Half-yearly Report
Majedie Investments PLC
Half-Yearly Financial Report
31 March 2009
Majedie Investments PLC is a self-managed investment trust with total portfolio
assets under management of over £130 million.
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 2009
net assets per share decreased by 36.5% to 188.3p
Share price decreased by 44.6% to 138.5p
Discount to net assets widened from 15.7% to 26.4%
Earnings per share decreased by 42.7% to 4.7p
Interim dividend unchanged at 4.2p
Performance
Net asset value total return of -34.2%
Total shareholder return of -41.8%
Benchmark total return of -16.8%
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 2009 have borne witness to the most extraordinary
economic conditions and events for many decades resulting in more negative
returns on world stock markets. The impact of this on the Company's Net Asset
Value (NAV) and Share Price has been exacerbated by our small cap exposure and
our overweighting in sterling assets. I therefore regret to report that the NAV
decreased by 34.2% and Share Price by 41.8% both compared to the benchmark
total return of -16.8%.
The Board is continuing to take action to ensure that the portfolio is
appropriately positioned for these current economic times and to provide future
growth.
Results
The Group's net profit before tax for the six months was £2.4m compared with £
4.2m for the prior year period. Group income for the six months reduced by £
1.5m, due to the cessation of Majedie Asset Management Limited (MAM) special
dividends, which provided £2.6m in the same period last year, and a decrease in
dividends from our investment portfolio. This decrease was partially offset by
the commencement of ordinary dividends from MAM amounting to £1.6m. Total group
costs of £1.6m included the costs associated with both the departure of the
previous Investment Director and our move to new offices, and were otherwise
lower than the £1.5m incurred last year. The significant net decrease in MAM
dividends contributed to the decrease in earnings per share of 42.7% to 4.7p
from 8.2p for the same period last year.
This year the interim dividend is being maintained at 4.2 pence per share,
consistent with last year. The interim dividend will be paid on 30 June 2009 to
shareholders on the register on 5 June 2009. The Board has decided to maintain
the interim dividend at this level notwithstanding both the reduced level of
income this year and as I mentioned last year, the review of the Company's
dividend objective in 2009. We will report to shareholders on this subject
later in the year when we have finished our review.
The MAM business continued to perform strongly with profitability being very
satisfactory. However given the current investment market the Board has
determined that the value of our 30% investment should remain at its existing
level of £22.5m as at 31 March 2009.
Portfolio
The management of the portfolio was changed on 1 January following the review
of investment strategy and performance. In the turmoil which continued to swirl
around markets until mid-March, the contribution of certain early stage small
cap investments remained significantly adverse. The impact of this factor was
partially offset by the decision to increase cash to over 15% of assets and,
accordingly, the poor relative performance of the portfolio began to diminish
during the first quarter of calendar 2009.
Our priority has been to upgrade the quality of securities held with a
particular focus on safeguarding superior levels of income as well as building
the foundations of a portfolio of mainstream overseas assets invested in the
major markets of the US, Europe and Japan . This strategy was assisted by the
high levels of cash built up in the New Year which were deployed in March as
markets began to show some recovery. Against that background, cash fell to 6.7%
of assets and since the period end has fallen still further. Investment in
overseas equities, which rose to 17% by 31 March, is now at the 20% mark and is
anticipated to increase further in the next few months.
The legacy of the very high small cap exposure continues to pose a conundrum.
There are some exciting, high quality investments such as KSK Power Ventures,
Pure Circle and Zenergy which have excellent prospects for growth and the
management to deliver it. Nonetheless, despite the bounce seen in certain small
cap indices, the environment for the worst of the small cap sector is not
likely to be very favourable over the coming few years. Accordingly, we will
seek to balance the desire to realise good value for some of these investments
with an appreciation that better performance and reliable, growing, levels of
income are more likely to be obtained from the mainstream areas of markets.
In carrying out our strategy, we do so with a reasonably cautious outlook based
on the well known problems facing economies as the recession deepens and
develops but with an increasingly confident view that the worse effects of this
recession have been reflected in valuations and markets will be more focussed
on improvement and recovery.
Business Development
We continue to make progress on developing another fund management business
following on from our success with MAM. Whilst the current market conditions
may seem to be an inhibitor they also generate opportunities for us to pursue.
As such we remain confident that the proposals for new business development
outlined at our last AGM will continue to provide the framework for other
successful businesses over time.
Office Premises
After fifteen years at 1 Minster Court and after an extensive period of
analysis and investigation we have moved offices to Tower 42 in Old Broad
Street. Whilst still in the City of London the new premises should provide more
suitable office space for our current and potential needs and will provide
savings in our future premises costs.
Outlook
Markets have displayed a sharp and swift recovery following the lows suffered
in early March and many commentators have seen this as the major turning point
from bear to bull. This optimism seems premature to us and we retain a
reasonably cautious outlook as the recession deepens and develops. However we
do believe that markets will now tend to look forward to a recovery and it is
encouraging to note the adept way in which much of the corporate sector is
dealing with the recession, as has been shown in the last reporting season in
the UK and elsewhere.
Henry S Barlow
Chairman
20 May 2009
Portfolio Information
at 31 March 2009
Fund Analysis
Market Value % of
£000 Fund
Oil & Gas 20,646 15.6
Basic Materials 6,800 5.1
Industrials 12,490 9.5
Consumer Goods 6,061 4.6
Health Care 6,047 4.6
Consumer Services 6,211 4.7
Telecommunications 11,655 8.8
Utilities 5,752 4.4
Financials 14,673 11.1
Technology 1,910 1.4
Unlisted (note 7) 31,025 23.5
Total Investments at Fair Value 123,270 93.3
Cash 8,786 6.7
132,056 100.0
United Kingdom 109,172 82.7
Australia 635 0.5
United States 7,287 5.5
Continental Europe 1,940 1.4
Japan 3,127 2.4
Asia 1,109 0.8
Total Investments at Fair Value 123,270 93.3
Cash 8,786 6.7
132,056 100.0
The portfolio information comprises the investments at fair value of £
123,270,000 (including MAM at £22,500,000) and cash (as adjusted for amounts
due to/from brokers for settlement) of £8,786,000.
Twenty Largest UK Investments
at 31 March 2009
Market % of Market % of
Value Value
Company £000 Fund Company £000 Fund
Majedie Asset 22,500 17.0 Rio Tinto 2,023 1.5
Management
BP 8,437 6.4 Capital Lease 1,969 1.5
Avia
Vodafone 7,287 5.5 Accys 1,893 1.4
Technologies
Royal Dutch Shell 4,074 3.1 Aviva 1,780 1.3
HSBC Holdings 3,476 2.6 Pure Circle 1,642 1.2
GlaxoSmithKline 3,263 2.5 Rolls Royce 1,564 1.2
Vostok Energy 3,195 2.4 BT Group 1,564 1.2
BHP Billiton 3,061 2.3 BG Group 1,542 1.2
Phorm 2,212 1.7 Unilever 1,516 1.1
London Capital 2,120 1.6 BAE Systems 1,505 1.1
Ten Largest Overseas Investments
at 31 March 2009
Market % of Market % of
Value Value
Company £000 Fund Company £000 Fund
Exxon Mobil (USA) 947 0.7 Takeda 877 0.7
Pharmaceutical
(Japan)
Coca-Cola Co (USA) 920 0.7 Bristol-Myrs Squib 762 0.6
(USA)
Johnson & Johnson 917 0.7 Heinz HJ (USA) 691 0.5
(USA)
Nintendo Co (Japan) 885 0.7 China Construction 593 0.4
Bank (Asia)
AT & T Inc (USA) 877 0.7 Monsanto (USA) 579 0.4
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;
(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 2008 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.
Henry S Barlow Chairman
For and on behalf of the Board
20 May 2009
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 2009 which comprise the Condensed Consolidated Income Statement,
Condensed Consolidated Statement of Changes in Equity, Condensed Consolidated
Balance Sheet, Condensed Consolidated Cash Flow Statement and the 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 Group 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 2009 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
20 May 2009
Condensed Consolidated Income Statement
for the half year ended 31 March 2009
Half year ended Half year ended Half year ended
31 March 2009 31 March 2008 30 September 2008
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
Losses on (52,065) (52,065) (33,711) (33,711) (95,341) (95,341)
investments at
fair value
through
profit or loss
Net investment (52,065) (52,065) (33,711) (33,711) (95,341) (95,341)
result
Income
Dividends and 2,130 2,130 2,623 2,623 6,306 6,306
interest
MAM dividend 1,620 1,620
income
Special 2,599 2,599 2,484 2,484
dividend
income
Other income 16 16 43 43 75 75
Total income 3,766 3,766 5,265 5,265 8,865 8,865
Expenses
Administration (956) (686) (1,642) (673) (833) (1,506) (1,702) (1,571) (3,273)
expenses
Return/ 2,810 (52,751) (49,941) 4,592 (34,544) (29,952) 7,163 (96,912) (89,749)
(deficit)
before finance
costs and
taxation
Finance costs (350) (1,050) (1,400) (350) (1,049) (1,399) (701) (2,099) (2,800)
Net return/ 2,460 (53,801) (51,341) 4,242 (35,593) (31,351) 6,462 (99,011) (92,549)
(deficit)
before
taxation
Taxation 2 (18) (18) (8) (8) (51) (51)
Net return/ 2,442 (53,801) (51,359) 4,234 (35,593) (31,359) 6,411 (99,011) (92,600)
(deficit)
after taxation
for the period
Return/ pence pence pence pence pence pence pence pence pence
(deficit)
per ordinary
share:
Basic and 3 4.7 (103.6) (98.9) 8.2 (69.2) (61.0) 12.5 (192.3) (179.8)
diluted
The total column of this statement is the Consolidated Income Statement of the
Group, prepared in accordance with 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.
These accounts have been prepared in compliance with the recognition and
measurement criteria of IFRS. See notes below.
Condensed Consolidated Statement of Changes in Equity
for the half year ended 31 March 2009
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 2009
30 September 5,253 785 56 291 120,606 29,047 (2,573) 153,465
2008
Net return/ (53,801) 2,442 (51,359)
(deficit) after
tax for the
period
Share options 4 229 229
expense
Dividends 6 (4,446) (4,446)
declared and
paid in period
Own shares
(sold)/
purchased by
Employee (826) 871 45
Incentive Trust
(EIT)
31 March 2009 5,253 785 56 (306) 66,805 27,043 (1,702) 97,934
Half year ended
31 March 2008
30 September 5,253 785 56 262 219,617 30,296 (3,053) 253,216
2007
Net return/ (35,593) 4,234 (31,359)
(deficit) after
tax for the
period
Share options 4 112 112
expense
Dividends 6 (5,506) (5,506)
declared and
paid
in period
Own shares
purchased by
Employee (914) (914)
Incentive Trust
(EIT)
31 March 2008 5,253 785 56 374 184,024 29,024 (3,967) 215,549
Year ended 30
September 2008
30 September 5,253 785 56 262 219,617 30,296 (3,053) 253,216
2007
Net return/ (99,011) 6,411 (92,600)
(deficit) after
tax for the year
Share options 4 516 516
expense
Dividends 6 (7,660) (7,660)
declared and
paid
in year
Own shares
(sold)/
purchased by
Employee (487) 480 (7)
Incentive Trust
(EIT)
30 September 5,253 785 56 291 120,606 29,047 (2,573) 153,465
2008
These accounts have been prepared in compliance with the recognition and
measurement criteria of IFRS. See notes below.
Condensed Consolidated Balance Sheet
at 31 March 2009
Notes 31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
Non-current assets
Property and equipment 6 60 48
Investments at fair value through 7, 8 123,270 243,213 178,981
profit or loss
123,276 243,273 179,029
Current assets
Trade and other receivables 606 4,244 2,340
Cash and cash equivalents 10,243 3,495 8,135
10,849 7,739 10,475
Total assets 134,125 251,012 189,504
Current liabilities
Trade and other payables (2,438) (1,727) (2,295)
Total assets less current 131,687 249,285 187,209
liabilities
Non-current liabilities
Debenture stock (33,753) (33,736) (33,744)
Total liabilities (36,191) (35,463) (36,039)
Net assets 97,934 215,549 153,465
Notes 31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
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 (306) 374 291
Capital reserve 66,805 184,024 120,606
Revenue reserve 27,043 29,024 29,047
Own shares reserve (1,702) (3,967) (2,573)
Equity Shareholders' Funds' 97,934 215,549 153,465
Net asset value per share pence pence pence
Basic and fully diluted 9 188.3 419.8 296.5
These accounts have been prepared in compliance with the recognition and
measurement criteria of IFRS. See notes below.
Condensed Consolidated Cash Flow Statement
for the half year ended 31 March 2009
Notes Half year Half year Half year
ended ended ended
31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
Net cash inflow from operating 10 7,903 4,546 11,826
activities
Investing activities
Purchases of tangible assets (1) (3) (4)
Net cash outflow from investing (1) (3) (4)
activities
Financing activities
Interest paid (1,392) (1,392) (2,784)
Equity dividends paid (4,446) (5,506) (7,660)
Purchases of own shares (914) (914)
Exercise of options on own shares 44 907
Net cash outflow from financing (5,794) (7,812) (10,451)
activities
Increase/ (decrease) in cash and 11 2,108 (3,269) 1,371
cash equivalents for period
Cash and cash equivalents at start 8,135 6,764 6,764
of period
Cash and cash equivalents at end of 10,243 3,495 8,135
period
These accounts have been prepared in compliance with the recognition and
measurement criteria of IFRS. See notes below.
Notes to the Condensed Consolidated
Financial Statements
as at 31 March 2009
1. Accounting Policies
The Condensed Consolidated Financial Statements comprise the unaudited results
of the Company and subsidiaries for the six months to 31 March 2009 and are
presented in pounds sterling, as this is the principal currency in which the
Group's transactions are undertaken.
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 2008, except that the Directors have chosen to early adopt
the AIC Statement of Recommended Practice issued in January 2009 regarding the
Financial Statements of Investment Trust Companies and Venture Capital Trusts.
The changes are mainly presentational and have no effect on the net assets of
the Group.
2. Taxation
The charge for the half year to 31 March 2009 is £18,000 (half year to 31 March
2008: £8,000; year ended 30 September 2008: £51,000). 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 51,924,756 (half year
ended 31 March 2008: 51,461,928; year ended 30 September 2008: 51,478,751)
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 replaces
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
2009 2008 2008
Number of outstanding options
Discretionary Share Option Scheme 2000 255,803 655,265 255,803
LTIP: TSR-based Awards 291,144 364,906 369,394
LTIP: Matching Awards 16,629 156,336 213,085
563,576 1,176,507 838,282
During the half year ended 31 March 2009 the number of options outstanding
under the LTIP TSR-based Awards showed a net decrease of 78,250. This comprised
106,207 options granted on 4 December 2008 and an additional 7,941 options as a
result of the 2008 6.3p final dividend and 2.25p special dividend which is in
accordance with the LTIP rules. These were offset by an exercise of 30,925
options on 5 and 12 December 2008 and 161,473 options lapsed on 31 December
2008.
Furthermore during the half year to 31 March 2009 the number of options
outstanding under matching awards showed a net decrease of 196,456. This
reflects an exercise of 197,272 options on 5 and 12 December 2008 being offset
by an additional 816 options in respect of the 2008 6.3p final dividend and
2.25p special dividend.
During the half year to 31 March 2009 the Group recognised a total expense for
share-based payment transactions of £229,000 (half year ended 31 March 2008: £
112,000; year ended 30 September 2008: £516,000).
The total shareholding of Majedie Investments PLC Incentive Trust is 505,490
(31 March 2008: 1,178,030; 30 September 2008: 763,852) 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
Payment.
5. Segment reporting
Under IAS14 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 period:
Half year Half year Half year
ended ended ended
31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
2008 Final dividend of 6.30p 3,276
paid on 28 January 2009
2008 Special dividend of 2.25p 1,170
paid on 28 January 2009
2008 Interim dividend of 4.20p 2,156
paid on 30 June 2008
2007 Special dividend of 4.50p 2,316 2,315
paid on 23 January 2008
2007 Final dividend of 6.20p 3,190 3,189
paid on 23 January 2008
4,446 5,506 7,660
The directors propose an interim dividend for 2009 of 4.2p per share, to be
paid on 30 June 2009.
7. Investments
All investments are accounted at fair value through profit or loss as defined
by IAS 39.
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 normally valued on an 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.
Unlisted investments disclosed in the Portfolio Information total £31,025,000
of which £8,525,000 is invested in 18 various companies and £22,500,000 for 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 consolidated
balance sheet as part of investments at fair value through profit and loss:
31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
Deemed cost of investment 1,207 1,207 1,207
Unrealised gains 21,293 21,293 21,293
Fair value at period end 22,500 22,500 22,500
The carrying value of MAM in the 31 March 2009 Condensed Consolidated Financial
Statements is its fair value as assessed at 31 March 2009. 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 2008: 51,349,970; 30 September 2008: 51,764,148) 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 Half year Year
ended ended ended
31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
Consolidated net deficit before (51,341) (31,351) (92,549)
taxation
Adjustments for:
Movements on investments 52,065 33,711 95,341
Dividends reinvested (39) (69) (171)
Depreciation 43 12 25
Share based remuneration 229 112 516
Purchase of investments (31,987) (22,097) (51,830)
Sales of investments 37,267 24,071 56,133
6,237 4,389 7,465
Finance costs 1,400 1,399 2,800
Operating cash flows before movements 7,637 5,788 10,265
in
working capital
Decrease in trade and other payables (10) (124) (454)
Decrease/ (increase) in trade and 294 (1,110) 2,071
other receivables
Net cash inflow from operating 7,921 4,554 11,882
activities before tax
Tax on unfranked income (18) (8) (56)
Net cash inflow from operating 7,903 4,546 11,826
activities
11. Reconciliation of Net Cash Flow to Movement in Net Debt
Half year Half year Year
ended ended ended
31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
Increase/ (decrease) in cash 2,108 (3,269) 1,371
Non cash items (9) (8) (16)
Change in net debt 2,099 (3,277) 1,355
Net debt beginning of period (25,609) (26,964) (26,964)
Net debt at end of period (23,510) (30,241) (25,609)
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 Half year Year
ended ended ended
31 March 31 March 30 September
2009 2008 2008
£000 £000 £000
Ordinary dividends receivable in the 1,620
period
Special dividends receivable in the 2,599 2,484
period
Amounts owed to the group at the end 2,599
of the period
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
2009 and 31 March 2008 has not been audited.
The information for the year ended 30 September 2008 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 either Section 237(2) or (3)
of the Companies Act 1985. Those statutory accounts were prepared in accordance
with International Financial Reporting Standards, as adopted by the European
Union.
Company Information
Board of Directors:
H S Barlow OBE, Chairman
H V Reid, Deputy Chairman
J W M Barlow
G P Aherne
A J Adcock
All directors are non executive
Registered Office:
Tower 42
25 Old Broad Street
London EC2N 1HQ
Telephone 020 7626 1243
E-mail majedie@majedie.co.uk
Registered number 109305 England
Secretary:
Capita Sinclair Henderson Limited
Beaufort House
51 New North Road
Exeter EX4 4EP
Telephone 01392 412122
Facsimile 01392 253282
Registrar:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone 0870 707 1159
Auditors:
Ernst & Young LLP
1 More London Place
London SE1 2AF
Financial Adviser and Broker:
Cenkos Securities plc
6.7.8 Tokenhouse Yard
London EC2R 7AS
Website:
www.majedie.co.uk
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