NEW STAR INVESTMENT TRUST PLC
PRELIMINARY ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
The Directors announce the unaudited statement of consolidated results for the
six months ended 31st December 2002 as follows:
CONSOLIDATED STATEMENT OF TOTAL RETURN
(incorporating the revenue account*) of the Group
1st July 1st July
to 31st December 2002 to 31st December 2001
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Losses on - (10,005) (10,005) - (3,494) (3,494)
investments
Dividend and 589 - 589 1,463 - 1,463
interest income
Losses on index
futures
contracts - (971) (971) - (242) (242)
Investment (114) - (114) (271) - (271)
management fee
Other expenses (190) - (190) (184) - (184)
Other exchange - (8) (8) - (25) (25)
losses
Return on ordinary
activities
before finance costs
and
taxation 285 (10,984) (10,699) 1,008 (3,761) (2,753)
Interest payable and
similar
charges - - - - - -
Return on ordinary
activities
before taxation 285 (10,984) (10,699) 1,008 (3,761) (2,753)
Taxation on ordinary (57) - (57) (251) - (251)
activities
Return on ordinary
activities
after taxation 228 (10,984) (10,756) 757 (3,761) (3,004)
Dividends - - - - - -
Transfer to/(from) 228 (10,984) (10,756) 757 (3,761) (3,004)
reserves
* The revenue column of this statement is the consolidated revenue account of
the Group.
pence pence pence pence pence pence
Return per Ordinary 0.26 (12.32) (12.06) 0.69 (3.42) (2.73)
share
CONSOLIDATED BALANCE SHEET
As at As at As at
31st December 30th June 2002 31st December 2001
2002
(unaudited) �'000 (audited) �'000 (unaudited) �'000
Fixed assets
Investments 48,492 89,210 99,702
Current assets
Debtors 269 2,266 1,455
Cash at bank 1,545 2,985 4,269
1,814 5,251 5,724
Creditors: amounts
falling
due within one year
Creditors (119) (770) (731)
Dividend payable - (1,977) -
Net current assets 1,695 2,504 4,993
Total assets less
current
liabilities 50,187 91,714 104,695
Capital and reserves:
Called up share capital 710 1,098 1,098
Share premium account 21,573 21,573 21,573
Capital reserve (29,317) (18,333) (6,785)
Special reserve 56,908 87,290 87,290
Revenue reserve 313 86 1,519
Equity shareholders' 50,187 91,714 104,695
funds
Net asset value per
share
Ordinary shares 70.66p 83.51p 95.33p
CONSOLIDATED STATEMENT OF CASHFLOWS
1st July to 1st July to
31st December 2002 31st December 2001
�'000 �'000
Net cash inflow from operating 1,934 645
activities
Servicing of finance
Interest paid - -
Taxation
Taxation paid (583) (141)
Capital expenditure and financial
investment
Purchase of investments (2,359) (36,915)
Disposal of investments 33,305 42,716
Losses on index futures contracts (971) (242)
Exchange losses on settlements (11) (63)
Revaluation of foreign currency (8) (25)
balances
Net cash inflow from capital 29,956 5,471
expenditure and
financial investment
Equity dividends paid (1,977) (2,416)
Net cash inflow before financing 29,330 3,559
Financing
Redemption of share capital (30,770) -
Net cash outflow from financing (30,770) -
(Decrease)/increase in cash (1,440) 3,559
Returns per share
The Group net revenue on ordinary activities after taxation amounted to �
228,000 (2001: �757,000). The basic revenue return per Ordinary share is based
on this figure and a total of 89,156,763 (2001: 109,820,026) shares, being the
weighted average number of Ordinary shares in issue during the period.
The capital return per Ordinary share is based on net capital losses for the
period of �10,984,000 (2001: losses of �3,761,000) and on 89,156,763 (2001:
109,820,026) shares, being the weighted average number of Ordinary shares in
issue during the period.
Net asset value
The net asset value per share of 70.66p (31st December 2001: 95.33p) has been
calculated by reference to net assets of �50,187,000 (31st December 2001: �
104,695,000) and 71,023,695 (31st December 2001: 109,820,026) Ordinary shares,
being the number of shares in issue at the end of the period.
The above unaudited financial information for the period ended 31st December
2002 which does not constitute statutory accounts as defined in Section 240 of
the Companies Act 1985 has been prepared on the basis of the accounting
policies set out in the statutory accounts of the Group for the year ended 30th
June 2002. The auditors have reported on those accounts; their reports were
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 30 June 2002 have
been delivered to the Registrar of Companies.
Copies of the interim report will be sent to shareholders in February and will
be available to members of the public from the Registered Office at 23
Cathedral Yard, Exeter EX1 1HB.
CHAIRMAN'S STATEMENT
The total assets of the Company, after taking account of the reconstruction in
September, fell by 15.4% over the six months to 31st December 2002. This
compares to a fall in the FTSE All-Share Index of 16.3% over the same period.
Net revenue before tax for the six month period was �285,000. The Directors are
not recommending the payment of an interim dividend to shareholders.
The biggest influences on the stock market during the six months under review
were the accountancy scandals that occurred over the spring and summer in the
US, the growing fears that the US economy faced a double-dip recession and
concerns about the economic and financial impact of a US-led attack on Iraq.
The London market's low point in the period was reached on 24th September, with
the FTSE All-Share Index standing 42% below its September 2000 peak. Shares
rallied during October then fell again in the final two months of the year.
In response to patchy US economic growth and subdued inflationary pressures,
the US Federal Reserve made a half a percentage point cut in the Federal Funds
rate in early November, taking it down to 1.25%. This was the first move in 11
months. UK base rates were left unchanged at 4%, a reflection of the housing
boom and the strength of consumer demand, but the European Central Bank
followed the US lead, cutting its main rate from 3.25% to 2.75%.
The reconstruction of the Company finally took place on 26th September 2002
following the approval of the Court. The result of this reconstruction was
that, following the predicted scaling, shareholders holding approximately 35%
of the Company's shares elected for the Jupiter unit trust option. This led to
the Company's assets being reduced by �31 million. The reconstruction was
achieved at no cost to the Company, Jupiter International Group having finally
agreed to pay all expenses. This is, obviously, a good outcome for shareholders
and exactly as we originally suggested.
The most significant change in the portfolio during the period was the sale of
the Company's FTSE 100 Index futures coinciding with the capital
reorganisation. This had the effect of increasing the portfolio's focus on the
individual stocks and pooled investments within it. As a result, the portfolio
has become more exposed to the stock-picking abilities of the Company's
investment manager and the managers of the pooled vehicles.
At 31st December 2002, the Company was approximately 64% invested in shares or
units in other investment companies managed by associates of New Star Asset
Management Group (NSAMG), the parent company of the manager. The unweighted
performance of these funds, that were held over the period under review, was a
fall of 10.8%, outperforming the benchmark of the FTSE All-Share Index. These
funds give the Company an exposure to European and Asian stock markets as well
as the UK. It is worth mentioning that the manager does not charge fees from
the Company where investment is in other funds managed by associates of NSAMG.
The Company's holding in NSAMG was re-stated to the original cost price of �80
per share following a fund raising by NSAMG as part of its recent new
financing. This is reflected in the interim figures.
Following one of the worst bear markets in recent history the valuations of
many companies now look attractive on a medium and long-term basis. In
particular, the UK market, where the majority of the Company's assets are
invested, seems undervalued in absolute terms and relative to other major
markets. There has recently been an increase in share buying by directors,
which is often a reflection of relatively modest price earnings ratios.
The unaudited net asset value at 31st January 2003 was 67.2p per Ordinary
share.
J L Duffield
Chairman
21st February 2003
END