RNS Number:7898P
TR European Growth Trust PLC
16 September 2003
15 September 2003
TR EUROPEAN GROWTH TRUST PLC
Unaudited Preliminary Group Results
for the year ended 30 June 2003
* Final Dividend increased by 44.8%
* Earnings per share rise 60.3%
* Encouraging start to current financial year
Extracts from the Chairman's Statement
Performance
The overall results of the Company for the twelve months to 30 June 2003 reveal
a fall in net assets per share in excess of 8%. Whilst any fall is not good
news, this compares with a fall of 15% in our benchmark index, the first
outperformance for two years. We have however not managed to keep pace with the
smaller company indices.
The returns achieved, since I wrote to you at the interim stage, make more
pleasant reading with net assets per share advancing almost 14% over our second
half year. With a better tone to markets, we hope this growth will continue.
Our share price fell by 12% over the year as our discount widened to 19%. There
were periods when our discount remained doggedly above 20%; this coincided with
increased buy-back of shares, to which I refer later.
We have always striven to be open with shareholders and to publish 'best in
class' information. We were delighted to receive therefore, for our 2002 Report
and Accounts, the AITC award for the "Best Report and Accounts for a Specialist
Trust".
Revenue and Dividend
Our gross revenue increased by 20% as investment income rose by over 6%, as our
stock selection has leant more toward higher yielding stocks. Underwriting
income was also significant, as we participated in a number of rights issues
through the year. After tax, net revenue grew by 58% and earnings per share by
60%. We propose a dividend per share of 2.10p, a 45% increase versus last year.
Our aim is to pay dividends on a progressive basis. The Company has substantial
retained reserves available to it, however investors should not rely on regular
increases.
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TR EUROPEAN GROWTH TRUST PLC
Unaudited Preliminary Group Results
for the year ended 30 June 2003
Share Capital
A total of 6.854 million shares were purchased during the year to June. These
shares have been cancelled, thus enhancing the NAV per share for remaining
shareholders. At this year's AGM, we will be seeking to refresh the powers to
buy back stock.
157 shares were issued at a subscription price of #1.66 per share as a result of
the annual warrant exercise in 2002. Nearly 19 million warrants remain
outstanding, exercisable on 30 October. If not exercised they will lapse.
Investment Trust Share Plan and ISA
The Directors remain committed to the above plans that enable both new and
existing investors to buy shares by way of a lump sum investment or regular
monthly contributions.
The Board
The Board has gone through some changes over the past year. Juhani Anttila stood
down on 24 March due to increased business commitments in Switzerland. I would
like to thank him for his contribution. Bernard Clark has been appointed to the
Board today; he has very relevant experience to bring to TREG. At this year's
AGM, we are seeking approval for Bernard's election and for the re-elections of
David Codling and myself, both of us retiring by rotation.
Outlook
Investors have become encouraged by increasing signs of recovery in the U.S.A.
Whilst Continental European economies are more lacklustre, stock markets are
anticipating that some degree of economic momentum will cross the Atlantic in
due course. We have concerns that some valuation levels are already anticipating
a text book recovery. In addition the increase in tension and terrorism since
the end of the Iraq conflict seems to be ignored. Nevertheless stock markets
have, and will continue to offer, opportunities for the astute stock picker. As
long as markets remain reasonable we have the prospect of continuing to make
progress from the lows of March.
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TR EUROPEAN GROWTH TRUST PLC
Unaudited Preliminary Group Results
for the year ended 30 June 2003
Group Statement of Total Return (incorporating the consolidated revenue account)
for the year ended 30 June 2003
Year ended 30 June 2002
Year ended 30 June 2003
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Total capital losses from investments - (24,289) (24,289) - (128,265) (128,265)
Income from fixed asset investments 5,863 - 5,863 5,513 - 5,513
Other interest receivable and similar income 940 - 940 141 - 141
--------- --------- --------- --------- --------- ---------
Gross revenue and capital losses 6,803 (24,289) (17,486) 5,654 (128,265) (122,611)
Management fee (772) (3,089) (3,861) (1,016) (4,064) (5,080)
Other administrative expenses (525) - (525) (602) - (602)
--------- --------- --------- --------- --------- ---------
Net return/(loss) on ordinary activities
before interest payable and taxation 5,506 (27,378) (21,872) 4,036 (132,329) (128,293)
Interest payable (45) (179) (224) (416) (1,666) (2,082)
--------- --------- --------- --------- --------- ---------
Net return/(loss) on ordinary activities
before taxation 5,461 (27,557) (22,096) 3,620 (133,995) (130,375)
Taxation on net return on ordinary activities (1,497) 950 (547) (1,109) 765 (344)
--------- --------- --------- --------- --------- ---------
Net return/(loss) on ordinary activities
after taxation 3,964 (26,607) (22,643) 2,511 (133,230) (130,719)
Appropriations - dividends
Proposed final 2.10p (2002: 1.45p) (3,211) - (3,211) (2,340) - (2,340)
--------- --------- --------- --------- --------- ---------
Transfer to/(from) reserves 753 (26,607) (25,854) 171 (133,230) (133,059)
===== ====== ====== ===== ====== ======
Return/(loss) per ordinary share (note 1)
- Basic 2.50p (16.80)p (14.30)p 1.56p (82.55)p (80.99)p
- Diluted - - - - - -
===== ====== ====== ===== ====== ======
The revenue column of this statement represents the consolidated profit and loss
account of the Group.
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TR EUROPEAN GROWTH TRUST PLC
Unaudited Preliminary Group Results
for the year ended 30 June 2003
Group and Company Balance Sheets
at 30 June 2003
Group Group Company Company
2003 2002 2003 2002
#'000 #'000 #'000 #'000
Fixed asset investments
Listed at market valuation 221,388 270,421 221,388 270,421
Unquoted - at directors' valuation 20,449 15,698 21,945 17,195
------------ ------------ ------------ ------------
Total fixed assets 241,837 286,119 243,333 287,616
------------ ------------ ------------ ------------
Current assets
Debtors 6,029 2,373 6,029 2,373
Cash at bank 720 2,839 717 2,837
------------ ------------ ------------ ------------
6,749 5,212 6,746 5,210
Creditors: amounts falling due within one year (7,152) (16,385) (8,645) (17,880)
------------ ------------ ------------ ------------
Net current liabilities (403) (11,173) (1,899) (12,670)
------------ ------------ ------------ ------------
Total net assets 241,434 274,946 241,434 274,946
======= ======= ====== ======
Capital and reserves
Called up share capital 19,318 20,175 19,318 20,175
Share premium 115,421 115,421 115,421 115,421
Other capital reserves 96,162 129,570 97,727 131,136
Revenue reserve 10,533 9,780 8,968 8,214
----------- ----------- ------------ ------------
Equity shareholders' funds 241,434 274,946 241,434 274,946
======= ======= ======= =======
Net asset value per ordinary share
Basic 156.22p 170.35p 156.22p 170.35p
Diluted - 169.89p - 169.89p
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TR EUROPEAN GROWTH TRUST PLC
Unaudited Preliminary Group Results
for the year ended 30 June 2003
Group Cash Flow Statement
for the year ended 30 June 2003
2003 2003 2002 2002
#'000 #'000 #'000 #'000
Net cash inflow/(outflow) from operating activities 1,160 (1,029)
Servicing of finance (190) (2,150)
Interest paid
------------ ------------
Net cash outflow from servicing of finance (190) (2,150)
Taxation
Withholding and income tax recovered 427 524
------------ ------------
Net tax recovered 427 524
Financial investment
Purchase of investments (82,222) (89,943)
Sale of investments 97,694 227,397
------------ ------------
Net cash inflow from financial investment 15,472 137,454
Equity dividends paid (2,306) (2,340)
Financing
(Purchase)/issue of ordinary shares (6,854) 8
Repayment of loans (10,459) (132,389)
------------ ------------
Net cash outflow from financing (17,313) (132,381)
------------ ------------
(Decrease)/increase in cash (2,750) 78
======= =======
Reconciliation of net cash flow to movement in
net funds/(debt)
(Decrease)/increase in cash as above (2,750) 78
Cash outflow from loans repaid 10,459 132,389
------------ ------------
Change in net debt resulting from cash flows 7,709 132,467
Exchange difference 712 (3,703)
------------ ------------
Movement in net debt in the year 8,421 128,764
Net debt at 1 July (7,701) (136,465)
----------- -----------
Net funds/(debt) at 30 June 720 (7,701)
======= =======
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TR EUROPEAN GROWTH TRUST PLC
Unaudited Preliminary Group Results
for the year ended 30 June 2003
Notes:
1. Return/(loss) per ordinary share
Revenue return per ordinary share is based on earnings attributable
to ordinary shares of #3,964,000 (2002: #2,511,000) and on the weighted
average number of ordinary shares in issue during the year of
158,394,041 (2002: 161,398,674).
Capital return per ordinary share is based on the net capital loss
for the year of #26,607,000 (2002 loss: #133,230,000) and on the
weighted average number of ordinary shares in issue during the year of
158,394,041 (2002: 161,398,674).
The calculation of the fully diluted revenue and capital returns
per ordinary share are carried out in accordance with Financial
Reporting Standard No.14 Earnings per Share ("FRS14"). For the purposes
of calculating diluted revenue and capital returns per ordinary share,
the number of ordinary shares is the weighted average used in the basic
calculation plus the number of ordinary shares deemed to be issued for
no consideration on exercise of all warrants by reference to the average
price of the ordinary shares during the year. The calculations indicate
that the exercise of warrants would result in a decrease in the weighted
average number of ordinary shares of 9,566,386 (2002: decrease of
247,895). The calculations indicate that the warrants do not have a
potentially dilutive effect on capital and total returns for this year.
2. Dividend
The final dividend, subject to approval at the AGM, will be paid on
5 November 2003 to shareholders on the register at the close of business
on 3 October 2003. The ex-dividend date will be 1 October 2003.
3. 2002 Accounts
The figures and financial information for the year ended 30 June
2002 are an extract of the latest published accounts of the Group and do
not constitute statutory accounts for that year. Those 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
either under section 237(2) or 237(3) of the Companies Act 1985.
4. 2003 Accounts
The preliminary figures for the year ended 30 June 2003 have been
extracted 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.
5. Annual General Meeting
Copies of the Annual Report will be posted to shareholders in
October. Further copies will be available from the Secretary at 4
Broadgate, London EC2M 2DA thereafter. The Annual General Meeting will
be held on 3 November 2003.
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For further information please contact:
Stephen Peak
Director
TR European Growth Trust PLC
Telephone: 020 7818 4334
Stephen Westwood
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 5517
Stephen Phillips
Associate Director
Henderson Global Investors
Telephone: 020 7818 6417
Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222
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