Morningstar Rating™

as at 30 September 2013

Financial Results Announced

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Manager's Comment for November 2014

This was a good month for us as markets continued to recover from their recent lows in mid-October.  Importantly some of the key contributions to performance came from corporate events.  The first was Forterra Trust, which although not a particularly large investment, nevertheless was able to inflict a fair amount of pain as its share price fell by 36% during the 2014 financial year.  Since the end of September, it has jumped by 57% as its largest shareholder, Nan Fung, launched two attempts to take the company over.  The first attempt was launched in October and was set at a price of $1.85.  This received an unenthusiastic response and has since been followed by a second offer at $2.25.  This won the support of the second largest shareholder and allowed Nan Fung to increase its ownership above the 50% level.  Subsequent purchases in the market have taken their control to 90%, which includes the c. 4% stake held by AVI funds. 

There were strong performances from Investor (up 6.6%), Tui AG (up 12.1%) and WM Morrison (up 15.3%).

The main detractor from performance was Aker, whose shares fell a further 7.3% during November, further compounding the sharp falls suffered by the company since the oil price started to fall in June.  With a portfolio of assets dominated by oil related businesses it is unlikely that Aker’s share price will move in a different direction to that of the oil price in the near term.  However, with a prospective dividend yield of over 9%, a discount of over 40% and financially sound assets there is a strong case to be made that Aker’s shares will at some point bounce very sharply from these very depressed levels. 

We made two new investments over the month, and added to some of the recent investments we made in Europe.

Retail Investors advised by IFAs

The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers (“IFAs”) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (“FCA”) rules in relation to non-mainstream investment products and intends to continue to do so. The shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are shares in an authorised investment trust.

British Empire Securities and General Trust plc

British Empire Securities and General Trust p.l.c. (British Empire) is a closed-end investment trust with shares listed on the London Stock Exchange in the FTSE 250 Index. The investment objective is to achieve capital growth through a focused portfolio of investments, particularly in companies whose share prices stand at a discount to estimated underlying net asset value. British Empire shares can be purchased and held in a Stocks & Shares ISA or a Share Saving scheme through the investment managers, Asset Value Investors.

Asset Value Investors is an employee owned management company founded in 1985 to manage the assets of British Empire, which was a £6 million trust at that time. Today, British Empire has assets of over £856* million and is managed by John Pennink and Joe Bauernfreund.

British Empire Securities Share Price Updated 16/12/14
Price Ord 501.00
NAV 561.92
Prem/-Disc -10.84
Dividend Yield 2.10


Year End 30 Sept
Accounts Published 30 Nov
General Meeting Dec
Dividend Paid Jan, June
Launch Date July 1889

Price Performance December 2003 to December 2013 †

How a typical investment of £11,280 performed over the last five years ‡

Initial Investment

British Empire Securities and General Trust has had an average annual NAV total return of 12.4%* since 1985.

* Figures at 31 December 2013

† ‡ Gross annual returns to 31 December. Past performance should not be seen as an indication of future performance. The price of investments and the income may fall as well as rise and investors may not get back the full amount invested. British Empire uses gearing techniques (leverage) which will exaggerate market movements both down and up which could mean sudden and large falls in market value. Please refer to the Key Features Document for further details of the risks affecting your investment. Performance figures are cumulative and based on Price total return and do not include Plan charges. For more information, please call 0845 850 0181.

Tax treatment depends on the individual circumstances and may be subject to change in the future.