In making the announcmnet the Company noted the following highlights:
· Robert Fleming stake sold for profit of US$465 million
· Increased shareholdings in core businesses
· Earnings affected by poor results from Dairy Farm
· Asset values improve significantly
Performance
Jardine Strategic Holdings Limited today announced that there were mixed performances from Jardine Strategic's business interests in 2000 despite a general improvement in their main Asian markets. A good result from Jardine Matheson, particularly from its Jardine Pacific operations, was offset by the losses recorded in Dairy Farm and a smaller contribution from Hongkong Land resulting from the closing phase of its negative rental reversion cycle.
Jardine Strategic recorded a profit for the year, excluding non-recurring items, of US$102 million, a decrease of 27% from 1999. The overall result benefited from the exceptional profit arising on the disposal of the Group's holdings in Robert Fleming, partially offset by the Company's US$74 million share of the charge made by Dairy Farm against the asset values of its Australian supermarket chain. After non-recurring items, a profit of US$535 million, or US¢63.94 per share, was recorded, compared with US$157 million, or US¢17.52 per share, in 1999.
Excluding non-recurring items, earnings per share declined 22% to US¢12.21, compared with US¢15.68 in 1999. Net asset value per share, based on the market price of the Company's holdings, recorded a strong increase of 27%, rising to US$5.07 at the year end.
The Board is recommending a final dividend of US¢9.90 per share, which, together with the interim dividend of US¢4.60 per share, gives a dividend for the full year of US¢14.50 per share, unchanged from 1999.
Group Review
Turning to the operations, the Chairman, Henry Keswick, said that the Group's strong operating cash flows allow for investment in its core businesses as well as for purchase of shares in Group companies when favourable market circumstances present themselves.
Jardine Strategic's earnings and net asset value per share were enhanced in 2000 by a share repurchase programme, under which the Company bought back 8% of its stock. The Company's attributable interests in its core investments were also increased, and at the year end it held 50% of Jardine Matheson, 62% of Mandarin Oriental, 60% of Dairy Farm, 37% of Hongkong Land and 26% of Cycle & Carriage.
These share purchases were funded in part by the proceeds from the sale of the Company's stake in Robert Fleming, with the balance being funded from existing resources and facilities. The effect has been to increase the Company's gearing to some 28%, which is considered appropriate in the improved Asian economic climate.
During the year the Group continued to rationalise its business portfolio, concentrating resources on those operations which merit increased investment by virtue of their market leadership or growth prospects.
There were also notable business initiatives in 2000, including the acquisition of The Rafael Group by Mandarin Oriental; the privatisation of Jardine Motors Group by Jardine Matheson; Cycle & Carriage's investment in Astra International; the regional development of Dairy Farm; the expansion of Jardine Lloyd Thompson's operations in the United Kingdom and the United States; and Hongkong Land's upgrading of its Central District portfolio.
In line with the Group's strategy of increased focus, the decision was taken prior to the year end that Connaught Investors, held 45% by Jardine Strategic, 45% by Hongkong Land and 10% by Jardine Matheson, should be re-organised. Connaught Investors' stake in Nelfi was distributed pro rata to the shareholders, and its Jardine Matheson shares were repurchased by that company at market price. Jardine Strategic then acquired the interests of its fellow shareholders in Connaught Investors for the market value of the underlying investments, paying US$208 million to Hongkong Land and US$46 million to Jardine Matheson.
Outlook
In conclusion, Henry Keswick said, "The trading environment in Asia remains good, subject to the effects of a possible slowdown in the US economy. We expect further progress from Jardine Matheson, Hongkong Land and Mandarin Oriental in 2001, but a turnaround in Dairy Farm remains the key to a material improvement in our earnings."