Reports Audited 2006 Financial Results
Morgan Meighen & Associates
Toronto, Canada, February 7, 2007 -- Third Canadian (TSX:THD) had another terrific year, extending its record of particularly strong performances to four consecutive years. Once again, the Company's total net asset value and market returns for 2006 would place it among the top Canadian equity funds. The annual net asset value and market returns, with dividends reinvested, were 24.6% and 25.3% respectively, compared to the benchmark S&P/TSX Composite Index (S&P/TSX) which rose 17.3% on a total return basis.
The Company's net assets at December 31, 2006 were $268,433,000, representing a 22.2% increase from $219,701,000 at the end of 2005. This increase can be largely attributed to the market return of 28.3% in its principal asset segment, consisting of holdings in Canadian General Investments, Limited (CGI) and Canadian World Fund Limited (CWF).
Third Canadian continued to benefit from the receipt of special capital gains dividends from its large holding in CGI. At year-end 2006, the Company received a special capital gains dividend from CGI of $9.6 million (before tax), an increase of roughly $2.0 million over 2005.
In addition to the payment of four quarterly dividends of $0.075 per share, Third Canadian paid a year-end extra dividend of $0.80 per share on December 29, 2006. In 2005, the per share amount of the year end extra dividend was $0.45.
Third Canadian, established in 1928, is the second oldest North American listed closed-end fund. The Company's non-principal assets consist of a diverse range of Canadian and foreign securities. Supported by the large holding in CGI, leverage is obtained via bank borrowings at favourable interest rates.
FINANCIAL HIGHLIGHTS
(in thousands of dollars, except per share amounts)
For the Year Ended
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December 31, December 31,
2006 2005
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Net investment income 2,363 2,308
Net gain on investments 51,655 68,008
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Increase in net assets resulting from
operations 54,018 70,316
Increase in net assets resulting from
operations - per share 11.24 14.63
As at
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December 31, December 31,
2006 2005
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Net assets 268,433 219,701
Net asset value per share 55.85 45.71
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Further to the audited 2006 financial results, Third Canadian's net asset value per share (NAV) at December 31, 2006 of $55.85 differed from the unaudited $55.35 previously reported as a result of a change in an estimate. The change related to a lowering of the rate used for computing future income taxes on the unrealized gains on its principal assets.
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