Interim Results
Brunner Investment Trust PLC
20 July 2001
For immediate release 20th July 2001
THE BRUNNER INVESTMENT TRUST PLC
ANNOUNCEMENT OF INTERIM RESULTS
For the six months ended 31st May 2001
Net Asset Value
A summary of the results for the six months ended 31st May 2001 is set out
below. The Net Asset Value attributable to each Ordinary Share at 31st May
2001 was 504.4p. This compares with 540.2p at 30th November 2000 and
represents a fall of 6.6% compared to a decrease in the benchmark index (60%
FTSE All-Share Index, -4.5%, and 40% FT/S&P World (ex-UK) Index in sterling,
-7.0%,) of 5.5%.
Earnings
Earnings in the six months to 31st May 2001 of 5.12p per Ordinary Share have
increased by 26.4% compared with the same period last year, due in part to the
substantial increase in the amount of interest earned on a higher level of
cash deposits in the period.
Interim Dividend
The Board has declared an interim dividend of 3.20p net (2000 : 3.10p) per
Ordinary Share payable on 31st August 2001 to holders on the Register of
Members at the close of business on 3rd August 2001 (an increase of 3.2% on
the interim dividend paid last year).
Forecast Final Dividend
It is the Board's intention to pay a final dividend of at least 4.00p per
share (2000 : 4.00p) which would make a total of 7.20p per share.
- 2 -
Investment Review
Divergent sector performance continued to be a feature of world markets during
the six months ended 31st May 2001 with global equities falling by 6.7%. The
technology and telecommunications sectors continued to underperform the rest
of the market. As signs of a slowdown in the American economy became apparent
the Federal Reserve cut interest rates early in the New Year with further cuts
following as the year progressed. Many commentators were surprised by the
sharpness of the cuts as rates fell a total of 2.75% in the first six months
of 2001. Interest rates fell also in Europe and Japan though to a lesser
extent than in the USA. Forecasts of corporate profits have been reduced
significantly, particularly in the technology and telecommunication sectors,
further highlighting the unrealistic forecasts made by analysts during the
technology boom in 1999. Currency markets also remained volatile with the US
dollar showing overall strength against the Euro and the Yen.
The portfolio has continued to hold a higher cash position than normal thus
effectively reducing the Trust's gearing. Attention has been concentrated on
the defensive growth sectors such as pharmaceuticals, oils and financials.
Little change has taken place in the geographical spread of the portfolio.
With regard to the future, caution still seems necessary despite the falls
which have already taken place in world markets. Corporate profits seem likely
to remain under pressure for some time and on a longer term perspective
markets are still not valued particularly cheaply. However at some stage the
world economy will recover and excess capacity will be reduced thus giving
manufacturers back some pricing power. With interest rates and inflation
remaining low equities will again prove to be attractive investments. The
portfolio, with its broad diversification and high cash reserves, is in a good
position to take advantage of any attractive opportunities that become
available.
J F H Trott
Chairman
Enquiries:
For further information please contact:
Simon White
Dresdner RCM Global Investors
Tel: 020 7475 2700
Amy Fisher
Lansons Communications
Tel: 020 7490 8828
- 3 -
SUMMARY OF UNAUDITED RESULTS
STATEMENT OF TOTAL RETURN
for the six months ended 31st May 2001
2001
(£'000) (£'000) (£'000)
Revenue Capital Total
(Note 2)
Net losses on investments - (20,795) (20,795)
Income from investments 3,924 - 3,924
Other income 641 - 641
Investment management fee (281) (655) (936)
Expenses of administration (247) - (247)
Return before finance costs and taxation 4,037 (21,450) (17,413)
Finance costs of borrowings (649) (1,510) (2,159)
Return on ordinary activities before taxation 3,388 (22,960) (19,572)
Overseas taxation (84) - (84)
UK taxation (204) 204 -
(288) 204 (84)
Return on ordinary activities after taxation 3,100 (22,756) (19,656)
Dividends on Preference Stock (11) - (11)
Return attributable to Ordinary Shareholders 3,089 (22,756) (19,667)
Dividends on Ordinary Shares
Interim 3.2p (1,929) - (1,929)
Transfer to (from) Reserves 1,160 (22,756) (21,596)
Return per Ordinary Share (note 1) 5.12p (37.75p) (32.63p)
NET ASSET STATEMENT
as at 31st May 2001
2001 2001
(£'000) (£'000)
Fixed asset investments 330,531
Net current assets 25,960
Total assets less current liabilities 356,491
Creditors: amounts falling due after more than one year (51,985)
Total Net Assets 304,506
Called up share capital - Ordinary 15,071
Preference 450
15,521
Capital redemption reserve 929
Capital reserves - Realised 268,878
Unrealised 12,274
281,152
Revenue reserve 6,904
Shareholders' Funds 304,506
Net asset value per Ordinary Share 504.4p
The net asset value is based on 60,283,416 Ordinary Shares in issue.
- 4 -
SUMMARY OF UNAUDITED RESULTS
STATEMENT OF TOTAL RETURN
for the six months ended 31st May 2000
2000
(£'000) (£'000) (£'000)
Revenue Capital Total
(Note 2)
Net gains on investments - 11,754 11,754
Income from investments 3,393 - 3,393
Other income 275 - 275
Investment management fee (257) (599) (856)
Expenses of administration (101) - (101)
Return before finance costs and taxation 3,310 11,155 14,465
Finance costs of borrowings (678) (1,580) (2,258)
Return on ordinary activities before taxation 2,632 9,575 12,207
Overseas taxation (43) - (43)
UK taxation (122) 122 -
(165) 122 (43)
Return on ordinary activities after taxation 2,467 9,697 12,164
Dividends on Preference Stock (11) - (11)
Return attributable to Ordinary Shareholders 2,456 9,697 12,153
Dividends on Ordinary Shares
Interim 3.10p (1,880) - (1,880)
Transfer to Reserves 576 9,697 10,273
Return per Ordinary Share (note 1) 4.05p 15.98p 20.03p
NET ASSET STATEMENT
as at 31st May 2000
2000 2000
(£'000) (£'000)
Fixed asset investments 384,592
Net current assets 18,509
Total assets less current liabilities 403,101
Creditors: amounts falling due after more than one year (52,046)
Total Net Assets 351,055
Called up share capital - Ordinary 15,165
Preference 450
15,615
Capital redemption reserve 835
Capital reserves - Realised 257,353
Unrealised 71,497
328,850
Revenue reserve 5,755
Shareholders' Funds 351,055
Net asset value per Ordinary Share 578.0p
The net asset value is based on 60,660,000 Ordinary Shares in issue.
- 5 -
RESULTS
STATEMENT OF TOTAL RETURN
for the year ended 30th November 2000
2000
(£'000) (£'000) (£'000)
Revenue Capital Total
(Note 2)
Net (losses) on investments - (9,465) (9,465)
Income from investments 6,615 - 6,615
Other income 638 - 638
Investment management fee (505) (1,178) (1,683)
Expenses of administration (252) - (252)
Return before finance costs and taxation 6,496 (10,643) (4,147)
Finance costs of borrowings (1,263) (2,914) (4,177)
Return on ordinary activities before taxation 5,233 (13,557) (8,324)
Taxation
Overseas taxation (119) - (119)
UK taxation (235) 235 -
(354) 235 (119)
Return on ordinary activities after taxation 4,879 (13,322) (8,443)
Dividends on Preference Stock (22) - (22)
Return attributable to Ordinary Shareholders 4,857 (13,322) (8,465)
Dividends on Ordinary Shares
Interim 3.10p (1,881) - (1,881)
Final 4.00p (2,411) - (2,411)
7.10p (4,292) - (4,292)
Transfer to (from) reserves 565 (13,322) (12,757)
Return per Ordinary Share (note 1) 8.01p (21.98p) (13.97p)
NET ASSET STATEMENT
as at 30th November 2000
2000 2000
(£'000) (£'000)
Fixed asset investments 357,896
Net current assets 20,222
Total assets less current liabilities 378,118
Creditors: amounts falling due after more than one year (52,016)
Total Net Assets 326,102
Called up share capital - Ordinary 15,071
Preference 450
15,521
Capital redemption reserve 929
Capital reserves - Realised 273,003
Unrealised 30,905
303,908
Revenue reserve 5,744
Shareholders' Funds 326,102
Net asset per Ordinary Share 540.2p
The net asset value is based on 60,283,416 Ordinary Shares in issue
- 6 -
Cash Flow Statement
for the six months ended 31st May 2001 and comparative periods
Six Months Six Months Year to
to May 2001 to May 2000 November
2000
(£'000) (£'000) (£'000)
Net cash inflow from 3,100 2,191 5,072
operating activities
Servicing of Finance
Interest paid (2,107) (2,287) (4,405)
Dividends paid on preference (11) (11) (23)
stock
Net cash outflow on (2,118) (2,298) (4,428)
servicing of finance
Taxation
ACT repaid - - 1
UK income tax (paid) repaid (250) - 103
Net tax (paid) repaid (250) - 104
Financial Investment
Purchase of fixed asset (130,571) (174,002) (379,159)
investments
Sale of fixed asset 139,010 173,025 394,677
investments
Net cash inflow (outflow) 8,439 (977) 15,518
from financial activities
Equity dividends paid (2,411) (2,305) (4,185)
Net cash inflow (outflow) 6,760 (3,389) 12,081
before financing
Financing
Purchase of Ordinary Shares - (1,352) (3,265)
for cancellation
Expenses associated with - (25) (34)
share buy back
(Decrease) increase in short (209) 1,037 973
term loan
Net cash outflow from (209) (340) (2,326)
financing
Increase (decrease) in cash 6,551 (3,729) 9,755
- 7 -
Note 1
The returns per Ordinary Share are based on revenue or capital return to
Ordinary Shareholders, as appropriate, and on 60,283,416 Ordinary Shares being
the weighted average number of shares in issue throughout the period (31st May
2000 - 60,684,984 Shares; 30th November 2000 - 60,611,585 Shares).
Note 2
The revenue 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.
Note 3
This interim statement has been neither audited nor reviewed by the Company's
auditors. The interim statement has been prepared using the same accounting
policies as those adopted in the annual accounts for the year ended 30th
November 2000.
The non-statutory accounts for the year to 30th November 2000 are an extract
from the latest published accounts of the Company which have been delivered to
the Registrar of Companies. The auditors' opinion on those accounts was
unqualified and did not contain a statement under Section 237(2) or (3) of the
Companies Act 1985.
The Interim Report will be sent to Shareholders shortly and made available to
the public at the Registered Office of the Company, 10 Fenchurch Street,
London, EC3M 3LB.
- 8 -
Twenty Largest Equity Holdings as at 31st May 2001
Market % of
Value Total
(£'000) Assets *
Principal
Activities
BP 18,445 5.16 Integrated oil and
gas
GlaxoSmithkline 13,354 3.74 Pharmaceuticals
Shell Transport & Trading 11,367 3.18 Integrated oil and
gas
Vodafone Group 11,148 3.12 Telecommunications
HSBC Holdings 9,573 2.68 Banking and
financial services
AstraZeneca 7,425 2.08 Pharmaceuticals
Barclays 7,121 1.99 Banking and
financial services
Lloyds TSB 5,602 1.57 Banking and
financial services
British Telecom 5,173 1.45 Telecommunications
Man Group 4,757 1.33 Financial services
Royal Bank of Scotland 4,670 1.31 Banking and
financial services
Dresdner RCM Emerging Markets 3,862 1.08 Investment trust
Trust
General Electric Co 3,769 1.05 Industrial holding
America company
CGNU 3,750 1.05 Insurance
Amvescap 3,729 1.04 International fund
management
Prudential 3,715 1.04 Insurance
Great Universal Stores 3,500 0.98 General retail
Microsoft Corporation 3,399 0.95 Software and
computer services
Turbo Genset 3,211 0.90 Industrial
manufacturing
Halifax Group 3,120 0.87 Banking and
financial services
130,690 36.57
* Total assets include current liabilities
Portfolio Analysis as at 31st May 2001
%
United Kingdom 64.9
North America 19.7
Europe 8.3
Japan 3.2
Other Countries 1.8
Pacific Basin 1.2
Latin America 0.9
100.0
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