Half Yearly Report

RNS Number : 0226N

Brunner Investment Trust PLC

22 July 2014

 



For immediate release                                                                                    22 July 2014

THE BRUNNER INVESTMENT TRUST PLC

HALF-YEARLY FINANCIAL REPORT

For the six months ended 31 May 2014

Highlights

·      Net asset value (debt at fair value) per share up by 2.2%

·      Earnings per ordinary share  7.8p (2013 - 8.6p)

·      Interim dividends for the period 6.1p¹ (2013 - 6.00p)

Revenue	At 31 May 2014			At 31 May 2013				% change
Available for ordinary dividend	£3,357,000			£3,728,000				-9.9
Earnings per ordinary share	7.8p			8.6p				-9.3
Interim dividends per ordinary share	6.1p1			6.0p				1.7
Retail price index	255.9			250.0				2.4
1first interim 3.0p, second interim 3.1p
Assets	At 31 May 2014			At 30 November 2013				% change
Net Asset Value per ordinary share (debt at fair value)	606.7p2			593.6p2				+2.2
Ordinary share price	533.5p			508.0p				+5.0
Total net assets (debt at par)	£274,403,616			£268,253,844				+2.3
2 The Net Asset Value per Ordinary Share (debt at par value) was 636.8p per share as at 31 May 2014 (30 November 2013 - 622.6p) an increase of 2.3%.
Net Asset Value relative to Benchmark					Capital Return3		Total Return*3
Change in net asset value					2.2%		4.1%
Change in benchmark					2.8%		4.4%
Performance against benchmark					-0.6%		-0.3%
3 Debt at fair value. Debt at par capital return was 2.3% and total return was 4.1%.
Portfolio relative to Benchmark					Capital Return		Total Return*
Net portfolio return (excluding cash & gilts)					2.9%		4.7%
Change in benchmark					2.8%		4.4%
Performance against benchmark					0.1%		0.3%

        * Total returns are calculated with net dividends reinvested.

Interim Management Report

Net Asset Value

A summary of the results for the six months ended 31 May 2014 is set out below.  The net asset value (debt at fair value) attributable to each ordinary share at 31 May 2014 was 606.7p. This compares with 593.6p at 30 November 2013, an increase of 2.2% over the period. The capital return on the benchmark index (50% FTSE All-Share, 50% FTSE World Index (ex UK Sterling), was 2.8% over the period. 

Earnings

Earnings decreased by 9.3% to 7.8p per ordinary share in the six months to 31 May 2014 (2013 - 8.6p), reflecting lower income from investment which was impacted by the strength of Sterling, the sale of a Gilt, and fewer special dividends received from portfolio companies during this period. 

Gearing

The gearing at 30 November 2013 was 5.3% and at 31 May 2014 was 7.3%, reflecting the fact that more of the cash held has been invested in the portfolio since the year end.Gearing is calculated after deducting cash and the value of holdings in government securities held to offset some of the long term debentures issued.

Quarterly Dividends

As we reported in the annual report, for the year ending 30 November 2013, the company has moved to the payment of quarterly dividends. The board declared a first quarterly dividend of 3.0p per ordinary share which was paid on 27 June 2014.  The board has now declared a second quarterly dividend of 3.10p per ordinary share payable on 22 September 2014 to holders on the register of members at the close of business on 22 August 2014.  A third quarterly payment will be made in December and the final dividend will be proposed for payment in March 2015.

Board

We are pleased to welcome Carolan Dobson and Jim Sharp who have joined us as directors since the beginning of the current financial year  -  on 1 December  2013 and 1 January 2014 respectively.

Sir William Worsley retired from the board at the AGM on 18 March 2014.

Material events and transactions

In the six month period ended 31 May 2014 the following material events and transactions have taken place.

·      At the annual general meeting of the company held on 18 March 2014, all the resolutions put to shareholders were passed.

·      During the period under review the company did not purchase any ordinary shares for cancellation.

There were no related party transactions in the period.

Since the period end, no further ordinary shares have been purchased for cancellation.

Principal Risks and Uncertainties     

The principal risks and uncertainties facing the company over the next six months are broadly unchanged from those described in the Annual Financial Report for the year ended 30 November 2013. These are set out in a table in the Strategic Report on page 9 of the annual report, together with commentary on the board's approach to mitigating the risks and uncertainties, under the following headings: Investment Strategy; Market Volatility; and Financial and Liquidity Risk.

Responsibility Statement

The directors confirm to the best of their knowledge that:

·      The condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with the Accounting Standards board's Statement 'Half-Yearly Financial Reports'; and

·      The interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7 R 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, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      The interim management report includes a fair review of the information concerning related parties transactions as required by the Disclosure and Transparency Rule 4.2.8 R.

The half-yearly financial report was approved by the board on • July 2014 and the above responsibility statement was signed on its behalf by the Chairman.

Keith Percy

Chairman

Enquiries:

For further information, please contact:

Allianz Global Investors Europe GmbH, UK Branch

Melissa Gallagher

Head of Investment Trusts

Tel: [phone]

Investment Managers' Review   

Market Review

Despite a weak start to 2014, global equities ended the period under review in positive territory, supported by continued low interest rates and improving economic data from the U.S, the U.K. and parts of Europe. Markets were also helped by a pick-up in corporate share repurchases and takeover activity. Low interest rates and on-going monetary support by central banks have compressed equity and bond market volatility, indicating a high level of complacency among investors.

The year started with selling pressure due to the tapering of bond purchases by the US Federal Reserve and initial concerns that interest rates would rise earlier than previously anticipated. However, these concerns were soon assuaged and on balance U.S. employment and housing data indicated that the economic recovery was on track. While the 2.9% decline in GDP in the first quarter of 2014 was the steepest contraction since the US emerged from recession, much of the decline was weather related.

In Europe, economic data was mixed. The U.K. continued to recover amid growing concerns about a housing bubble. Rising interest rate expectations led to the Pound strengthening considerably. Eurozone first quarter GDP growth was marginal at 0.2% and inflation remained weak. Germany and Spain showed growth while Portugal, France and Italy did not. The ECB cut interest rates and announced measures aimed at stimulating bank lending. In the European Parliamentary elections, the pro-EU majority held sway, despite the far-right making inroads.

Japanese equities rallied during the second quarter of the year on cautious optimism that the government was making progress on structural reforms to the economy. In China, economic indicators showed improvement as the May "flash" PMI increased alongside both export and retail sales growth.

Portfolio Review

Over the period the portfolio's NAV rose 2.2%, compared with an increase of 2.8% for the benchmark index (50% FTSE All-Share, 50% FTSE World ex-UK). Performance benefitted from positive stock selection in Industrials, Consumer Services and Technology. The overweight positions in Health Care and Oil & Gas also helped. These positives were offset by stock selection in Financials, Telecommunications and Consumer Services, and the underweight in Utilities.

Tyman was the top contributor to performance. A recent meeting with management confirmed that operationally the company is doing well. The Truth acquisition integration is progressing smoothly and longer term there are plans in place for further optimisation of the manufacturing footprint which should be positive for margins. Their markets are also doing well, particularly the US, with the UK also showing encouraging signs. Even Europe, which has been weak, looks like it may have bottomed out. Much of this improvement is reflected in the stock's valuation now and we have been taking profits as the share price has moved higher.

Allergan, the recipient of an unsolicited takeover bid by Valeant Pharmaceuticals, also contributed. We continue to believe that Allergan has an attractive skin care, eye care and neuromodulator franchise and that the quality and growth prospects remain strong, but are concerned that valuations are beginning to become a bit stretched.

Intercontinental Hotels was another top holding. First quarter results were very strong with revenue per available room up 6.1%. The company also announced a special dividend and a strategic review of further asset sales. The share price was also helped by rumoured £6bn bid from a US company, which was rejected.

Mothercare had the most negative impact on performance. The shares have been volatile as the market is divided about the intrinsic value of the company. The majority of the analysts covering the stock have sell recommendations because they think the UK business will continue to disappoint. We acknowledge that the UK operations are challenged and may continue to trade at a loss for the next few years. However, the company's international franchise business has been hugely successful. Over the past six years, Mothercare's international network sales have risen from £286m to £729m, a compound growth rate of 17%. This has been driven by a combination of organic growth and an increase in the number of Mothercare international stores, which have risen from 494 in 2008 to 1221 today. Our valuation work suggests that the market has consistently been overly negative on the UK business and largely overlooked the strength of the international operations.

Biotechnology company Celgene also detracted. The shares initially weakened in March on news that a hearing challenging the company's patent for its blood cancer drug Revlimid would be held earlier than anticipated. The shares began to recover in May when the pre-trial hearing went better than expected. Celgene's long-term fundamentals remain in place and sentiment should improve once the patent dispute is finally resolved.

Balfour Beatty was also weak as the company issued a profit warning and removed its CEO. The UK business continues to suffer cost and execution issues and earnings guidance for this financial year was reduced by 15%. While there is a lot of uncertainty regarding what actions the company will take in order to turn the business around, there are a number of scenarios by which value could be unlocked through asset disposals and a renewed focus on the core construction and services business.

New holdings during the period included Weir Group, William Hill, Ashmore Group, EOG Resources and Monsanto. A number of securities were sold including Henkel, Inmarsat, Toyota Motor and Genting Singapore.

Outlook

Ever since the credit crisis, equity markets have benefitted from expansionary monetary policies, a global earnings recovery and a reduction in the equity risk premium. Current and future monetary policy will remain generally accommodative although not to the same extent as we have seen. Earnings are anticipated to still grow, albeit at a lower rate. Markets valuations, for example on a cyclically-adjusted P/E, look fair in absolute terms although they remain attractive compared to government bonds. We therefore remain positive on equities, although market returns overall are likely to be lower than we have seen in the recent past and active management is required more than ever to augment performance.

The ongoing extended period of low volatility in global equities has resulted in lower portfolio tracking errors and reduced the opportunities that active managers have for generating outperformance with similar levels of risk taken in the past. We have responded to this environment in a prudent manner by reducing the number of holdings in our portfolios in order to concentrate more on our highest conviction investment ideas.  These actions have increased the active share of the portfolio to circa 75% and reduced the number of stocks held to 85. 

Areas where we continue to find attractive quality growth opportunities include health care, technology, media and industrials.

In health care, there have been significant and exciting breakthroughs in areas such as oncology and immunology which are positive for a number of companies we own, including GlaxoSmithKline, Roche, Celgene, and Astellas Pharma.

In technology and media, the move to cloud computing and the rapid growth in mobile internet and e-commerce provide opportunities for companies that can help businesses transform their businesses to a cloud-based environment, such as Microsoft, as well as those exposed to online advertising and travel, such as Google and Priceline Group.

In Industrials, the "Internet of Things" will allow companies like Schneider Electric to embed real-time monitoring capabilities into their products which will position them even more closely to their customers and offer real opportunities to grow high quality recurring aftermarket revenues. Process automation is another growth area where companies such as Spectris, Flowserve and SMC are well-placed.

These are all powerful secular trends that companies in the portfolio are capturing and sharing with shareholders in the form of higher earnings and dividend growth. We believe that the portfolio remains well-placed, even if markets struggle to generate the same return that we have seen over the last few years.

Lucy MacDonald and Jeremy Thomas

Allianz Global Investors

BRUNNER INVESTMENT TRUST PLC

LISTED EQUITY HOLDINGS AS AT 31 MAY 2014   

Security Name	Market Value	Total Assets
	£'000s	%	Principal Activity
Royal Dutch Shell 'B' Shares	11,453	3.66	Oil & Gas Producers
HSBC	9,490	3.04	Banks
GlaxoSmithKline	9,150	2.93	Pharmaceuticals & Biotechnology
BP	8,542	2.73	Oil & Gas Producers
Vodafone	6,821	2.18	Mobile Telecommunications
Microsoft	6,124	1.96	Software & Computer Services
Monsanto	6,034	1.93	Food Producers
Roche Holdings	5,819	1.86	Pharmaceuticals & Biotechnology
BG Group	5,324	1.70	Oil & Gas Producers
AbbVie	4,951	1.58	Pharmaceuticals & Biotechnology
UBM	4,800	1.54	Media
Rio Tinto	4,751	1.52	Mining
EOG Resources	4,695	1.50	Oil & Gas Producers
BHP Billiton	4,689	1.50	Mining
Estee Lauder "A" Shares	4,683	1.50	Personal Goods
Walgreen	4,501	1.44	Food & Drug Retailers
Reed Elsevier	4,384	1.40	Media
Muenchener Rueckver	4,226	1.36	Non-Life Insurance
Unilever	4,106	1.31	Food Producers
Hays	4,062	1.30	Support Services
UBS	4,034	1.29	Banks
Xchanging	3,964	1.27	Support Services
CCR	3,910	1.25	Industrial Transportation
Boot (Henry)	3,890	1.24	Construction & Materials
Tyman	3,845	1.23	Construction & Materials
Hansteen Holdings	3,795	1.21	Real Estate
Friends Life (formerly Resolution)	3,771	1.21	Life Insurance
Intercontinental Hotels Group	3,765	1.20	Travel & Leisure
Diageo	3,742	1.20	Beverages
Schneider Electric	3,639	1.16	Electronic & Electrical Equipment
Tesco	3,523	1.13	Food & Drug Retailers
Nestle	3,407	1.09	Food Producers
Astellas Pharma	3,406	1.09	Pharmaceuticals & Biotechnology
Priceline.com	3,381	1.08	Travel & Leisure
SMC	3,350	1.07	Industrial Engineering
Smith & Nephew	3,316	1.06	Health Care Equipment & Services
Wells Fargo	3,310	1.06	Banks
Celgene	3,282	1.05	Pharmaceuticals & Biotechnology
Ameriprise Financial	3,188	1.02	Financial Services
AMETEK	3,134	1.00	Electronic & Electrical Equipment
Fresenius	3,069	0.98	Health Care Equipment & Services
Centrica	3,059	0.98	Gas, Water & Multiutilities
Amadeus	3,008	0.96	Support Services
BASF	3,003	0.96	Chemicals
Anadarko Petroleum	2,953	0.94	Oil & Gas Producers
Mothercare	2,948	0.94	General Retailers
Visa	2,926	0.94	Financial Services
Suncor Energy	2,925	0.94	Oil & Gas Producers
Cielo	2,901	0.93	Financial Services

Security Name	Market Value	Total Assets
	£'000s	%	Principal Activity
United Health	2,881	0.93	Health Care Equipment & Services
Microchip Technology	2,870	0.92	Technology Hardware & Equipment
Google	2,850	0.91	Software & Computer Services
Apple	2,850	0.91	Technology Hardware & Equipment
William Hill	2,844	0.91	Travel & Leisure
Brambles	2,801	0.90	General Industrials
CBS	2,745	0.88	Media
Australia & New Zealand Bank	2,700	0.86	Banks
Agilent Technologies	2,647	0.85	Electronic & Electrical Equipment
Itochu	2,613	0.84	Support Services
ICAP	2,454	0.79	Financial Services
Flowserve	2,384	0.76	Industrial Engineering
Balfour Beatty	2,383	0.76	Construction & Materials
Citigroup	2,378	0.76	Banks
Weir Group	2,358	0.75	Industrial Engineering
AMEC	2,339	0.75	Oil Equipment, Services & Distribution
Tullett Prebon	2,268	0.73	Financial Services
BOC Hong Kong Holdings	2,252	0.72	Banks
Allergan	2,222	0.71	Pharmaceuticals & Biotechnology
Shire	2,219	0.71	Pharmaceuticals & Biotechnology
China Mobile	2,055	0.66	Mobile Telecommunications
Cie Financiere Richemont	2,046	0.65	Personal Goods
UCB	2,007	0.64	Pharmaceuticals & Biotechnology
BAE Systems	1,973	0.63	Aerospace & Defence
Adidas	1,923	0.63	Personal Goods
Petroceltic International	1,913	0.61	Oil & Gas Producers
Taiwan Semiconductor (ADS)	1,830	0.59	Electronic & Electrical Equipment
FirstGroup	1,821	0.58	Travel & Leisure
AIA	1,634	0.52	Life Insurance
Technip	1,625	0.52	Oil Equipment, Services & Distribution
Spectris	1,604	0.51	Electronic & Electrical Equipment
IG Group	1,592	0.51	Financial Services
Ashmore	1,588	0.51	Financial Services
Cnooc	1,366	0.45	Oil & Gas Producers
Jiangsu Express	1,320	0.42	Industrial Transportation
	294,404	94.20

FIXED INTEREST HOLDINGS
at 31 May 2014
	Market Value	Total Assets
	£'000s	%	Principal Activity
Treasury Stock 1.875% IL 22/11/22	11,144	3.57	Gilt
Treasury Stock 1.25% IL 22/11/17	6,947	2.22	Gilt
	18,091	5.79
UNLISTED EQUITY HOLDINGS
at 31 May 2014
	Market Value	Total Assets
	£'000s	%	Principal Activity
First Debenture Finance	24	0.01	Financial Services
Fintrust Debenture	4	0.00	Financial Services
	28	0.01

GEOGRAPHICAL ANALYSIS AS AT 31 MAY 2014

	%
United Kingdom*	52.05
North America	25.57
Europe	12.10
Pacific Basin	5.11
Japan	2.99
Latin America	2.18
Total	100.00

*Includes Gilts.

SECTORAL ANALYSIS AS AT 31 MAY 2014

	%
Financials	17.45
Industrials	16.92
Oil & Gas	13.80
Healthcare	13.54
Consumer Services	11.11
Consumer Goods	8.30
Gilts	5.79
Technology	5.29
Basic Materials	3.98
Telecommunications	2.84
Utilities	0.98
Total	100.00

SUMMARY OF UNAUDITED RESULTS

INCOME STATEMENT

for the six months ended 31 May 2014

	Revenue	Capital	Total Return
	£'000s	£'000s	£'000s
			(Note 2)
Net gains on investments at fair value	-	8,482	8,482
Net gains on foreign currency	-	24	24
Income from investments	4,683	-	4,683
Other income	50	-	50
Investment management fee	(216)	(505)	(721)
Administration expenses	(308)	(3)	(311)
Net return on ordinary activities before finance costs and taxation	4,209	7,998	12,207
Finance costs: interest payable and similar charges	(672)	(1,543)	(2,215)
Net return on ordinary activities before taxation	3,537	6,455	9,992
Taxation	(180)	-	(180)
Net return attributable to ordinary shareholders	3,357	6,455	9,812
Net return per ordinary share (Note 1)
(basic and diluted)	7.79p	14.98p	22.77p

BALANCE SHEET

as at 31 May 2014

	£'000s
Investments held at fair value through profit or loss	312,523
Net current assets	11,601
Total assets less current liabilities	324,124
Creditors: amount falling due after more than one year	(49,721)
Total net assets	274,403
Called up share capital	10,772
Capital redemption reserve	5,228
Capital reserves	244,677
Revenue reserve	13,726
Equity shareholders' funds	274,403
Net asset value per ordinary share	636.8p
The net asset value is based on 43,089,418 ordinary shares in issue

SUMMARY OF UNAUDITED RESULTS

INCOME STATEMENT

for the six months ended 31 May 2013

	Revenue	Capital	Total Return
	£'000s	£'000s	£'000s
			(Note 2)
Net gains on investments at fair value	-	36,749	36,749
Net gains on foreign currency	-	12	12
Income from investments	4,992	-	4,992
Other income	27	-	27
Investment management fee	(203)	(473)	(676)
Administration expenses	(247)	(4)	(251)
Net return on ordinary activities before finance costs and taxation	4,569	36,284	40,853
Finance costs: interest payable and similar charges	(676)	(1,552)	(2,228)
Net return on ordinary activities before taxation	3,893	34,732	38,625
Taxation	(165)	-	(165)
Net return attributable to ordinary shareholders	3,728	34,732	38,460
Net return per ordinary share (Note 1)
(basic and diluted)	8.63p	80.40p	89.03p

BALANCE SHEET

as at 31 May 2013

	£'000s
Investments held at fair value through profit or loss	298,941
Net current assets	12,417
Total assets less current liabilities	311,358
Creditors: amount falling due after more than one year	(49,957)
Total net assets	261,401
Called up share capital	10,775
Capital redemption reserve	5,225
Capital reserves	231,623
Revenue reserve	13,778
Equity shareholders' funds	261,401
Net asset value per ordinary share	606.5p
The net asset value is based on 43,101,918 ordinary shares in issue

SUMMARY OF UNAUDITED RESULTS

INCOME STATEMENT

for the year ended 30 November 2013

	Revenue	Capital	Total Return
	£'000s	£'000s	£'000s
			(Note 2)
Net gains on investments at fair value	-	45,481	45,481
Net losses on foreign currencies	-	(18)	(18)
Income from investments	9,045	-	9,045
Other income	68	-	68
Investment management fee	(413)	(963)	(1,376)
Administration expenses	(488)	(10)	(498)
Net return on ordinary activities before finance costs and taxation	8,212	44,490	52,702
Finance costs: interest payable and similar charges	(1,349)	(3,095)	(4,444)
Net return on ordinary activities before taxation	6,863	41,395	48,258
Taxation	(296)	-	(296)
Net return attributable to ordinary shareholders	6,567	41,395	47,962
Net return per ordinary share (Note 1)
(basic and diluted)	15.22p	95.94p	111.16p

BALANCE SHEET

as at 30 November 2013

	£'000s
Investments held at fair value through profit or loss	300,321
Net current assets	17,776
Total assets less current liabilities	318,097
Creditors: amount falling due after more than one year	(49,843)
Total net assets	268,254
Called up share capital	10,772
Capital redemption reserve	5,228
Capital reserves	238,222
Revenue reserve	14,032
Equity shareholders' funds	268,254
Net asset value per ordinary share	622.6p
The net asset value is based on 43,089,418 ordinary shares in issue

 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

	Called up Share Capital £'000s	Capital Redemption Reserve £'000s	Capital Reserve £'000s	Revenue Reserve £'000s	Total £'000s
Six months ended 31 May 2014
Net Assets at 1 December 2013	10,772	5,228	238,222	14,032	268,254
Revenue return	-	-	-	3,357	3,357
Dividends on ordinary shares	-	-	-	(3,663)	(3,663)
Capital return	-	-	6,455	-	6,455
Net assets at 31 May 2014	10,772	5,228	244,677	13,726	274,403
Six months ended 31 May 2013
Net assets at 1 December 2012	10,811	5,189	197,558	13,636	227,194
Revenue return	-	-	-	3,728	3,728
Shares repurchased during the period	(36)	36	(667)	-	(667)
Dividends on ordinary shares	-	-	-	(3,586)	(3,586)
Capital return	-	-	34,732	-	34,732
Net assets at 31 May 2013	10,775	5,225	231,623	13,778	261,401
For the year ended 30 November 2013
Net assets at 1 December 2012	10,811	5,189	197,558	13,636	227,194
Revenue return	-	-	-	6,567	6,567
Shares repurchased during the year	(39)	39	(731)	-	(731)
Dividends on ordinary shares	-	-	-	(6,171)	(6,171)
Capital return	-	-	41,395	-	41,395
Net assets at 30 November 2013	10,772	5,228	238,222	14,032	268,254

SUMMARY OF UNAUDITED RESULTS

CASH FLOW STATEMENT

	Six Months ended 31 May 2014		Six Months ended 31 May 2013		Year ended 30 November 2013
	£'000s		£'000s		£'000s
Net cash inflow from operating activities	4,271		3,598		6,955
Return on investments and servicing of finance
Interest paid	(2,326)		(2,334)		(4,651)
Dividends paid on preference stock	(11)		(11)		(23)
Net cash outflow from servicing of finance	(2,337)		(2,345)		(4,674)
Capital expenditure and financial investment
Purchase of fixed asset investments	(38,671)		(37,942)		(92,452)
Sale of fixed asset investments	35,328		41,212		102,158
Net cash (outflow) inflow from capital expenditure and financial investment	(3,343)		3,270		9,706
Equity dividends paid	(3,663)		(3,586)		(6,171)
Net cash (outflow) inflow before financing	(5,072)		937		5,816
Financing
Purchase of ordinary shares for cancellation	-		(667)		(731)
(Decrease) increase in cash	(5,072)		270		5,085
Reconciliation of return on ordinary activities before finance costs and taxation to net cash flow from operating activities
Total return before finance costs and taxation	12,207		40,853		52,702
Add: Net gains on investments at fair value	(8,482)		(36,749)		(45,481)
Add: Special dividends credited to capital	1,182		-		-
Add: Effective yield amortisation	(104)		23		(76)
Less: Net (gains) losses on foreign currency	(24)		(12)		18
Less: Overseas tax suffered	(180)		(165)		(296)
	4,599		3,950		6,867
(Increase) decrease in debtors	(301)		(297)		77
(Decrease) increase in creditors	(27)		(55)		11
Net cash inflow from operating activities	4,271		3,598		6,955
Reconciliation of net cash flow to movement in net debt
Net cash (outflow) inflow	(5,072)		270		5,085
Net gains (losses) on foreign currency	24		12		(18)
Decrease in long term loans	122		115		229
Movement in net (debt) funds	(4,926)		397		5,296
Net debt brought forward	(32,814)		(38,110)		(38,110)
Net debt carried forward	(37,740)		(37,713)		(32,814)

NOTES

Note 1

The returns per ordinary share have been calculated using a weighted average number of shares in issue of 43,089,418 (31 May 2013 - 43,200,814; 30 November 2013 - 43,146,811 shares).

Note 2

The total column of this statement is the profit and loss account of the company.

All revenue and capital items derive from continuing operations.  No operations were acquired or discontinued in the period.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the company have been reflected in the Income Statement.

Included in the cost of investments are transaction costs on purchases which amounted to £100,000

(31 May 2013 - £109,000; 30 November 2013 - £212,000) and transaction costs on sales which amounted to £35,000 (31 May 2013 - £31,000; 30 November 2013 - £78,000).

 Note 3

Investments are designated as held at fair value through profit or loss in accordance with FRS 26 'Financial Instruments: Recognition and Measurement'.  Listed investments are valued at bid market prices.

Note 4

In accordance with FRS21 'Events after the Balance Sheet Date', the final dividend payable on ordinary shares is recognised as a liability when approved by shareholders. Interim dividends are recognised only when paid.

Dividends payable on ordinary shares in respect of earnings for each period are as follows:

	Six months ended 31 May 2014 £'000s	Six months ended 31 May 2013 £'000s	Year ended 30 November 2013 £'000s
Final dividend 8.50p paid 26 March 2014  (2013 - 8.30p)	3,663	3,586	3,586
Interim dividend 6.00p paid 30 August 2013	-	-	2,585
	3,663	3,586	6,171

Dividends payable at the period end are not recognised as a liability under FRS 21 'Events after the Balance Sheet Date'.  Details of these dividends are set out below.

	Six months ended 31 May 2014 £'000s	Six months ended 31 May 2013 £'000s	Year ended 30 November 2013 £'000s
First interim dividend 3.00p paid 27 June 2014	1,293	-	-
Second interim dividend 3.10p payable 22 September 2014 (2013 - 6.00p)	1,336	2,586	-
Third interim dividend	-	-	-
Final dividend 8.50p	-	-	3,663
	2,629	2,586	3,663

The interim and final dividends above are based on the number of shares in issue at the period end. However, the dividend payable will be based upon the number of shares in issue on the record date and will reflect any purchase or cancellations of shares by the company settled subsequent to the period end.

Note 5

The directors believe it is appropriate to continue to adopt the going concern basis in preparing the financial statements, as the assets of the company consist mainly of securities which are readily realisable and accordingly, that the company has adequate financial resources to continue in operational existence for the foreseeable future.

Note 6

The half yearly report has neither been audited nor reviewed by the company's auditors. The financial information for the year ended 30 November 2013 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and restated by reference to the changes in accounting policies detailed above. The auditor's report on those accounts was unqualified and did not contain a statement under either section 498(2) or (3) of the Companies Act 2006.

In accordance with the UK's disclosure requirements for listed companies, the company is required to make limited additional and updated disclosures, mainly relating to the first and third quarters of the financial year.  These Interim Management Statements are released via the Regulatory News Service and posted on the company's website www.brunner.co.uk on or shortly before 19 April and 19 October each year.

The half yearly financial report will be sent to shareholders in early August 2014 and will be available to members of the public from the company's registered office at 199 Bishopsgate, London EC2M 3TY.

 

END

 

 

IR BSGDRCSDBGSD