Cdn General Investments Reports Six Month Results.TORONTO--(BUSINESS WIRE)--July 23, 1998--A special dividend paid in the second quarter maintains CGI's record as one of the highest yielding stocks on the Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. . Payments of $2.70 in stock and cash over the past twelve months result in a current 12-month yield of 16.9 percent based on the June 30 closing price of $16.00. The capital gains dividend facility, as allowed under investment corporation status, continues as the major impetus Impetus is a stimulus or impulse, a moving force that sparks momentum. Impetus may also refer to:
CGI's market return, as measured by share price appreciation with dividends reinvested was 5.5 percent for the six months and 22.4 percent for twelve months ending June 30, 1998. The TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). 300 Composite Index Composite Index A grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time. Also known simply as a "composite". was up 10.0 percent and the TSE 300 Total Return Index 10.8 percent year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. and 14.4 percent and 16.2 percent, respectively, for the twelve months. OPERATING RESULTS A net loss of $855,000 was recorded for the six months to June 30, 1998 compared to net income of $1,099,000 for the same period in 1997, or a net loss of $0.05 per share compared to net income of $0.06 per share. A one-time $2,165,000 payment in the first quarter, representing the interest portion of the 1994 issuer bid litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. result, distorted year-over-year comparables. Net income for the first six months of 1998 otherwise would have been 19.2 percent higher than in the comparable 1997 period. NET ASSETS Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. Net assets of $296,804,000 at June 30, 1998 were down 3.4 percent from $307,195,000 on December 31, 1997. However, year-over-year, net assets still showed an increase of 1.4 percent from $292,700,000 on June 30, 1997. Basic net asset value per share was $16.75, compared to $17.33 at year-end and $16.51 a year ago. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , NAV See navigation system and navigation bar. was $15.60 compared to $15.55 at June 30, 1997. Conclusion of the litigation resulted in a $8.9 million one-time payment in the first quarter. Without this cost, net asset growth would have been almost 3 percent higher. THE MARKET A few factors were influential in shaping sector returns of the TSE. Mergers and acquisitions, the Asian setback setback In architecture, a steplike recession in the profile of a high-rise building. Usually dictated by building codes to allow sunlight to reach streets and lower floors, the building must take another step back from the street for every specified added height interval. , currency trends and commodity pricing heavily affected specific stocks and broad groupings. Resource sectors have become severely depressed with little sign of a near-term reversal. The TSE resources weighting has been reduced to 21.8 percent at June 30 from 25.6 percent at the beginning of the year in response. Utilities and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. continued to lead in TSE performance. Mergers, whether announced or speculated have been catalysts for big moves in some stock prices. The non-inflationary economy and cheapening dollar should help to combat any near term decline in the earnings outlook for some companies and, in turn, support higher valuations on a selective basis. The search by investors for income yielding securities has also attracted buying. PORTFOLIO Through the quarter we continued to hold positions in major mining, oil, gas, gold and diamond companies. The Corporation's strategy generally calls for long term positioning in Canada's world scale resources rather than trying to predict the short term cycles. CGI CGI in full Common Gateway Interface. Specification by which a Web server passes data between itself and an application program. Typically, a Web user will make a request of the Web server, which in turn passes the request to a CGI application program. upgraded its weighting in banks. Real estate was reduced, after capturing most of the early run up in favourable conditions for the resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. of this sector. Management continues to look for outperformance in special situations, this year adding Saputo Group Inc. and Ritchie Bros. Auctioneers Ritchie Bros. Auctioneers (NYSE: RBA & TSX: RBA), sells, through unreserved public auctions, a broad range of used and unused industrial equipment including equipment utilized in the construction, transportation, material handling, mining, forestry, petroleum, marine, Incorporated. Income returns continue to be augmented in current softer markets. DISCOUNT The discount on CGI's shares has ranged mostly in single digits for the quarter and an intra-day premium has been observed more than once. At June 30, the discount stood at 4.5 percent, low relative to North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. or U.K. listed closed-end funds Closed-end fund An investment company that issues shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value. Related: Open-end fund. and trusts in general. Year-to-date, the CGI share discount has averaged 8.5 percent. PREFERRED SHARES Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. On July 15, 1998 CGI announced a special meeting of shareholders of the Corporation to be held on August 24, 1998 to seek approval for a special resolution authorizing the Corporation to amend its articles to create a class of preference shares issuable in series. Information regarding this initiative has already been sent to CGI shareholders. The availability of up to $75 million in additional funds through a preferred share issue at historically low interest rates could prove timely for investment for growth and income. CGI's investment corporation status under the Income Tax Act is favourable for the issuance of preferred shares. INVESTOR RELATIONS Investor relations The process by which the corporation communicates with its investors. CGI is on the Internet at www.mma-investmgr.com. Information provided includes quarterly and annual reports, press releases, NAVs, discounts, market returns and top ten holdings. -0-
Six months ended
June 30
($000, except per share amounts)
1998 1997
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Income: Dividends $ 2,284 $ 1,859
Interest & miscellaneous 308 372
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2,592 2,231
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Expenses: Management Fees 1,671 1,402
Interest related to litigation 2,165 -
Other 361 314
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4,197 1,716
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Net income (loss) before taxes (1,605) 515
Income tax recovery 750 584
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Net income (loss) $(855) $ 1,099
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Net income (loss) per share $(0.05) $ 0.06
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Basic net asset value per share $ 16.75 $ 16.51
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Number of shares outstanding 17,723,889 17,723,889
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-0- Per share information reflects the capital gains stock dividends paid in June 1997, December 1997 and June 1998. In the United Kingdom, copies of the Corporation's first quarter report will be made available at the U.K. Transfer Agent, R-M Trust Co., Balfour House, 390 High Road, Ilford, Essex, 1G1 1NQ. Phone 0181-478-1888.
CONTACT: Canadian General Investments, Limited
Michael A. Smedley, 416/366-2931
416/366-2729 (FAX)
e-mail: cgifund@mma-investmgr.com
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