WSE.L Regulatory News (WSE)

31 Aug 2005 11:57

Western Selection P.L.C. Preliminary announcement of unaudited results for the year ended 30th June 2005 Western Selection is an investment company with a mix of Strategic Investmentsand a General Portfolio, primarily of U.K. stocks, whose objective is togenerate real growth in value for shareholders over the medium to long term.Our total shareholder return over the last 5 years is in line with the returnfrom the FTSE 250 index and slightly above the return on the FTSE 100 index.At the end of June the Company's shares were effectively consolidated on a 1for 4 basis and all relevant comparatives have been restated to reflect this.The cost incurred to achieve this is the main factor behind the significantincrease in administrative expenses.The year was shaping up to be very satisfactory, until Sanctuary Group'ssurprise profits warning on 17th June caused their share price to fall 50%. Wehad been reducing our holding in Sanctuary, a former Strategic Investment, butstill owned 3.5 million shares at the time of the profits warning. We hadretained this investment in Sanctuary because of the rumours of a bid, despitethe risk attached. The fall in the share price had an adverse effect on our netasset value. Despite this, we have realised a substantial profit on ourshareholding over the course of our six year investment.Since the year end we have cashed our remaining holding in Sanctuary at theyear end balance sheet value, made certain other realisations and reduced ourborrowings to approximately ‚£745,000. Our bank facility remains unchanged at ‚£2,000,000.Overall, our net asset value per share including investments at market valuehas fallen 7% over the year to 30th June 2005, from 92.7p to 86.5p. The valueof our Strategic Investments has increased by 18% due to the rise in Creston'sshare price. The value of our General Portfolio has declined over the year due,in the main, to the reasons given above.The Company made a profit for the year of ‚£366,000 before tax and a charge forprovisions against investment of ‚£209,000, compared to last year's loss of ‚£258,000 before tax and a net release of provisions against investments of ‚£570,000. The profit for the year was ‚£153,000 (1.4p per share) after tax,compared to last year's profit of ‚£307,000 (2.8p per share) after tax. We havedeclared a dividend of ‚£252,000 (2.32p per share) compared with ‚£239,000 for2004 (2.20p per share adjusted for the share consolidation and sub-division).Strategic InvestmentsCreston plcCreston is a marketing services group whose strategy is to grow within itssector both by organic growth and through selective acquisition to become asubstantial, diversified international marketing services group. The resultsfor the year to 31st March 2005, show a profit after tax of ‚£2,640,000 (2004 -‚£1,449,000), equivalent to earnings of 10.7p per share (2004 - 9.0p).At 1st July 2004, Western owned 2,000,000 shares in Creston. During the year weacquired an additional 873,998 shares at a cost of ‚£1,224,141 as a result ofthe exercise of our warrants and participation in Creston's fundraising tobring our total holding to 2,873,998 shares, being 8.2% of Creston's issuedshare capital. The market value of the Company's holding in Creston on 30thJune 2005 was ‚£4,455,000 (2004 - ‚£2,620,000), being 47% of Western's netassets.I am the non-executive chairman of Creston. At its recent AGM, Creston'sdirectors expressed their confidence in current trading conditions beingexperienced by the now much enlarged group.Swallowfield plcSwallowfield has a long history of developing and producing aerosol, cosmeticand toiletry products stretching back to 1950. As one of Europe's premiercontract manufacturers of toiletries and cosmetics it offers an unrivalledbreadth of product capabilities. Its skill in design, developing and producinggift packs and themed product ranges compliments its production capability.Swallowfield's latest published results were for the 28 weeks to 8th January2005 and showed a profit of ‚£431,000 (28 weeks to 10th January 2004 - ‚£263,000).Western owns 1,000,000 shares in Swallowfield being 8.9% of the issued sharecapital. The market value of the Company's holding in Swallowfield on 30th June2005 was ‚£765,000 (2004 - ‚£775,000), being 7% of Western's net assets.Industrial & Commercial Holdings PLCICH is a small unlisted PLC in which Western holds 29.9%. It holds land pendingplanning permission for housing at Milngavie, adjacent to Dougalston golfcourse, just north east of Glasgow. As it may take many years for thedevelopment to progress, we are in discussion with the board of ICH to consideran acquisition of an active business. Mr. Robotham and I are directors of ICH.General PortfolioWith the exception of Sanctuary, all areas of our General Portfolio performedwell. Our investments in FTSE 100 and FTSE 250 stocks, which comprise 45% ofthe General Portfolio, increased in value by more than 30%. Our investments inFTSE Small Cap and FTSE Fledgling stocks, which make up 28% of our GeneralPortfolio, fared less well with growth of only 9% primarily due to poorperformances by UCM and Bioquell. Our AIM stocks grew in value by 13%,marginally ahead of the FTSE AIM index, and growth in our overseas holdings was10%.ConclusionDespite weak consumer demand, we remain confident and will utilise the balanceof our available facilities both cautiously and "stock specific". July andAugust have been good months for stock markets, and at the time of writing ournet asset value has moved up to 92.9p from 86.5p at 30th June 2005. Barringunforeseen circumstances, your Directors intend to at least maintain thedividend in the year ahead. D.C. MARSHALL Chairman31st August 2005 Profit and Loss AccountFor the year ended 30thJune 2005 2004 ‚£000 ‚£000 Income from investments in: Listed strategic undertakings 106 104 Other listed undertakings 173 164 -------- -------- 279 268 Interest receivable - 2 Administrative expenses (308) (250) Surplus/(loss) on disposal of listed undertakings 461 (248) Net (charge)/release of provisions against investments (209) 570 -------- -------- Operating profit 223 342 Interest payable (66) (30) -------- -------- Profit on ordinary activities before taxation 157 312 Taxation (4) (5) -------- -------- Profit on ordinary activities after taxation 153 307 Dividends (252) (239) -------- -------- Retained (loss)/profit for the year (99) 68 ===== ===== Earnings per share * 1.40p 2.84p Diluted earning per share * 1.40p 2.84p * The comparative figures for 2004 have been adjusted There are no recognised gains or losses other than the above profit for theyear and accordingly no separate statement of recognised gains and losses isshown. All profits and losses are on continuing activities. Balance Sheet At 30thJune 2005 2004 ‚£000 ‚£000 Fixed Assets Investments 10,932 9,674 -------- -------- Current Assets Debtors 67 100 Cash at bank and in hand 25 10 -------- -------- 92 110 Creditors (amounts falling due within one year) (1,973) (607) -------- -------- Net Current Liabilities (1,881) (497) -------- -------- Net Assets 9,051 9,177 ===== ===== Capital and Reserves Called up share capital 4,351 4,351 Share premium account 1,646 1,646 Warrants reserve 355 355 Profit and loss account 2,699 2,825 -------- -------- Shareholders' Funds (all equity) 9,051 9,177 ===== ===== Cash Flow StatementFor the year ended 30thJune 2005 2005 2004 2004 ‚£000 ‚£000 ‚£000 ‚£000 Net cash outflow from operating (2) (23)activities Returns on investments and servicing of finance Interest paid (66) (30) Interest received - 2 -------- -------- (66) (28) Taxation paid (4) (5) Financial investment Proceeds of disposal of fixed asset 2,362 2,639 investments Purchase of fixed asset investments (3,368) (2,386) -------- -------- Net cash (outflow)/inflow from financial (1,006) 253 investment activities Equity dividend paid (239) (226) Financing Compensation to shareholders on share (27) - consolidation -------- -------- Increase in net debt (1,344) (29) Net debt at start of year (268) (239) -------- -------- Net debt at end of year (1,612) (268) ===== ===== Notes:- 1. The dividend for the year of 2.32p per share (2004 - 2.20p adjusted for the share consolidation and sub-division) will be paid on 7th October 2005 to shareholders on the register at the close of business on 9th September 2005. 2. Earnings per share are based on the profit on ordinary activities after taxation and on 10,878,005 shares (2004 - 10,877,965 adjusted for the consolidation and sub-division) being the weighted average number of shares in issue during the period. At 30th June 2005 and 2004 the warrants in issue were not dilutive. 3. The net assets per share are calculated taking investments at market value and before providing for any tax that may arise on realisation. 4. The financial information in this preliminary announcement of unaudited results does not constitute statutory accounts within the meaning of Section 240(5) of the Companies Act 1985. The audited accounts of Western Selection P.L.C. for the year ended 30th June 2004 have been reported on with an unqualified report by the company's auditors in accordance with Section 235 of the Companies Act 1985 and have been delivered to the Registrar of Companies. Copies of this notification are held at the Company's office, 30 City Road,London, EC1Y 1BQ (tel. 020 7448 8950) and are available for a period of 14 daysfrom that date of this announcement. The audited accounts for the year ended 30th June 2005 will be sent toshareholders on or before 5th September 2005.ENDWESTERN SELECTION PLC