Interim Results

Mercury World Mining Trust PLC 27 July 2000 MERCURY WORLD MINING TRUST plc Interim Results for the six months ended 30th June 2000 Over the six months to 30th June 2000 the Company's net asset value per share has modestly outperformed its benchmark, albeit in a falling market. Performance to 30th June 2000 Six months One year Five years (with net income reinvested) Net asset value -14.4% +12.4% +12.4% Ordinary share price -18.7% +9.9% +3.0% HSBC Global Mining Index* -15.3% +1.6% -12.5% *capital only, adjusted for exchange rates relative to sterling. Performance based on mid-market values with net income reinvested on ex-dividend date. Source: Mercury, Datastream. For further information please contact: Dr Graham Birch - 020 7743 2690 Ian Barby - 020 7743 5224 Jonathan Ruck Keene - 020 7743 2178 Merrill Lynch Investment Managers The Chairman, Peter Wilmot-Sitwell, comments: 'An overwhelming majority of those shareholders voting supported the continuation of the Company at the Annual General Meeting held in March. A similar resolution will be put to shareholders at the AGM in each year. 'As part of our commitment to increasing shareholder value, we have continued the share buy-back programme, thereby improving the NAV per share and in the six months we have bought back and cancelled 8.75 million shares. However, the weaker sentiment towards the mining sector has resulted in the discount at which the Company's shares trade to their underlying NAV widening to 19% as at 30th June 2000. 'Sentiment towards the mining sector is mixed at present. Positive factors include the rising level of corporate activity, the increase in share buy backs, and the underlying commodity demand data pointing to better metal prices. Some concerns remain over the outlook for growth in the US, although growth in the rest of the world is likely to remain strong. We believe that metal prices will increase in the second half of the year, leading to better returns from mining companies. Reflecting this, we have remained geared throughout the period.' Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch Investment Managers, the Investment Manager, notes: 'Our portfolio strategy, although somewhat bullish in character, survived the downward trend in the markets and we modestly outperformed our benchmark. We believe that a continuation of reasonably strong economic growth, or even a soft landing in the US, would be satisfactory for the Company's portfolio. 'We therefore intend to maintain our current approach and expect markets to react positively in the coming months, justifying our decision to maintain a level of gearing, which is currently 11%.' CONSOLIDATED REVENUE STATEMENT for the six months ended 30th June 2000 Six months Six months Year ended ended 30th June ended 30th June 31st December 2000 1999 1999 £'000 £'000 £'000 (unaudited) (unaudited) (audited) (restated) (restated) Note Income 5 4,273 3,047 6,497 Less: Investment management fees 6 (920) (975) (2,147) Operating expenses 7 (251) (229) (560) -------- -------- -------- Net return before finance costs and taxation 3,102 1,843 3,790 Finance costs (791) (384) (1,027) -------- -------- -------- Revenue on ordinary activities before taxation 2,311 1,459 2,763 Taxation (709) (315) (525) -------- -------- -------- Revenue on ordinary activities after taxation 1,602 1,144 2,238 Dividend 4 - - (2,218) -------- -------- -------- Transfer to revenue reserve 1,602 1,144 20 ======== ======== ======== CONSOLIDATED STATEMENT OF TOTAL RETURN PER ORDINARY SHARE for the six months ended 30th June 2000 Six months Six months Year ended ended 30th June ended 30th June 31st December 2000 1999 1999 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Calculated on weighted shares: Earnings per ordinary share 0.87p 0.44p 1.00p Capital return per ordinary share (18.83p) 24.23p 51.02p -------- -------- ------- Total return per ordinary share (17.96p) 24.67p 52.02p ======== ======== ======= Calculated on period end shares: Earnings per ordinary share 0.88p 0.58p 1.17p Capital return per ordinary share (19.07p) 31.67p 60.11p -------- -------- ------- Total return per ordinary share (18.19p) 32.25p 61.28p ======== ======== ======= Dividend per ordinary share - - 1.20p ======== ======== ======= SUMMARISED CONSOLIDATED BALANCE SHEET as at 30th June 2000 30th June 30th June 31st December 2000 1999 1999 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Fixed assets Investments at valuation 201,389 198,012 249,412 -------- -------- -------- Current assets Investments of subsidiary undertakings 2,976 - 1,880 Debtors 1,579 2,844 359 -------- -------- -------- 4,555 2,844 2,239 -------- -------- -------- Creditors - amounts falling due within one year Bank overdraft 20,459 21,799 24,918 Other creditors 3,223 2,053 3,307 -------- -------- -------- 23,682 23,852 28,225 -------- -------- -------- Net current liabilities (19,127) (21,008) (25,986) -------- -------- -------- Total assets less liabilities 182,262 177,004 223,426 Provision for liabilities and charges 54 39 29 -------- -------- -------- Net assets 182,208 176,965 23,397 ======== ======== ======== Capital and reserves Share capital 9,110 9,834 9,548 Capital redemption reserve 21,809 21,086 21,371 Other capital reserves (75,064) (92,799) (40,319) -------- -------- -------- (44,145) (61,879) (9,400) Special reserve 221,928 234,897 229,974 Revenue reserve 4,425 3,947 2,823 -------- -------- -------- Total equity shareholders' funds 182,208 176,965 223,397 ======== ======== ======== Net asset value per ordinary share 100.00p 89.98p 116.99p ======== ======== ======== CONSOLIDATED CASH FLOW STATEMENT for the six months ended 30th June 2000 Six months Six months Year ended ended 30th June ended 30th June 31st December 2000 1999 1999 (unaudited) (unaudited) (audited) Net cash inflow from operating activities 1,306 1,644 1,672 Returns on investment and servicing of finance (791) (384) (1,027) Taxation (paid)/refunded (52) - 938 Capital expenditure and financial investment: Purchase of fixed asset investments (45,895) (23,932) (66,815) Proceeds from the sale of fixed asset investments 60,234 110,515 155,996 Exchange movements on foreign currency transactions (79) 168 (295) Equity dividends paid (2,218) (5,010) (5,010) investments Buy-back of ordinary shares (8,046) (116,064) (121,682) Continuation and share tender costs - (731) (690) -------- --------- --------- Increase/(decrease) in cash 4,459 (33,794) (36,913) ======== ========= ========= RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES Six months Six months Year ended ended 30th June ended 30th June 31st December 2000 1999 1999 (unaudited) (unaudited) (audited) (restated) (restated) Income before interest payable and taxation 3,102 1,843 3,790 Net purchases of investments by subsidiary undertakings (819) (30) (1,588) (Increase)/decrease in accrued income (79) 484 503 (Increase)/decrease in debtors (66) 24 45 (Decrease)/increase in creditors (112) (120) 48 Tax on investment income included within gross income (405) (527) (834) Profit on investment dealing by subsidiary undertakings (315) (30) (292) ------ ------ ------ Net cash inflow from operating activities 1,306 1,644 1,672 ====== ====== ====== NOTES ON THE INTERIM RESULTS 1. Principal activity The principal activity of the Company is that of an investment trust within the meaning of section 842 of the Income and Corporation Taxes Act 1988. The principal activity of its two subsidiary undertakings is investment dealing. 2. Basis of preparation The interim financial statements have been prepared on the basis of the accounting policies set out in the Company's financial statements at 31st December 1999. Income and operating expenses have been accrued in accordance with the same principles used in the preparation of the annual financial statements, subject to note 3 below. The taxation charge has been calculated by applying an estimate of the annual effective tax rate to the profit for the period. 3. Taxation The financial information contained in this interim statement follows the requirements of Financial Reporting Standard (FRS) 16 'Current Tax' to show franked investment income net of related tax credits. The figures for income and taxation in respect of prior periods have been restated accordingly. This change has no effect on the net income or net assets previously reported for those periods. 4. Dividend The Board has not declared an interim dividend, as dividends are only declared and paid annually in respect of each accounting period. 5. Income Six months Six months Year ended ended 30th June ended 30th June 31st December 2000 1999 1999 £'000 £'000 £'000 (unaudited) (unaudited) (audited) (restated) (restated) Income from investments: UK listed 306 103 402 Overseas listed 3,647 2,737 5,732 -------- -------- -------- 3,953 2,840 6,134 -------- -------- -------- Interest received and other income: Deposit interest 4 176 69 Other income 1 1 2 Profit on investment dealing by subsidiary undertakings 315 30 292 ------- ------- ------- 320 207 363 ------- ------- ------- Total 4,273 3,047 6,497 ======= ======= ======= 6. Investment management Six months Six months Year ended fees ended 30th June ended 30th June 31st December 2000 1999 2000 £'000 £'000 £'000 (unaudited) (unaudited) (audited) Investment management fees 901 949 2,056 Irrecoverable VAT thereon 19 26 91 --- --- ----- 920 975 2,147 === === ===== All investment management fees are charged to revenue. 7. Operating expenses £'000 £'000 £'000 (unaudited) (unaudited) (audited) Custody fee 95 90 207 Administration fee 56 53 122 Directors' emoluments 32 27 58 Registrars' fee and other administrative expenses 68 59 173 --- --- --- 251 229 560 === === === 8. Ordinary shares 30th June 30th June 31st December 2000 1999 1999 The weighted number of ordinary shares in issue during each period, on which the return per ordinary share was calculated, was: 184,496,621 257,097,260 224,955,622 The number of ordinary shares in issue at the end of the period was: 182,199,852 196,674,852 190,949,852 Share price 80.75p 74.50p 100.75p 9. Gearing ratio - % of NAV. As at 30th June 2000 the ratio of borrowings to net assets was 11.2% (31.12.1999 : 11.2%) 10. Publication of non-statutory accounts The financial information contained in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the six months ended 30th June 1999 and 2000 has not been audited. The information for the year ended 31st December 1999 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies and restated to reflect the requirements of Financial Reporting Standard ('FRS') 16 'Current Tax'. The report of the auditors on those accounts contained no qualification or statement under sections 237(2) or (3) of the Companies Act 1985. 27th July 2000 33 King William Street London EC4R 9AS

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