RNS Number:2021R
Dresdner RCM 2 Endwt Policy Tst PLC
22 October 2003
For Immediate Release 22nd October 2003
DRESDNER RCM SECOND ENDOWMENT POLICY TRUST plc
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS
For the year ended 30th September 2003
Investment Review - 2006 Pool
A summary of the results for the 2006 Pool for the year ended 30th September
2003 is set out on page 4. The net asset value has fallen from 195.7p per 2006
Share at 30th September 2002 to 157.1p per 2006 Share at 30th September 2003, a
decrease of 19.7%.
The 2006 Pool currently has investments in policies from a total of 53
with-profits funds. During the year the 2006 Pool realised proceeds of policy
maturities amounting to #1.7 million. The average annualised return on these
policies was 7.52% since purchase. This calculation makes no allowances for
windfalls arising from demutualisations or the distribution of orphan assets.
Investment Review - 2009 Pool
A summary of the results for the 2009 Pool for the year ended 30th September
2003 is set out on page 5. The net asset value has fallen from 142.8p per 2009
Share at 30th September 2002 to 119.1p per 2009 Share at 30th September 2003, a
decrease of 16.6%.
The 2009 Pool currently has investments in policies from a total of 58
with-profits funds. During the period the 2009 Pool realised proceeds of policy
maturities amounting to #1.6 million. The average annualised return on these
policies was 6.25% since purchase. This calculation makes no allowances for
windfalls arising from demutualisations or the distribution of orphan assets.
Market Overview
The twelve months to 30th September 2003 have been dominated by further
significant bonus rate cuts (primarily occurring in the last quarter of 2002 and
the first quarter of 2003), and a recovery in equity values since mid-March.
Bonus rate reductions in the first half continued to reflect the severe equity
bear market of the last three years. The recent recovery in equity markets,
however, has provided some respite for the life industry, reducing pressures on
solvency which were a feature of the first quarter.
Accrued guaranteed benefits
Guaranteed benefits are attached to the policy portfolio (comprising sums
assured and reversionary bonuses declared to date) and these have continued to
grow as reversionary bonuses have been declared over the year. Stated as a
projected final net asset value after projected expenses - including the cost of
borrowings - they represented 126.7p and 102.9p per 2006 and 2009 Share
respectively as at 30th September 2003.
Share buybacks and borrowings
As reported in last year's Report and Accounts, proceeds from the surrender and
sale of a number of policies, at attractive levels relative to asset share, were
received early in the year under review. Proceeds amounted to #0.5m and #0.1m
for the 2006 and 2009 Pools respectively and, together with proceeds from
disposals received prior to the last year end, were used mainly to repay debt in
order to reduce risk. They were also used to repurchase 45,000 2006 Shares
and 110,000 2009 shares during the year ended 30th September 2003.
The Board intends to seek renewed authority from shareholders to buy back up to
15% of the issued share capital of the Company at the forthcoming Annual General
Meeting.
Projected final net asset values
The Company publishes projected final net asset values on a regular basis.
These projections are based on possible future bonus rate levels, which will
reflect, inter alia, the investment returns earned by the underlying
with-profits funds. Projected final net asset values as at 30th September 2003
are given in the table below.
100% Current Bonus 80% Current Bonus 50% Current Bonus No Further Bonuses
Rates Rates Rates
Projected final net asset
value at 30th September
2006 (2006 Pool) 193.3p 180.2p 161.1p 126.7p
Projected final net asset
value at 31st December
2009 (2009 Pool) 177.5p 161.9p 139.9p 102.9p
Projected final net asset values are calculated using the principal bases and
assumptions set out in the Annual Report which, inter alia, assume no further
changes in life office bonus rates other than those stated above, current
gearing levels and interest rates, no further demutualisation receipts and no
further purchases of policies. 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.
Earnings and dividend
The Company is managed with the objective of providing returns to investors
entirely in the form of capital growth. The continuing deficit on the revenue
account is consistent with this objective. Consequently, no dividend will be
payable on either class of share.
Investment Policy
The Board announces that, following the publication of the Investment Entities
(Listing Rules and Conduct of Business) Instrument 2003, it is the Company's
policy to invest no more than 15% of its gross assets in other listed investment
companies (including listed investment trusts).
Status
The Company operates as an approved investment trust within the meaning of
Section 842 of the Income and Corporation Taxes Act 1988. Such approval has
been granted for the year ended 30th September 2002 and is expected to be
granted for the accounting year under review. The Company is not a close
company.
Annual General Meeting
The Annual General Meeting will be held on Tuesday 9th December 2003 at 12:30pm.
155 Bishopsgate By Order of the Board
London EC2M 3AD P W I Ingram
Company Secretary
For further information, please contact:
Allianz Dresdner Asset Management (UK) Limited
Simon White, Head of Investment Trusts
Tel: 020 7065 1539
RESULTS
STATEMENT OF TOTAL RETURN (Unaudited)
Year ended 30th September 2003
2006 Pool
Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (6,556) (6,556)
Income from investments 100 - 100
Other income 20 - 20
Management and advisory fees (595) - (595)
Expenses of administration (102) - (102)
Net return before finance costs and taxation (577) (6,556) (7,133)
Finance costs of borrowings (640) - (640)
Return on ordinary activities before taxation (1,217) (6,556) (7,773)
Taxation - - -
Transfer from reserves (1,217) (6,556) (7,773)
Return per 2006 Share (6.05)p (32.62)p (38.67)p
* The revenue column of this statement is the profit and loss account of the 2006 Pool.
The return per share is calculated on a weighted average number of shares in issue during the year of
20,094,968.
BALANCE SHEET 2006 Pool
As at 30th September 2003 (Unaudited) #'000s
Valuation of investments 39,658
Net current liabilities (4,179)
Total assets less current liabilities 35,479
Long term liabilities (3,950)
Net assets attributable to 2006 shareholders 31,529
Called up share capital 1,004
Share premium account -
Capital redemption reserve 5
Special reserve 19,128
Capital reserve : realised 9,828
: unrealised 12,672
Revenue reserve (11,108)
Shareholders' funds (all equity) 31,529
Net asset value per 2006 share 157.1p
The net asset value is based on 20,073,064 2006 shares in issue at the year end.
RESULTS
STATEMENT OF TOTAL RETURN (Unaudited)
Year ended 30th September 2003
2009 Pool
Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (4,060) (4,060)
Income from investments 88 - 88
Other income 15 - 15
Management and advisory fees (435) - (435)
Expenses of administration (75) - (75)
Net return before finance costs and taxation (407) (4,060) (4,467)
Finance costs of borrowings (269) - (269)
Return on ordinary activities before taxation (676) (4,060) (4,736)
Taxation - - -
Transfer from reserves (676) (4,060) (4,736)
Return per 2009 Share (3.42)p (20.54)p (23.96)p
* The revenue column of this statement is the profit and loss account of the 2009 Pool.
The return per share is calculated on a weighted average number of shares in issue of 19,764,014.
BALANCE SHEET 2009 Pool
As at 30th September 2003 (Unaudited) #'000s
Valuation of investments 28,761
Net current assets 400
Total assets less current liabilities 29,161
Long term liabilities (5,650)
Net assets attributable to 2009 shareholders 23,511
Called up share capital 197
Share premium account 18,925
Capital redemption reserve 3
Special reserve -
Capital reserves : realised 4,231
: unrealised 4,736
Revenue reserve (4,581)
Shareholders' funds (all equity) 23,511
Net asset value per 2009 share 119.1p
The net asset value is based on 19,745,000 2009 shares in issue at the year end.
RESULTS
STATEMENT OF TOTAL RETURN (Unaudited)
Year ended 30th September 2003
Company
Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (10,616) (10,616)
Income from investments 188 - 188
Other income 35 - 35
Management and advisory fees (1,030) - (1,030)
Expenses of administration (177) - (177)
Net return before finance costs and taxation (984) (10,616) (11,600)
Finance costs of borrowings (909) - (909)
Return on ordinary activities before taxation (1,893) (10,616) (12,509)
Taxation - - -
Transfer from reserves (1,893) (10,616) (12,509)
* The revenue column of this statement is the profit and loss account of the Company
BALANCE SHEET Company
As at 30th September 2003 #'000s
Valuation of investments 68,419
Net current liabilities (3,779)
Total assets less current liabilities 64,640
Long term liabilities (9,600)
Net assets attributable to ordinary shareholders 55,040
Called up share capital 1,201
Share premium account 18,925
Capital redemption reserve 8
Special reserve 19,128
Capital reserves : realised 14,059
: unrealised 17,408
Revenue reserve (15,689)
Shareholders' funds (all equity) 55,040
RESULTS
STATEMENT OF TOTAL RETURN
Year ended 30th September 2002
2006 Pool
Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (1,576) (1,576)
Income from investments 117 - 117
Other income 4 - 4
Management and advisory fees (703) - (703)
Expenses of administration (147) - (147)
Net return before finance costs and taxation (729) (1,576) (2,305)
Finance costs of borrowings (637) - (637)
Return on ordinary activities before taxation (1,366) (1,576) (2,942)
Taxation - - -
Transfer from reserves (1,366) (1,576) (2,942)
Return per 2006 share (6.77)p (7.81)p (14.58)p
* The revenue column of this statement is the profit and loss account of the 2006 Pool.
The return per share is calculated on a weighted average number of shares in issue of 20,167,927.
BALANCE SHEET 2006 Pool
As at 30th September 2002 #'000s
Valuation of investments 47,609
Net current assets 996
Total assets less current liabilities 48,605
Long term liabilities (9,237)
Net assets attributable to 2006 shareholders 39,368
Called up share capital 1,006
Share premium account -
Capital redemption reserve 3
Special reserve 19,195
Capital reserves : realised 8,789
: 20,266
unrealised
Revenue reserve (9,891)
Shareholders' funds (all equity) 39,368
Net asset value per 2006 Share 195.7p
The net asset value is based on 20,118,064 2006 shares in issue at the year end.
SUMMARY OF AUDITED RESULTS
STATEMENT OF TOTAL RETURN
Year ended 30th September 2002
2009 Pool
Revenue* Capital Total
#'000s #'000s #'000s
Net losses on investments - (2,052) (2,052)
Income from investments 88 - 88
Other income 2 - 2
Management and advisory fees (536) - (536)
Expenses of administration (111) - (111)
Net return before finance costs and taxation (557) (2,052) (2,609)
Finance costs of borrowings (346) - (346)
Return on ordinary activities before taxation (903) (2,052) (2,955)
Taxation - - -
Transfer from reserves (903) (2,052) (2,955)
Return per 2009 share (4.51)p (10.27)p (14.78)p
*The revenue column of this statement is the profit and loss account of the 2009 Pool.
The return per share is calculated on a weighted average number of shares in issue of 19,976,849.
BALANCE SHEET 2006 Pool
As at 30th September 2002 #'000s
Valuation of investments 33,839
Net current assets 1,206
Total assets less current liabilities 35,045
Long term liabilities (6,700)
Net assets attributable to 2009 shareholders 28,345
Called up share capital 199
Share premium account 18,925
Capital redemption reserve 1
Capital reserves : realised 3,693
: 9,432
unrealised
Revenue Reserve (3,905)
Shareholders' funds (all equity) 28,345
Net asset value per 2009 share 142.8p
The net asset value is based on 19,855,000 2009 shares in issue at the year end.
RESULTS
STATEMENT OF TOTAL RETURN
Year ended 30th September 2002
Company
Revenue* Capital Total
#'000s #'000s #'000s
Net gains on investments - (3,628) (3,628)
Income from investments 205 - 205
Other income 6 - 6
Management and advisory fees (1,239) - (1,239)
Expenses of administration (258) - (258)
Net return before finance costs and taxation (1,286) (3,628) (4,914)
Finance costs of borrowings (983) - (983)
Return on ordinary activities before taxation (2,269) (3,628) (5,897)
Taxation - - -
Transfer from reserves (2,269) (3,628) (5,897)
* The revenue column of this statement is the profit and loss account of the Company
BALANCE SHEET Company
As at 30th September 2002 #'000s
Valuation of investments 81,448
Net current assets 2,202
Total assets less current liabilities 83,650
Long term liabilities (15,937)
Net assets attributable to ordinary shareholders 67,713
Called up share capital 1,204
Share premium account 18,925
Capital redemption reserve 4
Special reserve 19,195
Capital reserves : realised 12,483
: 29,698
unrealised
Revenue reserve (13,796)
Shareholders' funds (all equity) 67,713
CASH FLOW STATEMENT (Unaudited)
For the year ended 30th September 2003 and comparative period
2006 Pool
Year to Year to
30th September 2003 30th September 2002
#'000s #'000s
Net cash outflow from operating activities (582) (967)
Servicing of Finance
Interest paid (598) (400)
Taxation
UK income tax repaid 4 3
Investing Activities
Payments to acquire investments (1,124) (1,205)
Receipts on demutualisations - 603
Receipts on disposal of investments 2,843 3,533
Net cash inflow from investing activities 1,719 2,931
Net cash inflow before financing 543 1,567
Financing
Decrease in loans (667) (1,000)
Purchase of Ordinary Shares for cancellation (67) (63)
Net cash outflow from financing (734) (1,063)
(Decrease)increase in cash (191) 504
CASH FLOW STATEMENT (Unaudited)
For the year ended 30th September 2003 and comparative period
2009 Pool
Year to Year to
30th September 2003 30th September 2002
#'000s #'000s
Net cash outflow from operating activities (479) (344)
Servicing of Finance
Interest paid (203) (348)
Taxation
UK income tax repaid 2 2
Investing Activities
Payments to acquire investments (971) (1,067)
Receipts on demutualisations - 254
Receipts on disposal of investments 2,810 3,054
Net cash inflow from investing activities 1,839 2,241
Net cash inflow before financing 1,159 1,551
Financing
Decrease in loans (1,050) (850)
Purchase of Ordinary Shares for cancellation (99) (152)
Net cash outflow from financing (1,149) (1,002)
Increase in cash 10 549
CASH FLOW STATEMENT (Unaudited)
For the year ended 30th September 2003 and comparative period
Company
Year to Year to
30th September 2003 30th September 2002
#'000s #'000s
Net cash outflow from operating activities (1,061) (1,311)
Servicing of Finance
Interest paid (801) (748)
Taxation
UK income tax repaid 6 5
Investing Activities
Payments to acquire investments (2,095) (2,271)
Receipts on demutualisations - 857
Receipts on disposal of investments 5,653 6,587
Net cash inflow from investing activities 3,558 5,173
Net cash inflow before financing 1,702 3,119
Financing
Decrease in loans (1,717) (1,850)
Purchase of Ordinary Shares for cancellation (166) (215)
Net cash outflow from financing (1,883) (2,065)
(Decrease) increase in cash (181) 1,054
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 30th September 2003. The
financial information for the year ended 30th September 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 September
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.
TWENTY LARGEST HOLDINGS BY LIFE OFFICE (Unaudited)
AS AT 30th SEPTEMBER 2003 - 2006 POOL
Value
Value of % of
Life Office Policies Total
#'000s Investments
Standard Life 11,091 28.0
AVIVA (Norwich Union) 5,010 12.6
Legal & General 3,437 8.6
Prudential 2,785 7.0
Scottish Provident 1,848 4.6
Prudential (Scottish Amicable) 1,663 4.2
Scottish Widows 1,540 3.9
Clerical Medical 950 2.4
Friends Provident 825 2.1
Scottish Life 671 1.7
AXA Equity and Law 668 1.7
Royal & Sun Alliance (Royal 636 1.6
Life)
Scottish Mutual 537 1.3
Guardian 499 1.3
Colonial Mutual 459 1.2
Alba Life (Crusader) 453 1.1
AVIVA (Commercial Union) 378 1.0
AXA Sun Life 337 0.8
Friends Provident (UKP Fund) 308 0.8
London Life 301 0.8
Total of twenty largest 34,396 86.7
holdings
Holdings in other offices 3,839 9.7
Total holdings of endowment 38,235 96.4
policies
FIXED INTEREST HOLDINGS
EIB 6.125% 07.12.2005 935 2.4
EIB 7.625% 07.12.2006 488 1.2
Total Fixed Interest Holdings 1,423 3.6
Total of Invested Funds 39,658 100.0
TWENTY LARGEST HOLDINGS BY LIFE OFFICE (Unaudited)
AS AT 30th SEPTEMBER 2003 - 2009 POOL
Value of % of
Life Office Policies Total
#'000s Investments
Standard Life 7,764 27.0
Legal & General 4,195 14.6
Prudential (Scottish Amicable) 2,458 8.5
AVIVA (Norwich Union) 1,816 6.3
Scottish Widows 1,813 6.3
Prudential 1,177 4.1
Scottish Life 1,026 3.6
Clerical Medical 929 3.2
Friends Provident 897 3.1
Scottish Provident 764 2.7
Colonial Mutual 410 1.4
Royal & Sun Alliance (Royal Life) 312 1.1
National Mutual Life 291 1.0
Gresham Life 264 0.9
NPI 212 0.7
Sun Life of Canada 192 0.7
AVIVA (Commercial Union) 192 0.7
AVIVA (Provident Mutual) 175 0.6
AXA Sun Life 157 0.6
Guardian 149 0.5
Total of twenty largest holdings 25,193 87.6
Holdings in other life offices 2,466 8.6
Total holdings of endowment policies 27,659 96.2
FIXED INTEREST HOLDINGS
Finland (REP) 10.125% # Bds 22.06.08 577 2.0
Abbey National 5.375% Notes 30.12.09 30.12.09 525 1.8
Total Fixed Interest Holdings 1,102 3.8
Total of Invested Funds 28,761 100.0
DRESDNER RCM SECOND ENDOWMENT POLICY TRUST plc
Principal bases and assumptions used in projecting the final net asset value on
page 2.
The final net asset values for the 2006 Pool and the 2009 Pool have been
calculated at 30th September 2006 and 31st December 2009 respectively, on the
basis that:
1) All policies are held to maturity, no death claims or demutualisation
benefits are received and no further purchases or disposals of policies are
made.
2) The latest reversionary and terminal bonus rates declared at 30th
September 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 September 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 remaining life are assumed to be consistent with the shape of the
swap rate yield curve at 30th September 2003.
5) No further shares are issued or repurchased, nor are any dividends paid.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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