1996 Preliminary Announcement of Results
JARDINE STRATEGIC HOLDINGS
LIMITED
PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31ST DECEMBER 1996
RESULTS
Jardine Strategic Holdings Limited today
announced that the Group recorded a net profit for 1996 of US$302
million, an increase of 3% over the previous year. Excluding
discontinued activities and other non-recurring items the profit
would have shown a decline of 9% for the year.
Earnings per ordinary share were US¢37.92,
compared with US¢38.02 in 1995. Earnings per ordinary share,
excluding non-recurring items, showed a 13% decline.
On a fully-diluted basis the net asset value
per ordinary share, based on the market price of the Company's
holdings, recorded a growth of 18% to US$5.75 during 1996.
DIVIDENDS
The Board is recommending a final dividend
of US¢9.90 per ordinary share which, together with the interim
dividend, gives an unchanged dividend for the full year of US¢14.50 per ordinary share.
A preference dividend at the rate
of 7.5% per annum on the Company's outstanding convertible preference
shares will be payable on 7th May 1997 to preference Shareholders
registered at the close of business on 28th April 1997.
CORPORATE EVENTS
In September 1996 the Company initiated
a share repurchase programme to buy back up to 50 million ordinary
shares, following which some 17 million shares were acquired.
In March 1997 the share repurchase programme was extended with
the announcement that the Company was to make a Bonus Issue of
Put Warrants on the basis of one Warrant for every 20 ordinary
shares held. Each Put Warrant entitles the holder to sell back
to the Company one ordinary share at a price
of US$3.80 on 7th July 1997. The warrants can be traded, and
a cash alternative is available to Shareholders. The Directors
believe that the Bonus Issue allows all ordinary Shareholders
to benefit directly from a programme designed to enhance earnings
and net asset value per share. Jardine Matheson has indicated
that it will be retaining its entire shareholding in the Company.
GROUP REVIEW
Turning to the operations, the Chairman,
Mr Henry Keswick, said that Jardine Matheson reported a net profit
for 1996 of US$300 million, down 29% on 1995. Excluding the effect
of non-recurring items in both years, profit declined 6% to US$356
million. Jardine Pacific's profit from underlying businesses
was down 7% at US$94 million, primarily due to weaker performances
in its Restaurant and Shipping operations, and to a difficult
Thai market affecting its Engineering & Construction businesses.
Jardine Pacific's overall result was also significantly lower
mainly due to provisions of some US$47 million for the disposal
of its Sizzler restaurants in Australia. Its life assurance business,
which had previously had a negative impact on earnings, has now
been sold for US$163 million, realising a profit of some US$130
million for 1997.
Progress was made by Jardine Pacific in
its strategy of developing large businesses, with significant
investments in information technology products and services, instalment
finance and new infrastructure projects in Hong Kong. It also
increased its investment in the Philippines. A focused business
portfolio, reduced start-up losses and returns from new investments
should enable Jardine Pacific to return to profit growth in 1997.
Jardine International Motors experienced
a difficult market in Hong Kong for most of 1996, but the year
ended on a positive note as demand improved. The group reported
a profit of US$69 million, an increase of 9% excluding the 1995
exceptional item, with better performances in the United Kingdom,
France and the United States. The outlook is for mixed markets
in 1997 with lower margins in Hong Kong, and the company will
do well to match last year's earnings.
Jardine Fleming produced a net profit from
operations of US$108 million in 1996, down 11%, and the overall
result was further affected by an exceptional charge of US$26
million relating to regulatory issues arising in earlier years.
Asia-Pacific equity markets performed relatively poorly in 1996,
which provided a difficult backdrop for the group's investment
management arm. Funds under management were US$20 billion at
the year end. The unit trust and brokerage operations performed
well in the difficult markets, and the group maintained its prominent
position in the Greater China markets. Jardine Fleming is now
well placed to benefit from the expected strengthening of Asian
markets and an inflow of funds from the United States and Europe.
JIB Group had a record year in 1996, with
increased profitability from all divisions despite continued fierce
competition in insurance markets. Profit before tax of £28
million was up 29% from 1995. The year ended with the announcement
of a merger with Lloyd Thompson, as a result of which the Group
now has a 34% interest in the renamed Jardine Lloyd Thompson.
The merger should provide a solid foundation for growth by combining
specialist skills in the London market with an international network,
especially in the Asia-Pacific Region.
Dairy Farm increased its investment in its
established businesses in 1996 and continued to develop new operations
in Asia. Trading profit declined 31% to US$168 million. There
were poor results from Australia and the United Kingdom and increased
start-up costs, although improved performances were recorded in
Hong Kong, New Zealand, Singapore and Spain, and Maxim's again
produced excellent figures. The overall result was further affected
by repositioning provisions of US$78 million. In Australia, Franklins'
new format has been well received, and the group is to convert
its remaining 'No Frills' stores to 'Fresh' over the next four
years, requiring a write down of fixed assets. In the United
Kingdom, Kwik Save is also undertaking a three year repositioning
programme of its stores following a comprehensive review. Dairy
Farm's return to profit growth will come from adapting its mature
businesses to meet changing retail environments and from its new
ventures in the high growth Asian economies.
Hongkong Land's profit for 1996 was US$432
million, compared with US$415 million in 1995, excluding the effect
in both years of Trafalgar House. The group's Grade A office
buildings in Hong Kong's Central business district continued to
perform well, and saw a substantial appreciation with the total
value of the portfolio increasing 27% to US$9.6 billion. Net borrowings represented
4% of shareholders' funds. It was an active year for Hongkong
Land, with new property developments in Hong Kong, Singapore and
the Philippines, and the first steps in
building a portfolio of infrastructure projects in the Region.
While the company's earnings are expected to be flat in 1997
as a result of the rental reversion cycle, its new initiatives
will provide the foundation for longer-term growth.
Mandarin Oriental achieved a record profit
in 1996 of US$60 million with excellent results from its two Hong
Kong hotels and a further improvement by Mandarin Oriental, Manila.
The group's portfolio was enlarged with the reopening of its
properties in Hawaii and Surabaya, Indonesia, following renovation,
and the acquisition of the Hyde Park Hotel in London. Work is
also progressing towards the opening of its new Kuala Lumpur hotel
by the end of 1997. The costs associated with establishing the
new hotels in their respective markets will inevitably impact
results. However, the positive trends at Mandarin Oriental's
Hong Kong and Manila hotels are continuing and an overall improvement
is expected in its other Asian hotels in 1997.
Cycle & Carriage reported a profit of
S$200 million, an increase of 10%. Weaker vehicle sales in Singapore
were offset in part by improved results from its other motor interests
in Malaysia and Australia. The overall result also benefited
from income from residential property developments in Singapore.
Further contraction of the Singapore car market is expected in
1997, which will put pressure on margins. Returns from property
developments should improve, however, and the result for the year
is expected to be satisfactory.
The Company has increased its interest in
EON to 14% by the acquisition of a further 12 million shares for some US$114 million.
This investment is seen as an opportunity of increasing Jardine
Strategic's exposure to the successful Malaysian economy and it
is the Company's intention to remain a supportive minority shareholder.
Connaught Investors, in which the Company
holds a 45% interest, saw its net assets increase 20% during the
year to US$615 million, based on the market value of its holdings.
PROSPECTS
In conclusion, Mr Henry Keswick said, "The Group's holdings are all in fundamentally strong businesses based in the Asia-Pacific Region. In an increasingly competitive environment, their management focus is as much on improving operational performance as on identifying new business opportunities. We are confident that they have the capacity to succeed in both of these objectives."
| © Copyright 1996-2008 irasia.com Ltd. All rights reserved. Tel: (852) 2831-9792. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |