Electra Investment Trust releases third quarter results

The company reports a strategy of releasing value in its investment portfolio and returning capital to shareholders. The big question remaining is what happens to Electra next.

Electra's results showed that net asset value per share was up 14.1 per cent to £10.85 compared with £9.51 at the same time last year. Since March 1999, when Electra adopted a plan of winding up operations to defeat a hostile takeover from 3i, £800m of capital has been returned to shareholders.

Brian Williamson, chairman of Electra Investment Trust, said: “Since March 1999, £1bn has been received from the sale of investments which is equivalent to 75 per cent of the £1.36bn valuation of the portfolio at 28 February 1999.

“Given the speed of this achievement, it is now appropriate for the board to consider in detail the most suitable options to address shareholders’ wishes for the future of Electra. I anticipate giving an update on progress by the Annual General Meeting, which is to be held on 28 February 2001.”

When its results were released in May for the period ended March 31 2000, Electra said in a statement: “Looking further ahead, the Board is aware of the views that a number of shareholders have expressed in favour of providing some means of continuation or a rollover vehicle to enable those investors who wish to do so to maintain a holding in a successor vehicle. This is something that the Board will take careful account of in due course as the realisation of Electra's portfolio proceeds and as further value becomes available for distribution to shareholders.” Electra's assets are managed by Electra Partners which is now owned by its senior executives.

Electra has seen significant returns on investments this year. These have been used to repay borrowings arranged to finance the tender offer which was completed in 1999 and to fulfil existing investment.

£450m facility was put in place and £250m was used for the subsequent tender offer, leaving facilities available for the company to make on-market share purchases.

At the year end, 62 per cent of the portfolio was invested in Europe, 23 per cent in North America, 6 per cent in South America and 9 per cent in Asia and India.

The company says that no dividend is proposed in respect of the year ended 30 September 2000 and it is unlikely that dividends will be paid in the foreseeable future.