JARDINE STRATEGIC HOLDINGS LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 1995
RESULTS
Jardine Strategic Holdings Limited today
announced that its consolidated net profit for the year ended
31st December 1995 after taxation, outside interests and preference
dividends, amounted to US$292 million, compared with US$337 million
in 1994, a decline of 13%. Earnings per ordinary share were US438.02
in 1995, a decrease of 19%.
At 31st December 1995 net assets per ordinary
share, based on the market price of the Company's holdings, were
US$4.79, a decrease of 7%.
DIVIDENDS
The Directors recommend a final dividend
of US49.90
per ordinary share, which, together with the interim dividend
of US44.60
per ordinary share, will make an unchanged total annual dividend
of US414.50
per ordinary share.
A preference dividend at the rate of 72%
per annum on the Company's outstanding convertible preference
shares will be payable on 7th May 1996 to preference Shareholders
registered at the close of business on 29th April 1996.
CORPORATE EVENTS
The Company made a US$420 million rights
issue in May, the proceeds of which were used to repay debt and
to strengthen the Company's capital base for future investment.
GROUP REVIEW
Turning to the operations of the Group,
the Chairman, Mr Henry Keswick, said that Jardine Matheson reported
mixed results from its main operating companies in 1995 and profit
fell 7% below 1994. The overall result included an exceptional
profit of US$94 million arising from the disposal
of the group's instalment finance business. Jardine Pacific's
trading profit decreased 7% being held back by poor performances
in its Trading & Distribution operations in Japan and Hong
Kong and its Restaurant activities in Australia. There were,
however, good results from Engineering & Construction.
Jardine International Motors reported an
18% reduction in its trading profit principally due to weakening
demand in the Hong Kong and China markets. JIB Group's underlying
earnings showed a 13% decline due to continuing pressure on margins;
during the year the company reorganised its activities in the
United Kingdom and disposed of its United States retail operations.
Jardine Fleming experienced lower levels
of activity in Asian securities markets in 1995 reporting a profit
42% below its 1994 record result. Funds under management remained
steady at US$22 billion and steps were taken to expand further
its investment management, securities broking and corporate finance
activities throughout Asia.
Dairy Farm International's overall result
suffered from reduced margins reflecting the increasingly competitive
nature of the industry worldwide and from an exceptional charge
of US$36 million in respect of an inventory adjustment in Australia.
Trading profit was 9% below that of 1994. The company continued
to invest both in its established markets and in building new
businesses in Asia. The Hong Kong operations performed well and
the other Asian businesses saw further expansion. In Australia
results were poor but the business is being refocused to improve
margins. In Spain, Simago showed signs of improvement but in
the United Kingdom, Kwik Save reported a 10% reduction in profit
due to strong price competition. The NestlJ
Dairy Farm manufacturing joint venture continued its development
in Hong Kong and China, and Maxim's restaurants had an outstanding
year.
Continuing positive rental reversions and
a 98% occupancy helped Hongkong Land to achieve growth in operating
profit in 1995, but the overall result was down 30% as a result
of losses in its associate, Trafalgar House, for which an offer
has subsequently been received. Net asset value per share fell
18% reflecting a decline in open market rentals in Hong Kong,
but current expectations are for capital values to stabilise in
1996. Hongkong Land International's office building in Hanoi,
Vietnam, was completed and is letting well and a second building
is under development. The company entered into a residential property
joint venture in the Philippines and is seeking property and infrastructure
investments elsewhere in Asia.
Mandarin Oriental reported a record result
with profit up 10% following a stronger second half. The company's
hotels in Hong Kong and Manila made an excellent contribution
while those in Bangkok, Jakarta and Macau continued to recover.
In Singapore persistent low room rates again affected the result.
Mandarin Oriental's development activity was focused on the restoration
of the group's newly acquired hotels in Hawaii and Surabaya, which
have now reopened, and the start of construction in Kuala Lumpur.
Cycle & Carriage reported a 47% increase
in net profit. Its motor business in Singapore had an excellent
year and in Malaysia and Australia results were good. The group's
property also had a successful year completing the sale of one
residential development and launching three others in Singapore.
A new office tower is also under construction in Kuala Lumpur.
In June, Jardine Strategic invested US$182
million in a 9% interest in Edaran Otomobil Nasional Berhad, a
major Malaysian motor distribution and finance group, underlining
the Group's commitment to the developing Malaysian economy.
Connaught Investors, in which Jardine Strategic
has a 45% interest, holds minority investments primarily in companies
with existing or prospective business links to the Jardine Matheson
Group. During the year Connaught Investors called up the balance
of its outstanding committed share capital, the Company's share
of which was US$109 million and was substantially satisfied
by the transfer of quoted investments. The underlying net asset
value of the Company's investment in Connaught Investors was US$231
million as at 31st December 1995.
PROSPECTS
In conclusion, Mr Henry Keswick said, "With
strong balance sheets and well focused operations the Group's
underlying businesses enter 1996 in a good position to capitalise
on their concentration in the Asia-Pacific Region. The year has
started encouragingly for Jardine Strategic and its prospects
are for a return to profit growth."
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