Monthly Update

Lindsell Train Investment Trust PLC 25 October 2006 The Lindsell Train Investment Trust PLC As at 30 Sep 2006 Fund Objective To maximise long-term total returns subject to the avoidance of loss of absolute value and with a minimum objective to maintain the real purchasing power of Sterling capital, as measured by the annual average yield on the 2.5% Consolidated Loan Stock. Net Asset Value GBP 143.52 Share Price GBP 143.00 Premium (Discount) (0.4%) Market Capitalisation GBP 28.6mn Benchmark (21/2% Con Ann Avg Yield +4.3%) +0.4 Source: Bloomberg; NAV-Lindsell Train. Share Price quoted is closing mid price. See Benchmark definition. Performance History (based in 2001 2002 2003 2004 2005 YTD 2006 GBP) Net Asset Value TR% +3.2 -9.6 +3.1 +23.7 +16.5 +8.8 Share Price TR% +18.5 -19.8 -8.7 +20.6 +27.5 +13.0 Source: LTL and S&P Micropal. Performance years listed Jan - Dec. Launch date 22 Jan 2001. TR=Total Return (with dividends reinvested) *Source: Lindsell Train Ltd. Past performance is not a guide to future performance. The price of units and the income from them may go down as well as up. Investors may not get back what they invested. 2005 Performance Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Asset Value TR% +1.4 +0.3 +1.7 +0.2 +3.4 +2.9 +0.0 +0.2 +1.0 -1.5 +2.3* +2.9 Share Price TR% +8.6 +3.5 -3.4 +1.8 +2.6 +9.3 +0.4 -2.3 +2.4 -3.9 +1.2 +4.0 Source: LTL and S&P Micropal unless otherwise indicated. Performance years listed Jan - Dec. Launch date 22 Jan 2001. TR=Total Return (with dividends reinvested) *Source: Lindsell Train Ltd. 2006 Performance Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Asset Value TR% +0.9 +1.9 +1.2 -1.8 -2.0 +1.8 +1.7 +2.1 +3.2 Share Price TR% -3.0 +7.5 +1.5 +3.4 -1.5 -2.6 +3.2 +4.1 +5.7 Source: LTL and S&P Micropal unless otherwise indicated. Performance years listed Jan - Dec. Launch date 22 Jan 2001. TR=Total Return (with dividends reinvested) *Source: Lindsell Train Ltd. Past performance is not a guide to future performance. The price of units and the income from them may go down as well as up. Investors may not get back what they invested. Industry Breakdown % of NAV Bonds 17.9 Preference Shares 13.1 Equity - Media 12.3 Equity - Banks & Investment Co. 5.6 Equity - Leisure & Ent. 12.5 Equity - Food & Beverage 28.6 Equity - Consumer Goods 1.7 Equity - Internet 1.6 Investment Fund 20.5 Cash & Equivalent (13.8) Total 100.0 Source: Lindsell Train Top 10 Holdings % of NAV HBOS 9.25% Non Cum Pref Stk 13.1 Barr AG 10.7 Lindsell Train Global Media (Dist) 10.4 Cadbury Schweppes 7.7 Diageo 7.6 21/2% Consolidated Loan Stock 6.9 Wolverhampton & Dudley Brewery 6.4 Nintendo 6.1 US Gov Treasury 6.25% 5.8 Lindsell Train Japan (Dist) 5.7 Source: Lindsell Train Fund Exposure Bonds Prefs Equity Funds Cash % of NAV UK % 12.1 13.1 49.1 4.4 (14.3) 64.4 USA % 5.8 - 2.7 - 5.1 13.6 Europe (ex UK) % - - 4.4 - (2.3) 2.1 Japan % - - 6.1 5.7 (2.3) 9.5 Global % - - - 10.4 - 10.4 Total 17.9 13.1 62.3 20.5 (13.8) 100.0 Source: Lindsell Train Fund Manager's Comments September saw new highs for the NAVs of both the Company (closing at £143.5, up 3.2% on the month) and its third largest investment - the holding in the Lindsell Train Global Media Fund, at 10.4% of LTIT assets. The NAV of the Media Fund hit $149.2, up 17.5% in US Dollar terms in 2006 to date, for a gain of a near 50.0% over the almost five years of its life (it launched in November 2001). The Fund is important for your Company not only for the size of its investment, but because several of the Company's direct equity positions are also held in the Fund. This overlap reinforces the commitment we have made to the strategic ideas driving the Fund. These ideas are simply stated. The increasing commercial application of digital technology has led to a proliferation of the means to deliver media 'content' - whether information or entertainment - to users. This proliferation has two important investment implications. First, the burgeoning of distribution platforms has intensified competition between those platforms, on occasion severely damaging some previously successful business models. For instance, it seems unlikely that free-to-air TV services in the UK will ever be as profitable as in the past, now ITV has lost its effective monopoly to other platforms, notably satellite and Internet. Next, the digitisation of 'content' has rendered it either more useful or more fun. This enhancement of the value of content enhances the stock market value of those relatively rare companies that own or create 'must have' or 'must see' data or programming. The Media Fund exists to exploit these two opportunities. The majority of the Fund's capital is committed to content owners. In addition, taking advantage of its 'hedging' powers, The Fund shorts shares in media distribution companies, although on a more modest scale. Our biggest successes to date have come from conventional, 'long' holdings - for instance in outstanding franchises such as McGraw Hill (especially its Standard & Poors rating subsidiary), Manchester United and Pixar, the last two both taken over. The Fund's net long position is 90.0%, reflecting our enthusiasm for our long ideas. LTIT shareholders should also note that this 90.0% long position effectively adds another 9.0% equity exposure for the Trust. Over the life of the Fund, the FTSE Global Media Index is actually down, by 0.5%, reflecting the severity of the bear market for media assets since the collapse of the TMT boom. In 2006, though, the sector is up c11.0%, outperforming the MSCI World Equity Index. We hope this marks the beginning of a sustained phase of relative and absolute performance from media companies. If this is to be so, it will be because, in our view, other investors remain traumatised by the excesses of 7 years ago, but now underestimate the growth opportunity presented to strong media franchises. We look for accelerating earnings growth from such franchises in the Fund - Disney, Dow Jones, eBay, Elsevier, Nintendo, Pearson, Reuters, Sage and Wolters Kluwer - all major holdings. In addition, we are particularly enthusiastic about the access we have in the Fund to rare sporting franchises - rare in the sense that there are few quoted companies that offer participation in the escalating value of sports rights - Celtic Football Club, International Speedway and World Wrestling Entertainment. LTIT shareholders will know that the following stocks are also held directly in the Company - Dow Jones, eBay, Nintendo, Pearson, Reed Elsevier and Reuters. Recent performance from some of these is encouraging for our thesis, we think. Reed, in particular, appears to have broken upwards out of a multi-year share price consolidation, as the company benefits from the shift of its revenues away from paper to online. Reuters, too, has seen a share rally, as investors acknowledge the strategic strengths of this company and recognise that revenue growth from current levels is likely to be highly accretive for owners. Nintendo is up over 65.0% in 2006 and now represents c8.5% of 'look through' portfolio value, once the holdings in it in both the Lindsell Train funds are accounted for. Apple saw its shares rise from $10 in 2004 to $80 today, as investors came to appreciate the importance of the iPod to its business. We believe that Nintendo offers a similar opportunity with its new consoles, DS and Wii and that this year's gains are just the start. Fund Manager Launch Date Denomination Nick Train 22 Jan 2001 GBP Year End Dividend Benchmark 31st Mar Ex Date: June The annual average yield on the 21/2% Payment: August Consolidated Loan Stock. The Board Management Fees Registered Address Rhoddy Swire Standard Fee: 0.65% Lindsell Train Investment Trust Donald Adamson Performance Fee: 10% of annual increase Springfield Lodge, Colchester Road Dominic Caldecott in the share price, plus dividend, Chelmsford Michael Lindsell above the gross annual yield of the 2 ESSEX CM2 5PW Michael Mackenzie 1/2% Consolidated Loan Stock. ISIN Secretary Listing GB0031977944 Phoenix Administration Services Limited London Stock Exchange Bloomberg LTI LN Disclaimer Risk Warning This factsheet is intended for use by shareholders of the Lindsell Train Investment Trust ('LTIT') and/or persons who are authorised by the UK Financial Services Authority or those who are permitted to receive such information in the UK. Any opinion expressed whether in general or both on the performance of individual securities and in a wider economic context represents Lindsell Train's views at the time of preparation. They are subject to change without notice and should not be construed as investment advice or investment recommendation. Past performance is not a guide to future performance and may not be repeated. The value of investments and income from them can go down as well as up and you may not get back the amount originally invested. Lindsell Train Investment Trust plc is an investment trust company listed on the London Stock Exchange. Investment trusts have the ability to borrow to invest which is commonly referred to as gearing. Companies with higher gearing are subject to higher risks and therefore the investment value may change substantially. The net asset value ('NAV') per share and its performance of an investment trust may not be the same as its market share price per share and performance. Issued by Lindsell Train Limited Authorised and regulated by the Financial Services Authority 23 Oct 2006 LTL 000-040-5b Lindsell Train Limited 35 Thurloe Street, London SW7 2LQ Tel. +44 20 7225 6400 Fax. +44 20 7225 6499 enquiry@lindselltrain.com www.lindselltrain.com Lindsell Train Limited is authorised and regulated by the Financial Services Authority. This information is provided by RNS The company news service from the London Stock Exchange
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