Life Offices Opps - Final Results
08 Février 2000 - 2:36PM
UK Regulatory
RNS Number:1907F
Life Offices Opportunities Tst PLC
8 February 2000
LOOT BENEFITING FROM LIFE INDUSTRY RESTRUCTURING
The investment objective of Life Offices Opportunities Trust Plc (LOOT)
is to achieve long term capital growth from a diversified portfolio of
with-profits life assurance policies. The Trust, with total assets of
#34.3 million, is managed by Scottish Value Management ('SVM'), the
independent Edinburgh based investment boutique.
Results for the year ended 31 December 1999
Salient Points
Net asset value per share increased by 15.5% to 140.5p
Significant benefits to accrue to the Fund as life office
reconstruction continued with the announcement of three demutualisations
Equity markets performed well and funds with a higher equity
proportion are likely to declare bonuses that reflect this
Portfolio is well placed to benefit from future asset growth and
restructuring activity
For further information please contact:
Colin McLean /
Brian Moretta Scottish Value Management 0131 226 6699
Roland Cross Broadgate Marketing 020 7726 6111
LIFE OFFFICES OPPORTUNITIES TRUST PLC
Chairman's Statement December 1999
I am pleased to report that your Company continued to grow during 1999.
Over the year, the Company's net asset value per share increased by
15.5% to 140.5 pence. The investment objective of your Company is to
achieve long term capital growth and no dividend is payable.
The portfolio comprises a spread of exposure to endowments, with an
emphasis on life offices that we believe can benefit from the
restructuring of the life industry. During 1999 no further policies were
purchased. Life industry reconstruction has continued however, with
significant benefits to accrue to the Fund from events this year. Three
offices have agreed to demutualise over the year. NPI has agreed to be
taken over by AMP, the policyholders of Sun Life of Canada have voted to
demutualise and list on the Canadian stock exchange and Scottish Widows
has agreed to be taken over by Lloyds TSB. While the exact amount of
benefits has yet to be announced in all cases, it seems that total
benefits of over #150,000 will accrue to your Company without
prejudicing the future bonus prospects from these companies.
The underlying assets in with-profit funds had a mixed year in 1999.
Equity markets did very well, although many institutions were
underweight in the best performing sectors. Property had a satisfactory
year, but gilts produced a negative return. As a consequence, the
stronger funds with a higher equity proportion should have had a better
year, and the bonuses declared so far this year reflect this. After the
bonus cuts of early 1999, rates had appeared to be at a sustainable
level. Life offices have the ability to implement bonus changes
gradually, smoothing the volatility of investment returns. We would hope
that the worst of bonus cuts are past, although this depends on future
asset returns and the conservatism of life offices.
Annuity guarantees looked like being a big problem for the life industry
last year. The Appeal Court ruling in the Equitable Life court case will
have implications for some life offices, although the House of Lords
will make a final ruling later in the year. However, higher gilt yields
may have alleviated the problem and it looks unlikely that endowment
policyholders will have to bear much of the cost.
With a share issue in April, gearing has reduced over 1999 but is still
significant at 16.8%. New purchases of policies will be made if
attractive opportunities appear, but we envisage that future purchases
will be small. We believe that the portfolio as it stands is well
placed, and should benefit from future asset growth and restructuring
activity.
John Brumwell
Chairman
Summarised Statement of Total Return
Year to 31 December Year to 31 December
1999 1998
Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000
Gains on - 5,497 5,497 - 4,124 4,124
investments
Income 16 - 16 9 - 9
Investment - (321) (321) - (229) (229)
management fees
Other expenses (122) (214) (336) (96) (152) (248)
------ ----- ----- ----- ------ ------
-- --- --- --- -- --
Return before (106) 4,962 4,856 (87) 3,743 3,656
interest and
taxation
Bank overdraft - (358) (358) - (198) (198)
interest
------ ----- ----- ----- ------ ------
-- --- --- --- -- --
Transfer to / (106) 4,604 4,498 (87) 3,545 3,458
(from) reserves
===== ===== ===== ===== ===== =====
Return per (0.45p) 19.36p 18.91p (0.39p) 15.97p 15.58p
ordinary Share
Balance Sheet as at as at
31 December 31
1999 December
1998
#'000 #'000
Endowment policies 40,043 32,928
Net current (755) (5,906)
liabilities
Bank loan (5,000) -
----------- ---------
--
Ordinary shareholders 34,288 27,022
funds
====== ======
Net asset value per 140.52p 121.71p
ordinary share
Notes
1. The above results reflect the adoption in the accounts of the
Statement of Recommended Practice (SORP) issued by the Association of
Investment Trust Companies. Investment management fees, policy advisory
fees and bank overdraft interest have been allocated 100% to capital in
the year to 31 December 1999 (1998: same)
2. Returns per Ordinary Share are based on 23,779,743 ordinary shares
in issue during the year (1998 - 22,202,000). The number of shares
in issue at 31 December 1999 was 24,400,000. (1998 - 22,202,000).
3. The above figures do not constitute full group accounts in terms of
Section 240 of the Companies Act 1985. The accounts for the year
to 31 December 1998, which were unqualified, have been lodged with
the Registrar of Companies. The annual report and accounts will be
mailed to shareholders and will be lodged with the Registrar of
Companies during February 2000. Copies will be available for
inspection at 7 Castle Street, Edinburgh, the registered office of
the Company.
END
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