 31st December
As at 30th June 2001 30th June 2001 30th June 2000 2000*
#000s #000s #000s
Assets employed
Fixed assets -
investments
Quoted - overseas 30,120 37,472 25,761
Unquoted - overseas 239 381 221
Total investments 30,359 37,853 25,982
Current assets
Stock market - 267 278
settlements
Taxation recoverable 57 82 108
Other debtors 95 30 224
152 379 610
Cash at bank 958 3,680 2,248
1,110 4,059 2,858
Creditors: amounts
falling due within one
year
Bank loans (995) (1,057) -
Stock market (9) (21) -
settlements
Other creditors (103) (187) (122)
(1,107) (1,265) (122)
Net current assets 3 2,794 2,736
Total assets less 30,362 40,647 28,718
current liabilities
Financed by
Capital and Reserves
Called-up share capital 165 165 165
Share premium account 33,060 33,060 33,060
Other Reserves
Capital redemption 68 68 68
reserve
Capital reserve - 3,194 3,035 924
realised
Capital reserve - (5,560) 4,860 (4,752)
unrealised
Revenue reserve (565) (541) (747)
Equity shareholders' 30,362 40,647 28,718
funds
Net Asset Value per 115.66p 154.85p 109.40p
share
Exchange rate at 30th June 2001 US$1.4063 (30th June 2000 US$1.5139)
(31st December 2000 US$1.4938)
* The Balance Sheet as at 31st December 2000 and the Statement of Total
Return for the year then ended are an abridged version of the Company's full
statutory accounts which have been filed with the Registrar of Companies; the
auditors' opinion on these accounts was unqualified.
Cash Flow Statement 31st December
For the 6 months ended 30th June 2001 30th June 2000 2000*
30th June 2001
#000s #000s #000s
Operating activities
Cash received from 376 440 737
investments
Interest received 17 13 58
Investment management (93) (381) (843)
fees paid
Director's fees paid (36) (14) (51)
Other net cash 110 (164) (544)
receipts/(payments)
Net cash inflow/(outflow) 374 (106) (643)
from operating activities
Returns on investments
and servicing of finance
Interest paid (20) (186) (222)
Taxation
Taxation received/(paid) 30 15 (94)
Investment activities
Purchase of investments (16,745) (20,232) (29,888)
Sales of investments 14,005 24,111 34,326
Foreign exchange 192 26 27
differences arising on
settlement of trades *
Sundry capital items (142) (41) (72)
Net cash (outflow)/inflow (2,690) 3,864 4,393
from investing activities
Equity dividend paid - - -
Financing
Increase/(decrease) in 995 (982) (2,039)
bank loans
(Decrease)/increase in (1,311) 2,605 1,395
cash
* The foreign exchange differences include those differences arising on
settlement of trades and the effect of the translation of the cash flow
statement from US Dollars to Sterling.
The Company's interim report and accounts will be sent to shareholders in
August 2001. Copies will be available to the public at the registered office
of the Company, AIB House, Grenville Street, St Helier, Jersey and at the
offices of the Manager, Shackleton House, 4 Battle Bridge Lane, London SE1
2HR.
This preliminary statement was approved by the Board on 24th August 2001. It
is not the Company's statutory accounts. The statutory accounts for the year
ended 31st December 2000 have been delivered to the Registrar of Companies
and received an audit report which was unqualified.
By order of the Board
Shackleton House AIB Govett Secretaries Limited
4 Battle Bridge Lane Assistant Secretary
London SE1 2HR Registered in Jersey no: 45906
24 August 2001
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