F&C splits shares to lower price: One-for-one offer to bring more investors

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The Independent Online
FOREIGN & Colonial Investment Trust, the pounds 1.7bn fund widely held by private investors, is dividing its shares in a one-for-one capitalisation issue.

F&C hopes the resulting lower share price will make its stock more attractive and marketable. The investment trust already has nearly 75,000 shareholders, 32 per cent more than a year ago, after the success of its savings scheme.

The rapidly rising costs of the savings scheme have prompted F&C to embark on a 'radical' cost reduction programme. It abolished monthly statements, changed dividend payments, and plans other improvements.

Michael Hart, F&C's manager, said the trust would keep the savings scheme minimums at pounds 25 a month or pounds 250 for lump-sums. It would still issue shareholders with a full report and accounts.

F&C is paying a final dividend of 2.37p to increase the total by 5 per cent to 3.52p a share. Pre-tax revenue for 1993 jumped by 28 per cent to pounds 35.2m, helped by a sizeable dividend from Pountney Hill Holdings. That stake almost tripled in value, making it F&C's second biggest holding.

The trust increased its net asset value by 31 per cent over 1993 to 296.1p a share, beating the 23 per cent rise in the FTA All-share index. F&C said it outperformed the average general investment trust by 2 per cent and outperformed its rivals by 60 per cent last year.

F&C said last year's successes included UK stocks (its holdings in Asda Property, Eurotunnel and Eastern Electricity did very well), and its investments in Europe and emerging markets.

Its failures included its enthusiasm for Japan, its exposure to US companies hit by concerns about brand values, and pharmaceuticals. Fisons and Wellcome fell by 45 and 32 per cent respectively, and Euro Disney fell by almost half.