Half-yearly Report

Manchester & London Investment Trust plc ("MLIT" or the "Company") ANNOUNCEMENT OF THE UNAUDITED INTERIM GROUP RESULTS For the six months ended 31st January 2010 The Directors announce the unaudited interim group results for the six months ended 31st January 2010. The key highlights for the period were: - Net Asset Value per share has increased by 6.6 per cent to 350.0p, which compares with a gain of 13.0 per cent in our benchmark over the period; - Rising markets resulted in a gain on the capital account of 22.0p per share and revenue earnings per share of 5.6p; and - The Directors have declared an interim dividend of 5.0p per share to be paid on 30th April 2010 to all shareholders on the Register at the close of business on 6th April 2010. Chairman's Statement Dear Shareholder, Half Year Results and Dividend The market continued to rally strongly to the year end with a fall back taking place in January. Against this background, we are disappointed to report that our assets and earnings have increased but not improved in line with our benchmark, the FTSE All-Share Index. This has been the result of holding a portfolio which has had limited exposure to smaller capitalisation shares, banks and cyclicals which have seen extraordinary returns. Half Year Review Whilst the economic management of the UK over the period 31st July 2009 to 31st January 2010 continues to less than perfect, the stock market has continued its rally from the low point of 1,782 (3rd March 2009) to the current level of 2,600, a recovery of 46 per cent. This surprising performance reflects similar performances of the US Federal Reserve and several other European governments, which have created a background of interest rates at the lowest level since the depression of the 1930's. These conditions have encouraged an appetite for international stocks which appear to be capable of maintaining profitability against an appalling background, thereby pushing the indices to seemingly high levels. Time will tell whether these can be maintained together with a gradual withdrawal of "quantitative easing". The excessive government spending of the last decade has precipitated the current financial crisis which is now developing. Initially, the problem is deflationary but ultimately it is likely to be inflationary, which does the real damage. In the meantime, the exceptionally low rate of interest has enabled us to participate in a surprisingly strong rally and a recovery of our net asset value to 350p per share. We are pleased to report that, despite the current uncertainty, we have declared an interim dividend of 5p per share. An interesting and possibly mitigating feature for the UK Government is that it is not the only offender, with the US and most European Governments in particular, also culpable. It seems possible that we are heading for an era of defaulting, painfully slow recoveries and a potential collapse of some European areas. Indeed it is fair to point the finger of excessive borrowing at most countries in the Western world at a time when power and influence is gradually drifting towards the BRIC economies (Brazil, Russia, India and China). Our investment policy to combat these adverse circumstances is to concentrate our funds (in nearly all cases) on substantial global companies coupled with attractive yields where possible; a difficult objective to achieve. Nevertheless, our performance during the half year to 31st January 2010 has been reasonable with a substantial and well timed re-entry into the market. Outlook Whilst we intend to continue with our policy of investment into sound global companies, it would be naive to ignore the turbulence which lies ahead. The prospects of the UK losing its treble A rating hardly bears a mention, but we have to recognise that there is a distinct possibility of this occurring. Another cause of disappointment is the termination of "quantitative easing" which does not appear to have achieved the intended boost in private sector lending thereby reviving commercial activity. Perhaps we should be thankful that it does not appear to have had any adverse effects; current rumours of a repeat performance may have a better result. Market concentration now centres on the Greek crisis, its seemingly uncontrollable borrowing problem, and other countries which are in the same boat (not to mention the issues of the UK) in what is likely to be a developing saga affecting all the "club med" members of the European currency. The pound sterling, although weak, is mercifully not a participant thanks to the original decision not to join such a restricted currency. We continue to believe that inflation will gradually emerge as the number one enemy, and our investment policy will continue to reflect this danger. P H A Stanley Chairman March 2010 The Portfolio We are currently varying between being fully invested to a position of approximately 10 per cent net cash depending upon market circumstances. Our largest holding is still PZ Cussons plc which has recovered well during the period and now represents 19 per cent of our assets. Our Investment Manager has visited the company in Manchester, Lagos and Jakarta during the period and prospects appear to be very encouraging. Other substantial holdings are BP plc, Syngenta AG (fertilisers and agricultural chemicals), Rio Tinto plc, SSL International Plc (personal goods) and BG Group plc (oil and gas). Outlook We have become fully invested on the basis that we are likely (but not certainly) to find that the next problem will be inflation and therefore we remain focused on a portfolio of predominantly liquid, large and mid capitalisation stocks that we believe will benefit from the growth of emerging economies and the prospect of future inflationary but controllable conditions. For enquiries: Manchester & London Investment Trust plc Peter Thomas Company Secretary Tel: 0161 242 8246 Midas Investment Management Limited Mark Sheppard Tel: 020 7225 1836 Notes: Trust Performance At 31 January At 31 July Percentage 2010 2009 Increase / Decrease Net assets attributable 61,273 57,495 6.6 to Equity Shareholders (£'000) Net asset value per 350.0 328.4 6.6 Ordinary Share (p) FTSE Actuaries All-Share 2,660.5 2,353.5 13.0 Index Interim Dividend 5.0 4.5 11.1 declared per ordinary share (p) Ex-dividend date 31st March 2010 Record date 6th April 2010 Payment date 30th April 2010 The price and net asset value is published daily in the Investment Companies Sector of the Financial Times. Ten Largest Investments As at 31st January 2010 Valuation £'000 % of Sector Portfolio PZ Cussons plc 11,145 18.2 Personal Goods Rio Tinto plc 5,788 9.4 Mining BP plc 4,223 6.9 Oil & Gas Producers Syngenta AG 3,842 6.3 Pharmaceutical & Biotechnology BG Group plc 3,768 6.2 Oil & Gas Producers SSL International plc 3,466 5.7 Personal Goods Aberdeen Asset 2,904 4.7 General Financial Management plc Tesco plc 2,895 4.7 Food & Drug Retailers Yahoo! Inc 2,643 4.3 Software & Computer Services Xstrata plc 2,220 3.6 Mining Consolidated Income Statement For the 6 months ended 31 January 2010 (Unaudited) (Unaudited) (Audited) 6 months 6 months Year ended ended ended 31 January 31 January 31 July 2010 2009 2009 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains/Losses - 4,075 4,075 - (3,739) (3,739) - (376) (376) on investments at fair value Trading Income 442 - 442 169 - 169 281 - 281 Investment 700 - 700 775 - 775 1,556 - 1,556 Income Gross Return 1,142 4,075 5,217 944 (3,739) (2,795) 1,837 (376) 1,461 Expenses Management Fee (46) (86) (132) (35) (68) (103) (79) (147) (226) Transaction - (141) (141) - (216) (216) - (362) (362) Costs Other expenses (116) - (116) (72) - (72) (207) - (207) Total Expenses (162) (227) (389) (107) (284) (391) (286) (509) (795) Finance costs - - - (3) - (3) (5) - (5) Profit before 980 3,848 4,828 834 (4,023) (3,189) 1,546 (885) 661 tax Taxation - - - - - - (16) - (16) Profit 980 3,848 4,828 834 (4,023) (3,189) 1,530 (885) 645 attributable to equity shareholders Earnings per 5.60 21.98 27.58 5.98 (28.85) (22.87) 10.51 (6.08) 4.43 share (p) Consolidated Statement of Changes in Equity For the 6 months ended 31st January 2010 Unaudited Six months ended 31st January 2010 Share Share Other Capital Capital Retained Total Capital Premium Reserves Reserve Reserve Earnings Unrealised Realised £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 4,376 19,887 (79) 7,638 22,196 3,477 57,495 2009 Profit for the period - - - - - 4,828 4,828 Transfer of capital - - - 1,746 2,102 (3,848) - profits Ordinary dividend paid - - - - - (1,050) (1,050) 4,376 19,887 (79) 9,384 24,298 3,407 61,273 Unaudited Six months ended 31st January 2009 Share Share Other Capital Capital Retained Total Capital Premium Reserves Reserve Reserve Earnings Unrealised Realised £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 3,487 9,921 (79) 6,684 24,035 3,621 47,669 2008 Profit for the period - - - - - (3,189) (3,189) Transfer of capital - - - (2,189) (1,834) 4,023 - profits Ordinary dividend paid - - - - - (1,046) (1,046) 3,487 9,921 (79) 4,495 22,201 3,409 43,434 Audited Year ended 31st July 2009 Share Share Other Capital Capital Retained Total Capital Premium Reserves Reserve Reserve Earnings Unrealised Realised £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 3,487 9,921 (79) 6,684 24,035 3,621 47,669 2009 Profit for the period - - - - - 645 645 Transfer of capital - - - 954 (1,839) 885 - profits Ordinary dividend paid - - - - - (1,674) (1,674) Issue of share Capital 889 9,966 - - - - 10,855 4,376 19,887 (79) 7,638 22,196 3,477 57,495 Consolidated Balance Sheet As at 31st January 2010 (Unaudited) (Unaudited) (Audited) 31st January 31st January 31st July 2010 2009 2009 £'000 £'000 £'000 Non-current Assets Investments held at fair value 57,476 34,992 51,924 through profit and loss Current Assets Trade and other receivables 257 1,681 411 Derivative financial instruments 7,137 - 4,571 Cash and cash equivalents 3,413 6,973 4,747 10,807 8,654 9,729 Gross Assets 68,283 43,646 61,653 Current Liabilities Trade and other payables (187) (212) (290) Derivative financial instruments (6,823) - (3,868) (7,010) (212) (4,158) Net Assets 61,273 43,434 57,495 Capital and Reserves Called-up share capital 4,376 3,487 4,376 Share premium 19,887 9,921 19,887 Capital reserve - realised 24,298 22,201 22,196 Capital reserve - unrealised 9,384 4,495 7,638 Other reserves (79) (79) (79) Retained earnings 3,407 3,409 3,477 Total equity shareholders' funds 61,273 43,434 57,495 Net asset value per share (p) 350.0 311.4 328.4 Consolidated Cashflow Statement For the period ended 31st January 2010 (Unaudited) (Unaudited) (Audited) 31st January 31st January 31st July 2010 2009 2009 £'000 £'000 £'000 Operating activities Profit/(loss) after tax 4,828 (3,189) 645 (Gains)/losses on investments (4,075) 4,318 376 Finance costs - 3 5 Decrease/(increase) in receivables 154 (869) 504 Decrease in payables (103) (13) (46) Decrease/(Increase) in derivative 389 - (703) financial instruments Net cash inflow from operating 1,193 250 781 activities Investing activities Purchase of investments (32,583) (49,207) (85,715) Sale of investments 30,893 41,143 74,340 Return on covered calls 213 - 1,267 Net cash acquired on acquisition of - - 552 subsidiary Subsidiary acquisition costs - - (635) Net cash outflow from investing (1,477) (8,064) (10,191) activities Financing activities Interest paid on borrowings - (3) (5) Equity dividends paid (1,050) (1,046) (1,674) Net cash outflow from financing (1,050) (1,049) (1,679) activities Net decrease in cash and cash (1,334) (8,863) (11,089) equivalents Cash and cash equivalents at the 4,747 15,836 15,836 beginning of the period Cash and cash equivalents at the end 3,413 6,973 4,747 of the period Notes to the Group Results Six months ended 31st January 2010 1. Accounting policies The interim report has been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies are consistent with the preceding annual accounts. The results are based on unaudited Group consolidated accounts prepared under the historical cost basis except where IFRS require an alternative treatment. 2. Comparative information The financial information contained in this interim report does not constitute statutory accounts and that relating to the six month periods to 31st January 2009 and 31st January 2010 has not been audited. The financial information for the year ended 31st July 2009 has been extracted from the latest published audited accounts which have been filed with the Registrar of Companies and prepared under IFRS. The report of the auditors on those accounts contained no qualification or statement the provisions of the Companies Act 2006. 3. Significant accounting policies Investments held at fair value through profit or loss are initially recognised at fair value. As the entity's business is investing in financial assets with a view to profiting from their total return in the form of interest dividends or increases in fair value, listed equities and fixed income securities are designated as fair value through profit or loss on initial recognition. The entity manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the group is provided internally on this basis to the entity's key management personnel. After initial recognition, investments, which are classified as at fair value through profit and loss, are measured at fair value. Gains or losses on investments designated as at fair value through profit or loss are included in net profit or loss as a capital item, and material transaction costs on acquisition and disposal of investments are expensed and included in the capital column of the income statement. For investments that are actively traded in organised financial markets, fair value is determined by reference to the Stock Exchange quoted market bid prices or last traded prices, depending upon the convention of the exchange on which the investment is quoted, at the close of business on the balance sheet date. In respect of unquoted investments, or where the market for a financial investment is not active, fair value is established by using an appropriate valuation technique. Where no reliable fair value can be estimated for such unquoted equity instruments, they are carried at cost, subject to any provision for impairment. Investments in subsidiary companies are held at directors' valuation. All purchases and sales of investments are recognised on the trade date i.e. the date that the group commits to purchase or sell an asset. Dividend income from investments is recognised as income when the shareholders' rights to receive payment has been established, normally the ex-dividend date. When special dividends are received, the underlying circumstances are reviewed on a case by case basis in determining whether the amount is capital, or income, or a mixture of both, in nature. Amounts recognised as income will form part of the company's distribution.

Companies

Manchester & London Investment Trust (MNL)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today