Annual Report and Accounts

Manchester & London Inv Tst PLC 05 October 2005 Manchester & London Investment Trust plc ANNOUNCEMENT OF THE AUDITED GROUP RESULTS For the year ended 31st July 2005 Attached pages 1 - 5 Enquiries : Manchester & London Investment Trust plc B S Sheppard Tel : 0161-242-2899 Brokers : Midas Investment Management Limited M B B Sheppard Tel : 0161-228-1709 Manchester & London Investment Trust plc 5th October 2005 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 1 of 5 The Directors announce the audited figures For the year ended 31st July 2005 Consolidated Statement of Total Return (incorporating the revenue account) 2005 2004 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 4,703 4,703 - 4,298 4,298 Income (note 1) 1,184 - 1,184 1,085 43 1,128 Investment management fee (71) (132) (203) (56) (104) (160) Other expenses (198) - (198) (194) - (194) ------- -------- -------- -------- -------- -------- Return on ordinary activities before taxation 915 4,571 5,486 835 4,237 5,072 Taxation on ordinary - - - - - - activities ------- -------- -------- -------- -------- -------- Return on ordinary activities after taxation 915 4,571 5,486 835 4,237 5,072 Dividends in respect of non-equity shares (57) - (57) (57) - (57) ------- -------- -------- -------- -------- -------- Return attributable to equity shareholders 858 4,571 5,429 778 4,237 5,015 Dividends in respect of equity shares (713) - (713) (713) - (713) ------- -------- -------- -------- -------- -------- Transfer to reserves 145 4,571 4,716 65 4,237 4,302 ------- -------- -------- -------- -------- -------- Return per ordinary share (pence) Basic 11.44 60.95 72.39 10.37 56.50 66.87 ------- -------- -------- -------- -------- -------- Fully diluted 8.73 43.63 52.36 7.97 40.44 48.41 ------- -------- -------- -------- -------- -------- The revenue column of this statement is the consolidated profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. Non-equity dividends Dividends per preference share accrue at the rate of 7.6% p.a. Equity dividends Interim dividend paid per each 25p ordinary share 2.5p (2004 - 2.5p) Final divided proposed per each 25p ordinary share 7.0p (2004 - 7.0p) The ordinary dividend is payable on 30th November 2005 to shareholders on the Register at the close of business on 21st October 2005. Manchester & London Investment Trust plc 5th October 2005 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 2 of 5 Consolidated Balance Sheet At 31st July 2005 2005 2004 £'000 £'000 £'000 £'000 Fixed Assets Investments 30,274 26,401 Current Assets Debtors 64 75 Cash and short term deposits 4,191 3,316 ---------- --------- 4,255 3,391 Creditors Amounts falling due within one year (664) (640) ---------- --------- Net Current Assets 3,591 2,751 ------- --------- Net Assets 33,865 29,152 ------- --------- Capital and Reserves Called-up Share Capital 2,619 2,619 Other reserves Capital reserve - realised 19,049 18,866 Capital reserve - unrealised 9,463 5,075 Goodwill reserve (79) (79) Revenue reserve 2,816 2,671 Own shares (3) - ------- --------- Total shareholders' funds 33,865 29,152 ------- --------- Equity interests - Ordinary shares 33,121 28,408 Non-equity interests - Preference 744 744 shares ------- --------- 33,865 29,152 ------- --------- Net Asset Value per share Ordinary shares - basic 441.6p 378.8p ------- --------- Ordinary shares - fully diluted 323.2p 278.2p ------- --------- Manchester & London Investment Trust plc 5th October 2005 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 3 of 5 Consolidated Cashflow Statement For the year ended 31st July 2005 2005 2004 £'000 £'000 £'000 £'000 Operating activities Investment income received 1,008 1,083 Interest received 187 126 Investment management fees paid (189) (161) Other cash payments (191) (252) --------- --------- Net cash inflow from operating 815 796 activities Servicing of finance Preference dividend paid (57) (57) --------- --------- Net cash outflow from servicing of (57) (57) finance Financial investment Purchase of investments (9,738) (5,665) Sale of investments 10,568 3,667 --------- --------- Net cash inflow (outflow) from financial investment 830 (1,998) Financing Repayment of loan from holding company - (5,413) --------- --------- Net cash outflow from financing - (5,413) Equity dividends paid (713) (713) --------- --------- Increase (decrease) in cash 875 (7,385) --------- --------- Reconciliation of net cash flow to movement in net funds Increase (decrease) in cash in year 875 (7,385) Net funds at beginning of year 3,316 10,701 --------- --------- Net funds at end of year 4,191 3,316 --------- --------- Manchester & London Investment Trust plc 5th October 2005 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 4 of 5 Note 1 2005 2004 £'000 £'000 Income Income from investments UK dividends 992 967 --------- --------- Other income Deposit interest 192 118 --------- --------- Total income 1,184 1,085 --------- --------- The above financial information does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. The comparative financial information is based on the statutory financial statements for the year ended 31st July 2004. Those financial statements, upon which the auditor issued an unqualified opinion, have been delivered to the Registrar of Companies. Statutory financial statements for the year ended 31st July 2005 will be delivered to the Registrar. Manchester & London Investment Trust plc 5th October 2005 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 5 of 5 CHAIRMAN'S STATEMENT During the second half of the Company's financial year, the UK stock market has shown considerable and almost uninterrupted strength. Against this background and reflecting our 24.1% liquidity level at the interim stage, our overall performance for the year under review has lagged the FTSE All-Share Index by 4.5%, but during the current year we have made up nearly half this shortfall. Our year end liquidity level was 12.4%, resulting from changes in our portfolio during the second half of the financial year and outlined in the Investment Manager's Review. Corporate activity has continued to dominate the market and we have directly benefited from the cash bids for Novar and Singer & Friedlander. At the time of disposal these holdings comprised 6.5% of our portfolio. Indeed, it is part of our investment policy to be exposed to sound growth companies which we believe are likely to become bid or merger targets at some stage in the reasonably near future, such holdings being PZ Cussons, BAE Systems, Standard Chartered and Rank Group. Specific reasons for our belief that these companies are likely to be involved in consolidation are outlined in greater detail in the Investment Manager's Review. Opinions on the future course of world stock markets are dominated by the prospects for the oil price, economic performance in Far Eastern countries (principally India and China) and their influences on Western economies. In the US, interest rates are likely to continue rising (after pausing because of fears of adverse economic consequences of Hurricane Katrina), as the Federal Reserve seeks a better balance in its efforts to control consumer spending at the same time as protecting the currency. In the UK, the seemingly inexorable rise in the market is occurring against a less benign background which is clouded by the uncertainties of excessive Government expenditure, prospects of increased taxation, a severe setback in consumer spending and the mounting threat of inflation which is sucking money into the markets, aided and abetted by the stakebuilding policy of the hedge funds which are rapidly replacing the establishment institutions as the catalysts for corporate activity. Notwithstanding these uncertainties, we are reasonably confident about the prospects for stock markets in the foreseeable future, although it would not be surprising to see a fairly sharp reaction in share prices after the recent substantial rise. With just over 50% of our portfolio currently invested in 'global assets' (PZ Cussons, BAE Systems, Royal Dutch Shell and Standard Chartered), we are attaching increased importance to the superior growth being achieved by emerging economies. Inevitably, this tends to restrict the short-term prospects for growth in our dividend income and as Inland Revenue rules governing Approved Investment Trusts demand an 85% distribution ratio, this has the effect of restricting the scope for building our revenue reserves. We should also bear in mind that in 2007 the issued ordinary share capital will increase by 39.7% upon conversion of the preference shares currently in issue. Taking all these factors into account, the Directors are proposing a final dividend of 7p, making an unchanged distribution for the year of 9.5p, which will be payable on 30th November 2005 to shareholders registered on 21st October 2005. Next year we will be reporting our results under International Financial Reporting Standards. The principal impact is on presentation and disclosure and the more important changes are explained in the Directors' Report. We were sorry to lose the services of John Lee who resigned from the Board in July this year because of a potential conflict of interests; we wish him well in the future. I look forward to welcoming shareholders to our Thirty Third Annual General Meeting to be held in the Lancaster Suite, The Midland, Peter Street, Manchester M60 2DS, at 12.45pm on Thursday, 24th November 2005. P. H. A. Stanley FCA Chairman 5th October 2005 This information is provided by RNS The company news service from the London Stock Exchange

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