Final Results

Manchester & London Inv Tst PLC 28 September 2006 Manchester & London Investment Trust plc ANNOUNCEMENT OF THE AUDITED GROUP RESULTS For the year ended 31st July 2006 Attached pages 1 - 5 Enquiries : Manchester & London Investment Trust plc B S Sheppard Tel : 0161-228 1709 Brokers : Midas Investment Management Limited M B B Sheppard Tel : 0161-228-1709 Manchester & London Investment Trust plc 28th September 2006 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 1 of 5 The Directors Announce the Audited Figures For the year ended 31st July 2006 Consolidated Income Statement 2006 2005 (restated) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments at fair value - 2,673 2,673 - 4,763 4,763 Income (note 1) 1,084 - 1,084 1,184 - 1,184 Investment management fee (88) (165) (253) (71) (132) (203) Other operating expenses (240) (58) (298) (255) (63) (318) -------- ------- ------- -------- -------- ------ Profit before tax 756 2,450 3,206 858 4,568 5,426 Taxation - - - - - - -------- ------- ------- -------- -------- ------ Profit attributable to equity holders 756 2,450 3,206 858 4,568 5,426 ======== ======= ======= ======== ======== ====== Earnings per ordinary share (pence) Basic 10.08 32.67 42.75 11.44 60.91 72.35 ======== ======= ======= ======== ======== ====== Fully diluted 7.76 23.38 31.14 8.73 43.60 52.33 ======== ======= ======= ======== ======== ====== The total column of this statement represents the Income Statement of the Group prepared in accordance with International Financial Reporting Standards (IFRS). The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Trust Companies. All items in the above statement derive from continuing operations. Equity dividends Interim dividend paid per each 25p ordinary share 2.5p (2005 - 2.5p) Final dividend proposed per each 25p ordinary share 7.0p (2005 - 7.0p) The ordinary dividend is payable on 29th November 2006 to shareholders on the Register at the close of business on 27th October 2006. Manchester & London Investment Trust plc 28th September 2006 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 2 of 5 Consolidated Balance Sheet At 31st July 2006 2006 2005 (restated) £'000 £'000 £'000 £'000 Non-current assets Investments at fair value through profit or loss 30,444 30,182 Current Assets Receivables 111 64 Cash and cash equivalents 6,326 4,191 -------- -------- 6,437 4,255 Current Liabilities Trade and other payables (87) (139) -------- -------- Net Current Assets 6,350 4,116 ------- ------- Total assets less current liabilities 36,794 34,298 Non-current liabilities Preference shares (687) (687) ------- ------- Net Assets 36,107 33,611 ======= ======= Equity attributable to equity holders Ordinary share capital 1,875 1,875 Own shares - (3) Equity conversion reserve 57 57 Other reserves Capital reserve - realised 22,033 18,966 Capital reserve - unrealised 8,837 9,454 Goodwill reserve (79) (79) Retained earnings 3,384 3,341 ------- ------- Total equity 36,107 33,611 ======= ======= Net Asset Value per share Ordinary shares - basic 481.4p 448.2p ======= ======= Ordinary shares - fully diluted 351.2p 327.4p ======= ======= Manchester & London Investment Trust plc 28th September 2006 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 3 of 5 Consolidated Cashflow Statement For the year ended 31st July 2006 2006 2005 (restated) £'000 £'000 £'000 £'000 Operating activities Operating profit 3,206 5,426 Gains on investments (2,673) (4,763) Financing costs 57 57 Decrease (increase) in receivables (47) 11 Increase (decrease) in payables (49) 21 -------- -------- Net cash inflow from operating activities 494 752 Investing activities Purchase of investments (11,643) (9,693) Sale of investments 14,054 10,586 -------- -------- Net cash inflow from investing activities 2,411 893 Financing activities Interest paid on borrowings (57) (57) Equity dividends paid (713) (713) -------- -------- Net cash outflow from financing (770) (770) ------- -------- Net increase in cash and cash equivalents 2,135 875 ======= ======== Net increase in cash and cash 2,135 875 equivalents Cash and cash equivalents at beginning of year 4,191 3,316 ------- -------- Cash and cash equivalents at end of year 6,326 4,191 ======= ======== Manchester & London Investment Trust plc 28th September 2006 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 4 of 5 For the year ended 31st July 2006 Note 1 2006 2005 £'000 £'000 Income Income from investments UK dividends 929 992 --------- --------- Other income Deposit interest 155 192 --------- --------- Total income 1,084 1,184 ========= ========= 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 2005. 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 2006 will be delivered to the Registrar. Manchester & London Investment Trust plc 28th September 2006 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 5 of 5 CHAIRMAN'S STATEMENT At the Company's year end on 31st July 2006, the net asset value per share was 351.2p, marginally below the 356p level at the half year end on 31st January 2006. Over this year as a whole, the net asset value rose from a restated 327.4p to 351.2p (an increase of 7.3%), which compares with a 13.6% increase from 2644.8 to 3004.3 in the FTSE All-Share Index. This underperformance reflects the cautious view of stock markets held by the Directors and our Manager over the period under review. To this extent, therefore, we have paid a price for our caution. In company with many fund managers, we continue to take a cautious view of markets which, in many respects, now seem to be governed by the sheer weight of money rather than long established investment principles. At the same time, we are not unaware of the dangerous possibility of inflation which, historically, has been a feature of asset values in countries whose economies have been subjected to an abnormal injection of liquidity. So far, the huge increase in global liquidity over the last few years has not re-aroused the spectre of inflation (despite the questionable credibility of the Consumer Price Index) because of the fall in price of numerous consumer imports from Asia. As the US remains the most important global economy, all eyes are focused on how the Federal Reserve intends to attempt a 'soft landing' in the face of a seemingly uncontrollable current account deficit, a consumer debt crisis and the prospect of a housing collapse. A controlled devaluation of the dollar would seem to be at least a partial solution but this may not be acceptable to the creditors, particularly the Chinese who have been the principal financiers of the US balance of payments debt edifice. In the meantime, interest rates continue to creep higher but hopefully, not high enough to induce recession; the high wire act will probably continue for some months and in the meantime, we can only watch the various bubbles and hope there are no bursts. Here in the UK, the FTSE All-Share Index has partially recovered the ground lost in the May/June setback, buoyed by continuing corporate activity and the presence of Private Equity and Hedge Funds; in both instances, prices being paid seem to leave little margin for error. We seem to be in uncharted financial territory and at present see no compelling reason to increase our exposure to the market, although in a world seemingly awash with cash, we are aware we may have to change tack. At the year end our portfolio remained substantially unchanged apart from the disposal of the BAE holding at a price of £4.23 per share, reasonably ahead of the current level. We also made a purchase of Gazprom, the Russian gas company which dominates the European market, taking the view that the Russian stock market is opening up to Western investment funds and will gradually achieve a re-rating. The Manager's Report sets out more detailed comments on the deployment of the Company's assets. Although not relative to the financial year under review, it would be inappropriate for me not to refer to the fund raising exercise successfully completed in August this year when the Company raised almost £11m through a placing of new ordinary shares with several institutions coupled with an offer for subscription of new shares to existing holders. The issue diluted the interest of the controlling shareholder (after adjusting for conversion of the Preference Shares) to 54.7% which has widened the shareholder base and which in turn should improve the marketability of the shares. As a result, our net assets now amount to £48m, which will not only increase the appeal of the Company to the investing public, but also allow the Board to operate a credible discount management policy. The financial statements for the year to 31st July 2006 are the first to be published under International Financial Reporting Standards (IFRS) which came into effect on 1st January 2005. As I noted in my interim statement, there are a number of presentational changes, the most significant being the treatment of dividends which are only recognised in the financial statements when the shareholders' right to receive the dividend has been established. This means that the proposed final dividend in respect of 2006 is not included as a liability in these financial statements. Our convertible preference shares, which until now have been shown as part of shareholders' funds, are now classified mainly as debt in the Balance Sheet notwithstanding the fact that this debt has since disappeared following the conversion to ordinary shares. These financial statements also include full details of the transition to IFRS to assist in explaining how the previously reported figures under UK Generally Accepted Accounting Practice have been restated to comply with IFRS. The Directors are proposing a final dividend of 7p, making an unchanged distribution for the year of 9.5p which will be payable on 29th November 2006 to shareholders registered on 27th October 2006. Holders of the new ordinary shares will not be entitled to receive the final dividend in respect of the period to 31st July 2006. The effect of the conversion of the preference shares and the injection of funds resulting from the recent issue is that the income available for distribution to shareholders during the current year is likely to be less per share than the figure for the year ended 31st July 2006. I look forward to welcoming shareholders to our Thirty Fourth Annual General Meeting to be held in the Lancaster Suite, The Midland, Peter Street, Manchester M60 2DS, at 12.45pm on Thursday 23rd November 2006. P H A Stanley Chairman 28th September 2006 This information is provided by RNS The company news service from the London Stock Exchange

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