Half-yearly Report
Majedie Investments PLC
Half-Yearly Financial Report
31 March 2010
Majedie Investments PLC is a self-managed investment trust with total
portfolio assets under management of over £163 million as at 31 March 2010.
Our Objective is to maximise total shareholder return over the long term
whilst increasing dividends by more than the rate of inflation.
Our Benchmark is 70% FTSE All-Share Index and 30% FTSE World ex UK Index
(Sterling) on a total return basis.
Financial Highlights for the half year ended 31 March 2010
Net assets per share increased by 4.8% to 250.1p
Share price increased by 4.9% to 199.0p
Discount to net assets narrowed from 20.5% to 20.4%
Revenue Return per share increased by 176.6% to 13.0p
Interim dividend unchanged at 4.2p
Special dividend paid of 2.5p
Performance
Net asset value total return of 8.5%
Total shareholder return of 9.6%
Benchmark total return of 12.7%
Investment Objective and Policy Statement
Investment Objective
The Company's objective is to maximise total shareholder return over the long
term whilst increasing dividends by more than the rate of inflation.
Investment Policy
The Company invests principally in securities of publicly quoted companies
worldwide, though it may invest in unquoted securities up to levels set
periodically by the Board.
The overall approach is based on analysis of global economies and sector
trends with a focus on companies and sectors judged likely to deliver strong
growth over the long term. The number of investments held, together with the
geographic and sector diversity of the portfolio, enable the Company to spread
its risks with regard to liquidity, market volatility, currency movements and
revenue streams.
The Company's benchmark comprises 70% FTSE All-Share Index and 30% FTSE World
ex-UK Index (Sterling) on a total return basis. It is used to assess the
performance and risk of the Company and investment portfolio. Whilst
performance is measured against the benchmark, investment decisions and
portfolio construction are made on an independent basis. The Board however
sets various specific portfolio limits for stocks and sectors in order to
restrict risk levels.
Although, exceptionally, derivative instruments may be employed, usually for
hedging purposes and with specific prior approval of the Board, generally the
Company is a long-only investor and would be unlikely to use such instruments.
The Company will not invest in any holding that would, at the time of
investment, represent more than 15% of the value of its gross assets.
The Company uses gearing to enhance the long term returns to shareholders. The
Articles of Association give the Board the ability to borrow up to 100% of
adjusted capital and reserves. The Board also reviews the level of net gearing
(borrowings less cash) on an ongoing basis and sets a range at its discretion
as appropriate. The Company's current debenture borrowings are limited by
covenant to 66 2/3%, and any additional indebtedness is not to exceed 20%, of
adjusted capital and reserves.
Chairman's Statement
The six months to 31 March 2010 saw a continuation of the nascent recovery in
the global economy, notwithstanding the unevenness of that recovery, with
economies in Asia and America leading the way.
Although the portfolio has been restructured and is performing in-line with
expectations we do retain some illiquid unlisted small cap investments which
have continued to drag on our performance during the period. Consequently on a
total return basis, the NAV and Share price for the six month period increased
by 8.5% and 9.6% respectively which compared to a 12.7% increase in the
benchmark.
Results
The Group's net profit before tax for the six months to 31 March 2010 was
£6.8m compared with £2.5m for the prior year period. Group income for the six
months was £7.6m, including total income from Majedie Asset Management Limited
(MAM) of £5.9m which provided £1.6m in the same period last year. Current
period MAM income includes a £5.4m special dividend, as compared to £1.4m
previously. This increase was partially offset by a reduction in portfolio
dividend income in the period. Total group costs of £1.9m are £0.3m higher
than last year reflecting non recurring expenditure this year on Javelin
Capital set up costs and current lower operating costs. The significant
increase in MAM dividends contributed to the increase in earnings per share of
177% to 13.0p from 4.7p for the same period last year.
As a result of the MAM special dividend and the related investment trust
minimum distribution requirement under UK tax legislation, the Board declared
a special interim dividend of 2.5 pence per share which was paid on 8 March
2010 to shareholders on the register on 26 February 2010. The Board has
decided that the ordinary interim dividend is to be maintained at 4.2 pence
per share, consistent with last year. The interim dividend will be paid on 30
June 2010 to shareholders on the register on 4 June 2010.
The MAM business continues to perform well. As a result of this strong
performance, and notwithstanding the large special dividend received during
the period the Board has maintained the carrying value of our 30% investment
at its existing level of £30m as at 31 March 2010.
Portfolio
The active management of the portfolio has now been split into core and
non-core components. The former, comprises holdings in mainly large-cap UK and
international stocks and a small number of carefully selected mid-cap
companies. The latter portfolio consists of the remaining small-cap stocks and
early stage investments, exits from which are being sought over time but which
are by their nature illiquid. The non-core portfolio now represents only a
small percentage of total assets.
A number of changes have been made to the core portfolio over the period, the
most important of which has been the decision to remain reasonably fully
invested in the markets and to maintain only relatively low levels of cash.
Investment in the overseas part of the portfolio has again been increased and
now is at a level approaching the 30% benchmark. This has enabled the
portfolio to benefit somewhat from the general depreciation of sterling over
the period.
One major theme in adding new investments to the portfolio has been to seek
companies exposed to growth in the Far East or beneficiaries from a decline in
sterling. Exposure to both the energy and mining sectors has thus been
increased and several support services companies such as de la Rue, Bunzl and
Group 4 Securicor have been added - all companies with strong overseas market
positions. Compass Group, another company with a strong international
franchise in the catering area has also been purchased and has performed
strongly over the period. The two smaller energy related holdings exposed to
the Indian market, KSK Holdings and Great Eastern Energy, have both fully
justified their retention within the core portfolio and have benefited from
the economic growth of the Indian sub-continent.
Markets have proved to be reasonably buoyant since the autumn as ample
liquidity and historically very low rates of interest have encouraged
investors to increase overall exposure to riskier assets. The Far East and
United States now seem to be recovering well from the recent recession whilst
the Eurozone is still beset by debt issues and here growth prospects appear
less attractive. Our focus will thus continue to be to source good quality
companies with sound cash flows and the potential to grow dividends
meaningfully over the medium to long term.
Javelin Capital
Steady but significant progress has been made with the establishment of our
new fund management business and we hope to begin operations, subject to the
receipt of the relevant approvals, shortly. We are confident that the offering
will be attractive in the marketplace and should provide a significant new
opportunity for the Company in the future.
Outlook
The recovery in markets which began from the low point reached in March 2009
has continued to gain pace, although it is clear that economic growth is
recovering more strongly in the Far East and the United States than in the
Eurozone and the UK. Nevertheless, the UK market has performed creditably
given its orientation towards large global companies in the energy and mining
industries. Purely domestic areas of the market such as utilities and some
smaller companies have tended to underperform as investment sentiment has
favoured more cyclical stocks. Overall, there are early signs of monetary
tightening in major jurisdictions which may depress market sentiment in the
short term, particularly if this gathers pace and if it is combined with
continued uncertainty within the euro area.
Andrew J Adcock
Chairman
18 May 2010
Portfolio Information
at 31 March 2010
Fund Analysis
Market Value % of
£000 Fund
Oil & Gas 21,342 13.0
Basic Materials 12,121 7.4
Industrials 13,374 8.2
Consumer Goods 10,205 6.2
Health Care 9,197 5.6
Consumer Services 8,808 5.4
Telecommunications 9,636 5.9
Utilities 3,544 2.1
Financials 21,906 13.4
Technology 5,421 3.3
Unlisted (note 7) 35,498 21.7
Total Investments at Fair Value 151,052 92.2
Cash 12,733 7.8
163,785 100.0
United Kingdom 116,500 71.1
Australia 766 0.5
United States 16,625 10.2
Continental Europe 8,101 4.9
Japan 3,359 2.0
Asia 5,701 3.5
Total Investments at Fair Value 151,052 92.2
Cash 12,733 7.8
163,785 100.0
The portfolio information comprises the investments at fair value of
£151,052,000 (including MAM at £30,000,000) and cash (as adjusted for amounts
due to/from brokers for settlement) of £12,733,000.
Twenty Largest UK Investments
at 31 March 2010
Market Market
Value % of Value % of
Company £000 Fund Company £000 Fund
Majedie Asset Management 30,000 18.3 BG Group 2,270 1.4
BP 8,104 5.0 Antofagasta 2,236 1.4
HSBC 7,348 4.5 Barclays 2,162 1.3
Royal Dutch Shell `B' 5,900 3.6 Unilever 2,129 1.3
Vodafone 4,940 3.0 British Land 1,684 1.0
BHP Billiton 4,746 2.9 BAE Systems 1,559 1.0
GlaxoSmithKline 4,619 2.8 National Grid 1,283 0.8
Rio Tinto 4,100 2.5 Sainsbury (J) 1,147 0.7
Vostok Energy 3,019 1.8 Charter 1,088 0.7
International
Aviva 2,562 1.6 Compass Group 1,052 0.6
Ten Largest Overseas Investments
at 31 March 2010
Market Market
Value % of Value % of
Company £000 Fund Company £000 Fund
Wells Fargo (USA) 1,383 0.8 Sanofi-Aventis 1,231 0.8
(France)
China Construction 1,207 0.7
Bank (China) 1,346 0.8 Lockheed Martin (USA)
Toyota (Japan) 1,318 0.8 JPMorgan Chase (USA) 1,180 0.7
Microsoft Corp (USA) 1,254 0.8 Telefonica (Spain) 1,173 0.7
ENI (Italy) 1,232 0.8 Bristol-Myrs Squib 1,144 0.7
(USA)
Interim Management Report
The important events that have occurred during the period under review, the
key factors influencing the financial statements and the principal
uncertainties for the remaining six months of the financial year are set out
in the Chairman's Statement above.
The principal risks facing the Company are substantially unchanged since the
date of the Annual Report for the year ended 30 September 2009 and continue to
be as set out in that report. Risks faced by the Company include, but are not
limited to, market risk, discount volatility, regulatory risk, financial risk,
risks associated with banking and hedging and non-compliance with Section 842
of the Income and Corporation Taxes 1988.
Responsibility Statement of the Directors in respect of the Half-Yearly
Financial Report
In accordance with the Disclosure and Transparency Rules 4.2.7R and 4.2.8R, we
confirm that to the best of our knowledge:
(a) The condensed set of financial statements has been prepared in accordance
with International Accounting Standard 34, Interim Financial Reporting, as
adopted by the European Union, as required by the Disclosure and Transparency
Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and
financial position of the Company;
(b) The Chairman's Statement includes a fair review of the information
required to be disclosed under the Disclosure and Transparency Rule 4.2.7R,
interim management report. This includes (i) an indication of important events
that have occurred during the first six months of the financial year, and
their impact on the condensed set of financial statements presented in the
Half-Yearly Financial Report and (ii) a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
(c) There were no changes in the transactions or arrangements with related
parties as described in the Group's annual report for the year ended 30
September 2009 that would have had a material effect on the financial position
or performance of the Group in the first six months of the current financial
year.
Andrew J Adcock
Chairman
For and on behalf of the Board
18 May 2010
Independent Review Report to Majedie Investments PLC
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
March 2010 which comprises the Condensed Consolidated Income Statement,
Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated
Balance Sheet, Condensed Consolidated Cash Flow Statement and related notes 1
to 13.
We have read the other information contained in the half-yearly financial
report and considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the Company in accordance with guidance
contained in ISRE 2410 (UK and Ireland) Review of Interim Financial
Information Performed by the Independent Auditor of the Entity issued by the
Auditing Practices Board. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company, for our
work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the Directors. The Directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 1, the annual financial statements of the Company are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, Interim Financial Reporting, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 March 2010 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Services Authority.
Ernst & Young LLP
London
18 May 2010
Condensed Consolidated Income Statement
for the half year ended 31 March 2010
Half year ended Half year ended Year ended
31 March 2010 31 March 2009 30 September 2009
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Note £000 £000 £000 £000 £000 £000 £000 £000 £000
Investments
Gains/(losses) on investments
at fair value through profit
or loss 6,218 6,218 (52,065) (52,065) (23,723) (23,723)
Net investment result 6,218 6,218 (52,065) (52,065) (23,723) (23,723)
Income
Dividends 1,716 1,716 2,044 2,044 4,499 4,499
Interest 27 27 86 86 95 95
MAM dividend income 468 468 261 261 547 547
MAM special dividend income 5,400 5,400 1,359 1,359 1,359 1,359
Other income 21 21 16 16 34 34
Total income 7,632 7,632 3,766 3,766 6,534 6,534
Expenses
Administration expenses (478) (1,434) (1,912) (956) (686) (1,642) (1,507) (1,359) (2,866)
Return/(deficit) before
finance costs and taxation 7,154 4,784 11,938 2,810 (52,751) (49,941) 5,027 (25,082) (20,055)
Finance costs (350) (1,051) (1,401) (350) (1,050) (1,400) (702) (2,100) (2,802)
Net return/(deficit) before
taxation 6,804 3,733 10,537 2,460 (53,801) (51,341) 4,325 (27,182) (22,857)
Taxation 2 (50) (50) (18) (18) (92) (92)
Net return/(deficit) after
taxation for the period 6,754 3,733 10,487 2,442 (53,801) (51,359) 4,233 (27,182) (22,949)
Return/(deficit) per ordinary
share: pence pence pence pence pence pence pence pence pence
Basic and diluted 3 13.0 7.2 20.2 4.7 (103.6) (98.9) 8.1 (52.3) (44.2)
The Group does not have any income or expenses that are not included in net
return for the period and therefore the `Net return after taxation for the
period' is also the `Total comprehensive income for the period'.
The total column of this statement is the Statement of Comprehensive Income of
the Group, prepared in accordance with International Financial Reporting
Standards (IFRS). The supplementary revenue return and capital return columns
are prepared under guidance published by the Association of Investment
Companies. All items in the above statement relate to continuing operations.
See notes below.
Condensed Consolidated Statement of Changes in Equity
for the half year ended 31 March 2010
Capital Share Own
Share Share redemption options Capital Revenue shares
capital premium reserve reserve reserve reserve reserve Total
Notes £000 £000 £000 £000 £000 £000 £000 £000
Half year ended 31 March 2010
30 September 2009 5,253 785 56 (284) 93,424 26,649 (1,702) 124,181
Net return after tax for the period 3,733 6,754 10,487
Share options expense 4 29 29
Dividends declared and paid in 6 (4,578) (4,578)
period
31 March 2010 5,253 785 56 (255) 97,157 28,825 (1,702) 130,119
Half year ended 31 March 2009
30 September 2008 5,253 785 56 291 120,606 29,047 (2,573) 153,465
Net return/(deficit) after tax for (53,801) 2,442 (51,359)
the period
Share options expense 4 229 229
Dividends declared and paid in 6 (4,446) (4,446)
period
Own shares (sold)/purchased by
Employee Incentive Trust (EIT) (826) 871 45
31 March 2009 5,253 785 56 (306) 66,805 27,043 (1,702) 97,934
Year ended 30 September 2009
30 September 2008 5,253 785 56 291 120,606 29,047 (2,573) 153,465
Net return/(deficit) after tax for (27,182) 4,233 (22,949)
the year
Share options expense 4 251 251
Dividends declared and paid in year 6 (6,631) (6,631)
Own shares (sold)/ purchased by
Employee Incentive Trust (EIT) (826) 871 45
30 September 2009 5,253 785 56 (284) 93,424 26,649 (1,702) 124,181
See notes below.
Condensed Consolidated Balance Sheet
at 31 March 2010
31 March 31 March 30 September
2010 2009 2009
Notes £000 £000 £000
Non-current assets
Property and equipment 287 6 224
Investments at fair value through profit 7, 8 151,052 123,270 147,291
or loss
151,339 123,276 147,515
Current assets
Trade and other receivables 1,508 606 1,897
Cash and cash equivalents 12,218 10,243 12,384
13,726 10,849 14,281
Total assets 165,065 134,125 161,796
Current liabilities
Trade and other payables (1,175) (2,438) (3,853)
Total assets less current liabilities 163,890 131,687 157,943
Non-current liabilities
Debentures (33,771) (33,753) (33,762)
Total liabilities (34,946) (36,191) (37,615)
Net assets 130,119 97,934 124,181
Represented by:
Ordinary share capital 5,253 5,253 5,253
Share premium 785 785 785
Capital redemption reserve 56 56 56
Share options reserve (255) (306) (284)
Capital reserve 97,157 66,805 93,424
Revenue reserve 28,825 27,043 26,649
Own shares reserve (1,702) (1,702) (1,702)
Equity Shareholders' Funds' 130,119 97,934 124,181
Net asset value per share pence pence pence
Basic and fully diluted 9 250.1 188.3 238.7
See notes below.
Condensed Consolidated Cash Flow Statement
for the half year ended 31 March 2010
Half year Half year Year
ended ended ended
31 March 31 March 30 September
2010 2009 2009
Notes £000 £000 £000
Net cash inflow from
operating activities 10 5,897 7,903 13,853
Investing activities
Purchases of
property and
equipment (93) (1) (234)
Net cash outflow
from investing
activities (93) (1) (234)
Financing activities
Interest paid (1,392) (1,392) (2,783)
Equity dividends (4,578) (4,446) (6,631)
paid
Exercise of options
on own shares 44 44
Net cash outflow
from financing
activities (5,970) (5,794) (9,370)
(Decrease)/increase
in cash and cash
equivalents for
period 11 (166) 2,108 4,249
Cash and cash
equivalents at start
of period 12,384 8,135 8,135
Cash and cash
equivalents at end
of period 12,218 10,243 12,384
See notes below.
Notes to the Condensed Consolidated Financial Statements
as at 31 March 2010
1. Accounting Policies
The Condensed Consolidated Financial Statements above comprise the unaudited
results of the Company and subsidiaries for the six months to 31 March 2010
and are presented in pounds sterling, as this is the functional currency of
the Group.
The Condensed Consolidated Financial Statements have been prepared in
accordance with International Financial Reporting Standard (`IFRS') for
interim financial statements; IAS 34 Interim Financial Reporting. They do not
include all financial information required for full annual financial
statements. The Condensed Consolidated Financial Statements have been prepared
using the accounting policies adopted in the audited financial statements for
the year ended 30 September 2009. Certain presentational changes have been
made which have no effect on the net assets of the Group.
2. Taxation
The charge for the half year to 31 March 2010 is £50,000 (half year to 31
March 2009: £18,000; year ended 30 September 2009: £92,000). These amounts
represent irrecoverable withholding tax paid on overseas investment income.
The Company has an effective tax rate of 0%. The estimated effective tax rate
is 0% as investment gains are exempt from tax owing to the Company's status as
an Investment Trust and there is expected to be an excess of management
expenses over taxable income and thus there is no charge for corporation tax.
3. Calculation of Returns per Ordinary Share
Basic returns per ordinary share in each period are based on the return on
ordinary activities after taxation attributable to equity shareholders. Basic
return per ordinary share for the period is based on 52,022,510 (half year
ended 31 March 2009: 51,924,756; year ended 30 September 2009: 51,973,767)
shares, being the weighted average number of shares in issue after adjustment
for the shares held by the Employee Incentive Trust.
There is no dilution to the basic return per ordinary share since share
options, if exercised, would be satisfied by shares already held by the
Employee Incentive Trust.
4. Share-based payments
The Group operates two share-based payment schemes: the Discretionary Share
Option Scheme 2000 and the 2006 Long Term Incentive Plan which in turn has two
sections relating to TSR-based Awards and Matching Awards. The LTIP replaced
the Discretionary Share Option Scheme 2000 for executive directors and senior
executives.
The number of outstanding options granted by the Company are summarised in the
table below:
31 March 31 March 30 September
2010 2009 2009
Number of outstanding options
Discretionary Share Option Scheme 2000 255,803 106,656
LTIP: TSR-based Awards 291,268 291,144 166,427
LTIP: Matching Awards 17,812 16,629 17,071
309,080 563,576 290,154
During the half year ended 31 March 2010 the last remaining options under the
Discretionary Share Options Scheme 2000 lapsed. The Scheme is now closed.
During the half year ended 31 March 2010 the number of options outstanding
under the LTIP TSR-based Awards showed a net increase of 124,841. This
comprised 112,721 options granted on 8 December 2009 and an additional 12,120
options as a result of the 2009 6.3p final dividend and 2010 2.5p special
dividend which is in accordance with the LTIP rules. Additionally the number
of options outstanding under LTIP Matching Awards showed a net increase of
741. Again this reflects the increase in options in respect of the 2009 6.3p
final dividend and 2010 2.5p special dividend in accordance with the LTIP
rules.
During the half year to 31 March 2010 the Group recognised a total expense for
share-based payment transactions of £29,000 (half year ended 31 March 2009:
£229,000; year ended 30 September 2009: £251,000).
The total shareholding of Majedie Investments PLC Incentive Trust is 505,490
(31 March 2009: 505,490; 30 September 2009: 505,490) ordinary shares. The
shares will be held by the trust until the relevant options are exercised or
until they lapse. The cost of the shares is presented in the Condensed
Consolidated Balance Sheet under the heading `Own shares reserve', as a
deduction from shareholders' funds in accordance with IFRS 2: Share-based
Payments.
5. Segment reporting
Under IFRS 8 neither the nature or the extent of the activities of the Group
is appropriate for separate disclosure.
6. Dividends
In accordance with International Accounting Standard 10: Events After the
Balance Sheet Date, dividends are not accounted for until paid. The following
table summarises the amounts recognised as distributions to equity holders in
the relevant period:
Half year ended Half year ended Year ended
31 March 31 March 30 September
2010 2009 2009
£000 £000 £000
2010 Special dividend of 2.50p
paid on 8 March 2010 1,301
2009 Final dividend of 6.30p paid
on 27 January 2010 3,277
2009 Interim dividend of 4.20p
paid on 30 June 2009 2,185
2008 Final dividend of 6.30p paid
on 28 January 2009 3,276 3,276
2008 Special dividend of 2.25p
paid on 28 January 2009 1,170 1,170
4,578 4,446 6,631
The directors propose an interim dividend for 2010 of 4.2p per share, to be
paid on 30 June 2010.
7. Investments
All investments are designated upon initial recognition as held at fair value
through profit or loss, and are measured at subsequent reporting dates at fair
value, which is either the bid price or the last traded price, depending on
the convention of the exchange on which the investment is quoted. Investments
in unit trusts or open ended investment companies are valued at the closing
price, the bid price or the single price as appropriate, released by the
relevant investment manager.
Unlisted investments are formally valued on a semi-annual basis by the Board
of Directors taking into account relevant information as appropriate including
market prices, latest dealings, accounting information, professional advice
and the guidelines issued by the International Private Equity and Venture
Capital Association. In between the formal valuations the Directors review
these investments for any significant changes and incorporate such changes as
they consider necessary.
Unlisted investments disclosed in the Portfolio Information above total
£35,498,000 of which £5,498,000 is invested in 23 companies and £30,000,000 is
the carrying value of our investment in MAM as detailed in note 8 below.
8. Majedie Asset Management Limited (MAM)
Majedie Investments PLC owns a 30% equity shareholding in MAM, which provides
investment management and advisory services relating to UK equities.
The carrying value of our investment in MAM is included in the Condensed
Consolidated Balance Sheet as part of investments at fair value through profit
or loss:
31 March 31 March 30 September
2010 2009 2009
£000 £000 £000
Deemed cost of investment 1,207 1,207 1,207
Holding gains 28,793 21,293 28,793
Fair value at period end 30,000 22,500 30,000
The carrying value of MAM in the 31 March 2010 Condensed Consolidated
Financial Statements is its fair value as assessed at 31 March 2010. The Board
regularly monitors the investment in MAM to ensure that the carrying value
remains appropriate.
9. Net Asset Value
The net asset value per share has been calculated based on total equity and on
52,022,510 (31 March 2009: 52,022,510; 30 September 2009: 52,022,510) ordinary
shares, being the shares in issue at the period end having deducted the number
of shares held by the Employee Incentive Trust.
10. Reconciliation of Operating Profit to Operating Cash Flow
Half year ended Half year Year ended
ended
31 March 31 March 30 September
2010 2009 2009
£000 £000 £000
Consolidated net
return/(deficit) before
taxation 10,537 (51,341) (22,857)
Adjustments for:
Movements on investments (6,218) 52,065 23,723
Dividends reinvested (32) (39) (132)
Depreciation 30 43 58
Share based remuneration 29 229 251
Purchase of investments (24,372) (31,987) (57,427)
Sales of investments 24,805 37,267 67,202
4,779 6,237 10,818
Finance costs 1,401 1,400 2,802
Operating cash flows before
movements in working capital 6,180 7,637 13,620
(Decrease)/increase in trade
and other payables (60) (10) 241
(Increase)/decrease in trade
and other receivables (166) 294 96
Net cash inflow from
operating activities before
tax 5,954 7,921 13,957
Tax recovered 4 2
Tax on unfranked income (61) (18) (106)
Net cash inflow from
operating activities 5,897 7,903 13,853
11. Reconciliation of Net Cash Flow to Movement in Net Debt
Half year ended Half year Year ended
ended
31 March 31 March 30 September
2010 2009 2009
£000 £000 £000
(Decrease)/increase in cash (166) 2,108 4,249
Non cash items (9) (9) (18)
Change in net debt (175) 2,099 4,231
Net debt beginning of period (21,378) (25,609) (25,609)
Net debt at end of period (21,553) (23,510) (21,378)
12. Related Party Transactions
Majedie Asset Management Limited is considered to be a related party under
IFRS.
Significant related party transactions with Majedie Asset Management Limited
are disclosed in the table below.
Half year ended Half year ended Year ended
31 March 31 March 30 September
2010 2009 2009
£000 £000 £000
Ordinary dividends
receivable in the period 468 261 547
Special dividends
receivable in the period 5,400 1,359 1,359
There were no amounts owed to the group at the end of the relevant periods.
13. Financial Information
The financial information contained in this Half-Yearly Financial Report does
not constitute full statutory accounts as defined in Section 434 of the
Companies Act 2006. The financial information for the six months ended 31
March 2010 and 31 March 2009 have not been audited, but have been reviewed by
the Company's auditors and their report is shown above.
The information for the year ended 30 September 2009 has been extracted from
the latest published audited accounts. Those accounts have been filed with the
Registrar of Companies and included the report of the auditors which was
unqualified and did not contain a statement under Section 498(2) or (3) of the
Companies Act 2006. Those statutory accounts were prepared in accordance with
International Financial Reporting Standards, as adopted by the European Union.
Company Information
Board of Directors Registrars
A J Adcock*, Chairman Computershare Investor Services
PLC
H V Reid*, Deputy Chairman The Pavilions
J W M Barlow* Bridgwater Road
G P Aherne Bristol BS99 6ZZ
C J Arnheim* Telephone: 0870 707 1159
P D Gadd*
* Non-executive Directors Auditors
Ernst & Young LLP
Registered Office 1 More London Place
Tower 42 London SE1 2AF
25 Old Broad Street
London EC2N 1HQ Stockbrokers
Cenkos Securities plc
Telephone: 020 7626 1243 6.7.8 Tokenhouse Yard
Email: majedie@majedie.co.uk London EC2R 7AS
Registered number: 109305 England
Website
Company Secretary www.majedie.co.uk
Capita Sinclair Henderson Limited
(trading as Capita Financial Group
- Specialist Fund Services)
Beaufort House
51 New North Road
Exeter
EX4 4EP
Telephone: 01392 412122
Facsimile: 01392 253282
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