RNS No 9797d
CATER ALLEN EQUITY GROWTH FUND LIMITED
27th November 1997
Directors
Ian Donald Cameron (Chairman)
New Broad Street House, 35 New Broad Street, London EC2M INH.
Mr. Cameron is a Director of Panmure Gordon & Co. Limited, a Member of the
London Stock Exchange and The Securities and Futures Authority Limited.
Burtt R Ehrlich (United States of America)
20 Brynwood Lane, Greenwich, Connecticut 06831, U.S.A.
Mr. Ehrlich is a Director of Armor Holdings Inc., Katz Digital Printing Inc.,
Bassett Management Company and the Reserve Group of Funds. He has been
associated with the U.S. investment industry for over 30 years.
Peter John Hungerford Morgan
La Battue, Candie Road, St. Peter Port, Guernsey, Channel Islands.
Mr Morgan is a retired Conseiller of the States of Guernsey
Jeremy Paul Norfolk
Cater Allen House, Commercial Street, St. Helier, Jersey JE4 8UP, Channel
Islands. Mr. Norfolk is Managing Director of Cater Alien Investment Management
(C.I) Limited and a Director of Cater Alien Holdings Plc. He has worked in
banking and investment for over 20 years.
Roger Maurice Berkeley
New Broad Street House, 35 New Broad Street, London EC2M 1NH.
Mr Berkeley is a Director of Panmure Gordon & Co. Limited, a Member of the
London Stock Exchange and The Securities and Futures Authority Limited.
Secretary and Manager
Cater Allen Investment Management (C.I.) Limited
(Incorporated in Jersey, Channel Islands on 12th June 1978)
P.O. Box 372, Cater Allen House, Commercial Street, St. Helier,
Jersey JE4 8UP, Channel Islands.
Telephone: Jersey 44 1534 828200
Fax: Jersey 44 1534 828202
Custodian
The Royal Bank of Scotland Trust Company (Jersey) Limited
(Incorporated in Jersey, Channel Islands on 3rd November 1972)
Capital House Building, Bath Street, St. Helier, Jersey JE4 8TL, Channel
Islands.
Registrar
R & H Fund Services (Jersey) Limited
(Incorporated in Jersey, Channel Islands on 29th November 1988)
Ordnance House, 31 Pier Road, St. Helier, Jersey JE4 8PW, Channel Islands.
Investment Adviser
Panmure Gordon & Co. Limited
New Broad Street House, 35 New Broad Street, London EC2M 1NH
Member of the London Stock Exchange and The Securities Association.
Bankers
Cater Alien Bank (Jersey) Limited
(Incorporated in Jersey, Channel Islands on 17th October 1984)
Cater Allen House, Commercial Street, St. Helier, Jersey JE4 8WU, Channel
Islands.
The Royal Bank of Scotland Plc
(Incorporated in Scotland on 31st October 1984)
Royal Bank Building, Jersey JE4 8ZA, Channel Islands.
Auditors
Reads & Co. (Chartered Accountants)
P.O. Box 641, No 1 Seaton Place, St. Helier, Jersey JE4 8YJ, Channel Islands.
Advocates and Solicitors to the Fund in Jersey
Mourant du Feu & Jeune
22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands.
Solicitors to the Fund in England
Macfarlanes
10 Norwich Street, London EC4A 1BD.
Registered Office
Cater Alien House, Commercial Street, St. Helier, Jersey JE4 8UP, Channel
Islands.
Directors' Report for the
half year ended 31st July 1997
Introduction
The Fund is limited by shares and is incorporated in Jersey, Channel
Islands under the Companies (Jersey) Law 1991.
The Fund is governed by the Collective Investment Funds (Jersey) Law,
1988, as amended, which governs the operation of unit trusts and
open-ended investment companies in Jersey.
Jersey Company Law requires the Directors to prepare accounts covering
a period of not more than eighteen months starting from the date of the last
accounts or the date of the company's incorporation. The accounts must be
in accordance with generally accepted accounting principles and show a
true and fair view of the company's profit or loss for the half year, and the
state of the company's affairs at the end of the half year.
As with the exercise of their other duties, the Directors must, in
preparing the accounts, act honestly and in good faith; with a view to the
best interest of the company; and with the care, diligence and skill that a
reasonably prudent person would exercise were he in their position.
The Directors are responsible for ensuring the company maintains
adequate accounting records explaining its transactions and disclosing its
financial position from which proper accounts can be drawn.
Activities
The main aim of the Fund is to provide investors with long term
capital growth from a portfolio of equity share investments. The
Participating Redeemable Preference Shares ("Participating Shares") are
listed on the London Stock Exchange.
Directors
The Directors, all of whom have served throughout the period are
listed above.
Directors' Shareholdings
According to the Register of Directors' Interests, none of the Directors
are beneficially interested in Participating Shares of the Fund with the
exception of Mr. I. D. Cameron who has an interest in 12,202.22 shares.
These interests have not changed since 31st July 1997.
Dividend
The Directors of the Fund have not declared an Interim Dividend in
respect of the half year ended 31st July 1997. Subsequently the net
income earned in the full year ending 30th January 1998 will be
distributed by way of a dividend at the end of February 1998.
On 6th August 1997, the first Subscription Day following the end of the
accounting period, the Offer Price of a Participating Share was #7.35 and
the Bid Price #6.92.
Taxation
The Fund is a Jersey Exempt Company and is not a close company within
the provisions of the Income and Corporation Taxes Act 1988 of the
United Kingdom.
Distributor Status
The Fund has been certified for the purposes of Chapter V of Part XVII
of the U.K. Income and Corporation Taxes Act 1988 ("Offshore Funds")
as a "distributing fund" in respect of the "account" periods ended 30th
January 1997.
The Directors intend, in so far as they are able, to continue conducting
the affairs of the Fund so as to obtain certification in the future.
Accounts
The Directors present their report to the Members together with the
unaudited accounts for the half year ended 31st July 1997.
Shareholdings
As at 31st July 1997 the Directors are aware of the following holdings
which represents three per cent or more of the Participating Shares in
issue:
Number of
Participating %
Name Shares of Fund
Pershing Keen Nominees Limited
A/C PG 487,034 38.65
BT Globenet Nominees Limited A/C 6 120,000 9.52
Matheson Nominees Limited A/C PMA 60,000 4.76
Alexander L. Stewart 46,260 3.67
Montagu Nominees (Jsy) Ltd
A/C 047014428 45,000 3.57
Cater Allen House By order of the Board
Commercial Street Cater Allen Investment
St. Helier Management (C.I.) Limited
Jersey JE4 8UP
Channel Islands Secretary
7th August 1997
Investment Adviser's Report
The first half of 1997/98 has seen a further improvement in the Net Asset Value
of the Fund against the general background of falls generally in the share
prices of the smaller to medium sized companies in which the Fund is largely
invested. The rise of 0.79% is therefore a favourable outcome compared with
Indices such as the FTSE 250 and the Smaller Capitalisation Index which over the
same period to 30th July had declined by 1.63% and 4.53% respectively. While
the FTSE 100 Index as a whole has shown strong appreciation this year, this has
been largely due to the share performance of only ten companies. If these were
excluded, this benchmark index would have shown little change in the last six
months.
The outstanding sectors during the first part of the year, as indeed they were
in 1996, have been oils, pharmaceuticals and financials, with the Fund being
represented in each. Of the three, however, it is oils in which the Fund is
most strongly represented, this sector presently accounting for about 12 1/2%,
of the investment portfolio, split between Shell Transport & Trading and three
other leading exploration and production companies. However, while retaining
these and other core FTSE 100 holdings such as Rio Tinto, Pearson, Great
Universal Stores, P&O, Cable & Wireless and General Accident, we are looking to
improved performances from the medium sized and smaller companies during the
coming months.
Since Sterling began to weaken, indices such as the FTSE 250 and Smaller
Capitalisation have shown distinct signs of reversing their negative trends.
This can be attributed to indications by the Bank of England, following the
fourth interest rate increase in recent months, that a further rise should not
be necessary. Fears that interest rates could reach 8%, within the next year
have been lessened with favourable implications for smaller companies which are
relatively more vulnerable to higher rates.
This year the UK Stockmarket has underperformed Wall Street and many European
bourses, a fact recognised by foreign investors at a time when Sterling was
rising and the consequent injection of substantial liquidity from overseas has
driven the FTSE 100 index as much as the perceived strong rises in company
profitability and dividend payments at a time of restrained inflation. UK
Equities still appear reasonable value against other world markets, with which
more frequent comparisons are now being drawn given the increasing
internationalisation of world stock markets.
The Labour Government has soothed fears in its first three months of office
concerning its attitudes to the business community, with the impact of the
windfall tax on utilities no greater than expected, the Budget proposals
generally not increasing the burden of taxation to any marked extent and the
abolition of ACT on pension funds being offset by a reduction in Corporation
Tax.
The price of gold has seen a lower trend this year, the principal cause
for the latest slide in the bullion price being the disposal by the Reserve
Bank of Australia of about two thirds of its tonnage, although this also carries
a favourable message for world inflationary expectations. A profit in this
sector is being established through the current takeover of General Oriental
Investments at 590p per share, and this will reduce the Fund's exposure to
gold.
Against this general background, we look for continued helpful conditions
for equity markets throughout the world for the foreseeable future. The
appreciation in share value is however likely to be at a slower rate than in the
past year or two, given that an easing of economic growth rates seems likely in
1998, and some nervousness may be anticipated in the near future as the 10th
anniversary of the 1987 crash approaches.
Balance Sheet
31st July 1997 31st July 1996
# #
ASSETS
Investments 8,258,008 7,617,969
Cash and Deposits 484,982 518,092
Income receivable 19,475 23,872
Debtors 3,890 17,176
8,766,355 8,177,109
LIABILITIES
Creditors and accrued liabilities 149,314 22,500
NET ASSETS # 8,617,041 # 8,154,609
Representing #6.85 (#6.56) per share on
outstanding Participating Shares
Represented by:
SHARE HOLDERS'EOUITY
1,000 Management Shares of #1 each 1,000 1,000
1,258,609 Participating Redeemable
Preference Shares of 1p each (1,242,145) 12,586 12,421
3,600 Second Preference Shares of
1p each (0) 36 -
RESERVES
Share Premium 4,355,371 4,240,531
Capital Reserves 4,167,391 3,815,695
Revenue Reserves 80,657 84,962
#8,617,041 #8,154,609
I.D. CAMERON Director
J.P. NORFOLK Director
Approved by the Board of Directors.
7th September 1997
Revenue Account
Six Months to Six Months to
31st July 1997 31st July 1996
# # # #
INCOME
Deposit interest 13,453 13,408
Investment income 111,370 114,463
Underwriting commission 1,560 5,985
126,383 133,856
EXPENSES
Administration expenses 5,000 2,600
Audit fee 1,560 1,880
Custodian fee 4,390 4,211
Directors' fees 2,614 2,660
Management fee 43,499 42,109
Registrar fee 1,546 1,500
58,609 54,960
NET REVENUE FOR THE PERIOD 67,774 78,896
Net Equalisation (533) 669
Net revenue brought forward 13,416 5,396
NET REVENUE CARRIED FORWARD # 80,657 # 84,962
The Investment Portfolio
31st July 1997
Market
Value % of
Holding Stock # Net Assets
Fixed Interest
Convertibles
200,000 Emess
6.25p (Net) Cnv Cm Rd Pref 5p 113,000 1.31
Equities
Banks
50,000 Allied Irish Bank Ord IEP 0.25 266,750 3.10
Distributors
40,000 Inchcape Ord 25p 114,400 1.33
149,950 Young (H) Holdings Ord 25p 216,678 2.51
100,000 Mid-States Ord 10p 17,000 0.20
Diversified Industrials
200,000 Lonrho Ord 25p 242,000 2.81
70,714 Wassail 'A' Shares Ord 5p 204,010 2.37
18,750 Hanson Ord 25p 57,188 0.66
Electronic & Electric Equipment
200,000 Industrial Control Services Ord 10p 287,000 3.33
Engineering
40,000 Johnson Mathey Ord #1 232,400 2.70
25,000 Siebe Ord 10p 275,125 3.19
Extractive Industries
10,000 Ashanti Goldfields Ord NPV 71,500 0.83
10,000 GFSA Ord R0.05 1,200 0.01
30,000 Rio Tinto Plc Ord 10p 300,300 3.48
Healthcare
150,000 Celsis International Ord 1p 135,000 1.57
100,000 ML Laboratories Ord lp 147,500 1.71
80,000 Chiroscience Ord 5p 184,400 2.14
75,000 Isotron Ord 25p 273,000 3.17
Insurance
30,000 General Accident Ord 25p 271,500 3.15
Investment Trusts
200,000 Fleming Indian Ord 25p 116,000 1.35
200,000 Mercury World Mining Trust Plc
Ord 25p 175,000 2.03
100,000 Thompson Clive Investments Ord 50p 341,500 3.96
Market
Value % of
Holding Stock # Net Assets
Life Assurance
7,500 Norwich Union Ord 10p 23,775 0.28
Media
500,000 Osprey Communications Ord 25p 95,000 1.10
60,000 Tele-Cine Cell Ord 5p 24,000 0.28
30,000 Pearson Ord 25p 208,350 2.42
Oil Exploration & Production
30,000 Enterprise Oil Ord 25p 204,450 2.37
600,000 Premier Oil Plc Ord 5p 280,500 3.26
80,000 Lasmo Ord 25p 214,800 2.49
Oil, integrated
90,000 Shell Transport & Trading Ord 25p 403,650 4.68
Property
637,500 Aukett Associates Ord 5p 22,313 0.26
100,000 Wood (J D) Ord 10p 143,500 1.67
Retailers, General
200,000 Partridge Fine Arts Ord 10p 150,000 1.74
20,000 Dixon Group Ord 10p 119,100 1.38
30,000 Great Universal Stores Ord 25p 187,050 2.17
Alcoholic Beverages
50,000 Allied Domecq Ord 25p 218,000 2.53
Tobacco
15,000 Imperial Tobacco Group Plc Ord #1 55,650 0.65
Telecommunications
30,000 Cable and Wireless Ord 25p 183,900 2.13
150,000 GEO Interactive Media Group Ltd
Ord 132,750 1.54
Transport
500,000 Goode Durrant Ord 5p 212,500 2.47
40,000 P & O Dfd Ord #1 242,000 2.81
Building & Construction
22,000 Gleeson (M J) Ord 10p 202,950 2.36
Overseas Equities
Asia
200,000 Edinburgh Tiger Trust Warrants 9,500 0.11
South Africa
20,000 Randfontein Est Gold Mining R0.20 24,500 0.28
USA
150,000 Blairmore Holdings Inc,
Common Stock 393,750 4.57
1,000 Cisco System Common Stock NPV 48,420 0.56
Jersey
25,510 PMG Eagle Fund Limited 164,149 1.90
100,000 Thompson Clive Growth Industries
Fund 15,000 0.17
Cayman Islands
40,000 General Oriental Investments
US$0.10 236,000 2.74
Total Securities # 8,258,008 95.83
Cash and other Net Assets 359,033 4.17
Total Net Assets # 8,617,041 100.00%
Price and Dividend
Performance Record
(adjusted for scrip issues)
Highest Lowest Dividends
Year Offer Price Bid Price Paid
1987 #3.92 #3.30 23.3p
1988 #4.21 #3.47 13.3p
1989 #5.34 #3.83 12.6p
1990 #5.24 #3.73 9.3p
1991 #4.77 #3.52 15.0p
1992 #4.56 #3.18 14.0p
1993 #6.31 #4.23 11.0p
1994 #6.31 #4.98 8.5p
1995 #6.62 #4.91 6.5p
1996 #7.46 #6.26 6.5p
1997 (to date) #7.35 #6.59 8.0p
Net Asset History
Net Assets
Participating per
Net Shares in Participating
Date Assets Issue Share
30th January 1992 #6,967,627 1,806,105 #3.86
30th July 1992 #5,964,130 1,688,744 #3.53
28th January 1993 #6,022,655 1,404,787 #4.29
29th July 1993 #6,694,181 1,344,980 #4.97
27th January 1994 #7,856,917 1,347,013 #5.83
28th July 1994 #7,086,304 1,330,052 #5.33
26th January 1995 #6,688,533 1,319,844 #5.07
27th July 1995 #6,932,893 1,264,183 #5.49
1st February 1996 #7,916,110 1,231,431 #6.43
31st July 1996 #8,154,609 1,242,145 #6.56
30th January 1997 #8,638,400 1,274,259 #6.78
31st July 1997 #8,618,540 1,258,609 #6.85
END
IR FEMFSWUWUFIF
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