Half Yearly Report

RNS Number : 5357Q

Mid Wynd Inter Inv Trust PLC

29 February 2016

Mid Wynd International Investment Trust plc (the 'Company')

Half-Yearly Report (unaudited) for the six months ended 31 December 2015

This announcement contains regulated information

Chairman's statement

Performance

Over the six months to 31 December 2015 the Company's net asset value increased by 4.3 per cent to 336.61 pence per share and its share price increased by 3.3 per cent to 340.50 pence per share. This compares favourably with the capital return of 0.6 per cent from the MSCI All Country World Index.

The net asset value total return for the period, which is based on the combination of capital appreciation and dividends (assuming dividends are re-invested), was 5.1 per cent, compared to the total return of 1.5 per cent produced by the MSCI All Country World Index.

It is also pleasing to report further growth in shareholders' funds, with the Company's net assets reaching £91.5 million at the end of the reporting period. That represents an increase of 46 per cent from the £62.8 million recorded at 30 June 2014, the first financial year end following Artemis' appointment as Investment Manager and the point at which the majority of the shares from the Baillie Gifford savings schemes had been bought back. This growth has arisen through a combination of good investment performance, the sale of shares from treasury and the issue of new shares. An overview of the performance of the portfolio is set out in the Investment Manager's review that follows. Further details regarding the Company's share capital are provided below.

Revenue account and dividend

For the six months ended 31 December 2015 the Company had a revenue return of 2.01 pence per share and an interim dividend of 1.65 pence per share (2015: 1.35 pence per share) will be paid on 1 April 2016 to those shareholders on the register on 11 March 2016.

The increase in the interim dividend over last year's payment reflects a combination of both the rebalancing of the split of the payments between the interim and final dividends, with a greater proportion now being paid at the interim stage, and the Board's commitment to grow the Company's dividend.

Share capital

The Company's shares have remained in demand, resulting in the share price trading at a premium to net asset value for most of the period. Consequently the remaining 1,825,321 shares held in treasury were sold at a premium to the prevailing net asset value, raising £6.0 million for the Company.

The Company has been selected as the rollover option for the reconstruction and winding up of Drumeldrie Investments Limited ('Drumeldrie'), a private investment company. This will result in approximately £4.1 million of assets being transferred to the Company in exchange for the issue of new shares. It is expected to be carried out in four equal instalments, the first of which was completed on 22 December 2015. This exchange was done at the Company's prevailing net asset value and resulted in the issue of 311,630 new shares. As all of the Company's costs in respect of its participation in the transaction are being paid by Drumeldrie there will be no dilution of existing shareholders' interests.

Since the end of the period, a further 500,000 new shares have been issued to meet market demand for the Company's shares, raising a further £1.6 million.

Presentation by the Investment Manager

As the Company's annual general meeting is held in Edinburgh, I am pleased to offer shareholders an opportunity to attend a presentation from the Investment Manager in London. It will take place at 10.00 a.m. on Wednesday, 13 April 2016 at the offices of Artemis Fund Managers Limited: Cassini House, 57 St James's Street, London SW1A 1LD. It will include an overview of the Investment Manager's approach to managing the Company's portfolio and a summary of recent performance. There will also be an opportunity to put questions to the Investment Manager. If you plan to attend, I would be grateful if you could confirm by e-mailing me at richard.burns@artemisfunds.com or calling the Company Secretary on 0800 092 2051, by Friday, 1 April 2016.

Common Reporting Standard

With effect from 1 January 2016, new tax legislation has been introduced in the UK which requires the Company to report details of certain overseas shareholders to HM Revenue & Customs. Some shareholders may, in consequence, be contacted by the Registrar for information regarding their tax residence.

Outlook

Global markets have fallen since the end of the reporting period, with the largest falls having occurred in Japan and China, as concerns persist over the strength of their economies. The recent increase in interest rates in the United States, and the continued weakness in commodity prices, has added to the headwinds facing the global economy and has led to an expectation that global economic growth will be slower than had been anticipated.

While declines in markets affect short-term performance, the Investment Manager's approach is to look for businesses with strong market positions and balance sheets, operating in sectors with attractive growth prospects in the medium- to long-term. This approach aims to provide a degree of protection in challenging economic and market conditions while generating capital and income growth for shareholders over the longer term. Although short-term fluctuations in markets are likely to persist, we hope that this approach will result in continued growth in shareholders' funds over the longer term.

Keep up-to-date…

Shareholders can keep up to date with developments between formal reports by visiting midwynd.co.uk, where you will find information on the Company and a factsheet which is updated monthly. In addition, the Board is always keen to hear from shareholders. Should you wish to, you can e-mail me at richard.burns@artemisfunds.com.

Richard Burns

Chairman

29 February 2016

Investment Manager's review

Review of the period

The last six months have been a challenging period for global equity markets. Ahead of a rise in interest rates in the US, growth in emerging markets slowed. Commodity producing economies such as Russia, South Africa and Brazil saw sharp falls in their currencies and many are now in recession. Emerging markets now account for nearly half of global GDP - in 2000 their share was just over 20 per cent. Thus, slowing demand in emerging markets has also slowed growth in developed markets. Yet the US economy still seems to have grown by over 2 per cent in 2015, a perfectly healthy background for well-positioned businesses to prosper.

Despite the MSCI All Country World Index only rising by 1.5 per cent over the last six months, the net asset value of the Company increased by 5.1 per cent. Most of this outperformance can be attributed to solid underlying growth from the companies which make up the core of the portfolio.

Index return	1.5%
Contributors:
Active return	4.5%
Gearing	0.1%
Share issues	0.1%
Other expenses	(0.1)%
Management fees	(0.3)%
Currency	(0.7)%
Net asset value total return	5.1%
Movement in premium to net asset value	(1.0)%
Share price total return	4.1%

Five largest stock contributors

Company	Theme	Contribution (%)
Amazon.com	Online Services	1.0
Alphabet	Online Services	0.7
Adidas	Retiree Spending Power	0.6
Facebook	Online Services	0.5
Hypermarcas	Emerging Market Consumer	0.5

Five largest stock detractors

Company	Theme	Contribution (%)
Time Warner	Media Content	(0.4)
Spectra Energy	Low Carbon World	(0.4)
China Merchants Holdings (International)	Emerging Market Consumer	(0.3)
Grupo Televisa	Media Content	(0.3)
Rakuten	Online Services	(0.2)

Our investment process

Our aim is to identify areas of commercial growth around the world and invest in companies that should profit from that growth. We select high-quality businesses with records of profitability and high cash generation. We prefer companies with strong balance sheets which are protected by established barriers to entry. Such companies sometimes lag equity markets during a vigorous recovery but tend to protect capital well when economic conditions become more testing. We have found this investment approach gives us a stable framework to deliver consistent returns to investors.

Current investment themes

Online Services (17.6 per cent of investments)

Our 'mobile data' theme is focused on the companies which now dominate the provision of certain online services: Amazon.com - retail; Alphabet (the company formerly known as Google) - internet searches; Priceline Group (owner of booking.com); and TripAdvisor - travel. We only invest in proven business models. This may mean we are late to invest in these companies - but it also means we avoid many of the failures in this arena. Many of the Company's holdings in this theme performed well over the last six months, most showing significantly higher fundamental growth than the market had anticipated.

Emerging Market Consumer (15.0 per cent of investments) and Frontier Investments (0.7 per cent of investments)

As outlined in the annual report, we have tried to ensure our exposure to emerging markets is conservative amid the current re-adjustment. This worked well with a positive contribution to the Company's performance coming from businesses that are quoted in developed markets but whose growth comes from consumers in emerging markets. For instance Essilor International, the world leader in lenses, has seen little slowdown in its businesses in emerging markets, despite demand falling generally.

High Quality Assets (13.2 per cent of investments)

This part of the portfolio contains companies selected for their discounts to asset value or for their ability to provide yield. Returns from European property companies were helpful over the reporting period. As interest rates rise in the US, we hope to see higher yields becoming available in good quality quoted equities. Were that to happen we would increase holdings in this part of the portfolio and so further enhance the Company's prospects for long-term dividend growth.

Healthcare Costs (13.1 per cent of investments)

We trimmed our exposure to healthcare in the autumn, especially as it became clear that some generic drug manufacturers had been trying to raise prices artificially. Our focus is on companies which help healthcare providers to reduce costs, so we are particularly wary of those who set themselves against governments with stretched healthcare budgets. We sold both Endo Pharmaceutical and Allergan, leaving our main exposure to pharmaceutical wholesalers and medical equipment companies.

Tourism (10.5 per cent of investments)

This is a new theme for the Company. The number of tourists has risen steadily over the last few decades, rising by 4 per cent per annum. This has been led by the growing number of holidaymakers from emerging markets - some countries, such as China, only recently began issuing passports to its citizens. As part of this theme, we have invested in airports in Australia, China and Spain. We have also invested in Dufry, the world's largest duty free shopping company.

Low Carbon World (8.7 per cent of investments)

We sold most of our investments in the oil sector in the summer of 2014. Now we have developed a new theme which aims to benefit from regulatory efforts to reduce emissions of carbon dioxide. The recent agreements on climate change in Paris showed the emergence of a global consensus on the need to reduce the use of coal-fired power stations in favour of renewable and gas-fired power. These changes require significant investment and regulators are allowing attractive returns on this new capital expenditure. The correlation between the movements of share prices of these utility-type investments and the high growth stocks we hold in themes such as 'Online Services' tends to be low.

Retiree Spending Power (8.0 per cent of investments)

This theme again performed well, especially our sporting equipment companies. While many spent this period worrying about China, Nike saw a 24 per cent growth in its sales in the country during the quarter to 30 November 2015.

Media Content (6.9 per cent of investments)

This was a negative contributor to the Company's performance during the period. Markets have become nervous that consumers can now use internet streams to watch television so will cancel their subscriptions to satellite and cable TV companies. Even if television is consumed (and paid for) in different ways, the amount of programming being 'consumed' seems still to be rising steadily. The success of Star Wars: The Force Awakens showed that one of our holdings, Walt Disney, can break records in ticket sales and that merchandising can substantially raise overall investment returns. We therefore believe the market's current caution towards this sector is overdone.

Scientific Equipment (6.3 per cent of investments)

Our investments in companies which make scientific and testing equipment are seeing steady growth in demand from the pharmaceutical industry, university laboratories and companies which test food quality. They have performed very well over the last six months.

Thematic attribution

Theme	Contribution (%)
Online Services	2.2
Retiree Spending Power	1.2
Emerging Market Consumer	0.8
Scientific Equipment	0.8
Healthcare Costs	0.6
Low Carbon World	0.5
High Quality Assets	0.4
Tourism	0.3
Frontier Investments	(0.2)
Media Content	(0.6)

Regional attribution

Region	Contribution (%)
North America	3.9
Europe	1.8
Japan	0.5
UK	0.3
Developed Asia	(0.2)
Emerging	(0.3)

Outlook

Over the last six months markets - and market sentiment - have been volatile. In contrast, the majority of our investments have continued to perform as expected. The coming year may well see some companies lowering their growth forecasts. Furthermore, equity valuations are quite high. We believe, however, that the companies in our portfolio have invested wisely for the future; a pleasing number will bring new products to market in 2016 or have clear plans to raise shareholder returns.

It would not surprise us if markets remain volatile. The Company's portfolio, however, is made up of high-quality businesses in growth industries. We believe that over the medium-to long-term these investments will continue to produce healthy returns for shareholders.

Simon Edelsten, Alex Illingworth &

Rosanna Burcheri

Fund managers

Responsibility statement of the Directors in respect of the Half-Yearly Financial Report

The Directors confirm that to the best of their knowledge, in respect of the Half-Yearly Financial Report for the six months ended 31 December 2015:

• the condensed set of financial statements has been prepared in accordance with Financial reporting Standard ('FRS') 104: 'Interim Financial Reporting';

• having considered the expected cash flows and operational costs of the Company for the 18 months from the period end, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the going concern basis of accounting continues to be used in the preparation of the Half-Yearly Financial Report;

• the Chairman's statement to shareholders and Investment Manager's review includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.

The Half-Yearly Financial Report for the six months ended 31 December 2015 was approved by the Board and the above responsibility statement has been signed on its behalf by:

Richard Burns

Chairman

29 February 2016

Condensed income statement

	For the six months ended 31 December 2015 (unaudited)			For the six months ended 31 December 2014 (unaudited)			For the year ended 30 June 2015 (audited)
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	-	4,298	4,298	-	6,703	6,703	-	9,645	9,645
Currency (losses)/gains	-	(293)	(293)	-	53	53	-	270	270
Income	760	-	760	565	-	565	1,405	-	1,405
Investment management fee	(53)	(160)	(213)	(41)	(123)	(164)	(91)	(273)	(364)
Other administrative expenses	(103)	(10)	(113)	(121)	(8)	(129)	(216)	(39)	(255)
Net return before finance costs and taxation	604	3,835	4,439	403	6,625	7,028	1,098	9,603	10,701
Finance costs of borrowings	(9)	(27)	(36)	(16)	(48)	(64)	(27)	(79)	(106)
Net return on ordinary activities before taxation	595	3,808	4,403	387	6,577	6,964	1,071	9,524	10,595
Tax on ordinary activities	(79)	-	(79)	(38)	-	(38)	(111)	-	(111)
Net return on ordinary activities after taxation	516	3,808	4,324	349	6,577	6,926	960	9,524	10,484
Net return per ordinary share	2.01p	14.83p	16.84p	1.56p	29.43p	30.99p	4.13p	40.95p	45.08p

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

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

The Company has no recognised gains and losses other than those shown above and therefore no separate Statement of Comprehensive Income has been presented.

Condensed balance sheet

	As at 31 December 2015 (unaudited) £'000	As at 31 December 2014 (unaudited) £'000	As at 30 June 2015 (audited) £'000
Fixed assets
Investments held at fair value through profit or loss	89,930	74,491	79,135
Current assets
Debtors	193	1,421	1,992
Cash and cash equivalents	6,811	2,482	5,460
	7,004	3,903	7,452
Creditors
Amounts falling due within one year	(5,459)	(5,159)	(5,746)
Net current assets / (liabilities)	1,545	(1,256)	1,706
Total net assets	91,475	73,235	80,841
Capital and reserves
Called up share capital	1,359	1,343	1,343
Capital redemption reserve	16	16	16
Share premium	8,739	5,698	6,650
Capital reserve	79,840	64,782	71,146
Revenue reserve	1,521	1,396	1,686
Shareholders' funds	91,475	73,235	80,841
Net asset value per ordinary share	336.61p	308.12p	322,87p

Condensed statement of changes in equity

	For the six months ended 31 December 2015 (unaudited)
		Capital
	Share	redemption	Share	Capital	Revenue	Shareholders'
	capital	reserve	premium	reserve^{1, 2}	reserve²	funds
	£'000	£'000	£'000	£'000	£'000	£'000
Shareholders' funds at 1 July 2015	1,343	16	6,650	71,146	1,686	80,841
Net return on ordinary activities after taxation	-	-	-	3,808	516	4,324
Issue of new shares	16	-	1,010	-	-	1,026
Issue of shares from treasury	-	-	1,079	4,886	-	5,965
Dividends paid	-	-	-	-	(681)	(681)
Shareholders' funds at 31 December 2015	1,359	16	8,739	79,840	1,521	91,475

	For the six months ended 31 December 2014 (unaudited)
		Capital
	Share	redemption	Share		Capital	Revenue	Shareholders'
	capital	reserve	premium		reserve^{1, 2}	reserve²	funds
	£'000	£'000	£'000		£'000	£'000	£'000
Shareholders' funds at 1 July 2014	1,343	16	4,983		54,904	1,596	62,842
Net return on ordinary activities after taxation	-	-	-		6,577	349	6,926
Issue of shares from treasury	-	-	715		4,839	-	5,554
Repurchase of shares into treasury	-	-	-		(1,538)	-	(1,538)
Dividends paid	-	-	-	-		(549)	(549)
Shareholders' funds at 31 December 2014	1,343	16	5,698		64,782	1,396	73,235

	For the six months ended 30 June 2015 (audited)
		Capital
	Share	redemption	Share	Capital	Revenue	Shareholders'
	capital	reserve	premium	reserve^{1, 2}	reserve²	funds
	£'000	£'000	£'000	£'000	£'000	£'000
Shareholders' funds at 1 July 2014	1,343	16	4,983	54,904	1,596	62,842
Net return on ordinary activities after taxation	-	-	-	9,524	960	10,484
Issue of shares from treasury	-	-	1,667	8,332	-	9,999
Repurchase of shares into treasury	-	-	-	(1,614)	-	(1,614)
Dividends paid	-	-	-	-	(870)	(870)
Shareholders' funds at 30 June 2015	1,343	16	6,650	71,146	1,686	80,841

¹ Capital reserve as at 31 December 2015 includes unrealised gains of £6,400,000 (31 December 2014: gains of £6,234,000; 30 June 2015: gains of £2,004,000).

² These reserves form the distributable reserves of the Company.

Condensed statement of cash flows

	For the six	For the six	For the
	months ended	months ended	year ended
	31 December 2015	31 December 2014	30 June 2015
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Operating activities
Profit before tax	4,403	6,964	10,595
Interest payable	36	64	106
Gains on investments	(4,298)	(6,703)	(9,645)
Currency losses/(gains)	293	(53)	(270)
(Increase)/decrease in other debtors	(51)	47	32
Increase/(decrease) in other creditors	9	(47)	(15)
Net cash inflow from operating
activities before interest and tax	392	272	803
Interest paid	(36)	(64)	(106)
Irrecoverable overseas tax suffered	(79)	(38)	(111)
Net cash inflow from operating activities	277	170	586
Investing activities
Purchase of investments	(48,806)	(47,703)	(114,199)
Sale of investments	43,553	45,273	110,287
Realised currency gains/(losses)	-	(23)	6
Net cash outflow from investing activities	(5,253)	(2,453)	(3,906)
Financing activities
Issue of shares from treasury	5,965	5,554	9,999
Issue of new shares	1,026	-	-
Dividends paid	(681)	(549)	(870)
Repurchase of shares into treasury	-	(1,530)	(1,621)
Net cash inflow from financing activities	6,310	3,475	7,508
Net increase in cash and cash equivalents	1,334	1,192	4,188
Unrealised currency gains/(losses)
on cash and cash equivalents	17	2	(16)
Cash and cash equivalents at the
start of the period	5,460	1,288	1,288
Cash and cash equivalents at the
end of the period	6,811	2,482	5,460

Notes to the Half-Yearly Financial Report

1. Accounting policies

The condensed financial statements for the six months ended 31 December 2015 have been prepared in accordance with the Company's accounting policies as set out in the Annual Financial Report for the year ended 30 June 2015 and are presented in accordance with the Companies Act 2006 (the 'Act') and the requirements of the Statement of Recommended Practice ('SORP') 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014. The updated SORP reflects the changes arising from the adoption of FRS 102, which the Company is required to comply with for the first time for the year ending 30 June 2016. The Company has also adopted the requirements of FRS 104 for the first time in the production of this Half-Yearly Financial Report.

Aside from the additional disclosure of the fair value of the Company's investments below and a change to the presentation of the condensed statement of cash flows, no other material changes have arisen from the adoption of the new standards above.

The financial information contained within this Half-Yearly Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Act. The financial information for the year ended 30 June 2015 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under sections 498(2) or (3) of the Act.

2. Return per ordinary share

The net return per ordinary share has been calculated based on 25,675,244 (six months ended 31 December 2014: 22,351,284; year ended 30 June 2015: 23,254,943) ordinary shares, being the weighted average number of ordinary shares in issue during each period.

3. Dividends

	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
	2015	2014	2015
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Amounts recognised as dividends in the period:
Final dividend for the year ended 30 June 2015 of 2.65p, paid 6 November 2015 (2014: 2.50p, paid 31 October 2014)	681	549	549
Interim dividend for the year ended 30 June 2015 of 1.35p, paid 10 April 2015	-	-	321
	681	549	870
Amounts paid and payable in respect of the period:
Interim dividend for the year ending 30 June 2016 of 1.65p* (2015: 1.35p, paid 10 April 2015)	448	321	321
Final dividend for the year ended 30 June 2015 of 2.65p, paid 6 November 2015	-	-	664
	448	321	985

*The interim dividend of 1.65 pence per share was declared after 31 December 2015 and has therefore not been included as a liability in the balance sheet at this date. This dividend will be paid on 1 April 2016 to shareholders on the register at the close of business on 11 March 2016. The ex dividend date is 10 March 2016. The Company's Registrar operates a dividend reinvestment plan and the final date for elections for this dividend is 18 March 2016.

All of the dividends in the table above have been (or will be, as applicable) paid from the Company's Revenue Reserve.

4. Borrowing facilities

On 19 February 2015, the Company entered into a three-year US$16 million revolving credit facility with Scotiabank, of which US$7.3 million (£4.9 million) was drawn down at 31 December 2015 (30 June 2015: US$7.3 million (£4.6 million)). This is recognised in amounts falling due within one year in the balance sheet. Interest is charged at variable rates equivalent to 0.9 per cent over the US dollar London interbank market rate. The interest rate as at 31 December 2015 was 1.30210 per cent (30 June 2015: 1.08675 per cent).

Included in amounts falling due within one year in the balance sheet as at 31 December 2014 are the £2.5 million and €3.0 million fixed rate loan facilities which matured on 20 February 2015.

5. Fair value of financial assets and financial liabilities

The fair value analysis of investments held at fair value at the period end is as follows:

	At		At		At
	31 December 2015		31 December 2014		30 June 2015
	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
	£'000	£'000	£'000	£'000	£'000	£'000
Quoted prices for identical instruments in active markets	89,858	-	74,261	-	79,090	-
Valuation techniques using observable market data	-	-	50	-	-	(39)
Valuation techniques using non-observable data	72	-	180	-	84	-
Total value of investments	89,930	-	74,491	-	79,174	(39)

The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the balance sheet.

Given the fixed term nature of the Company's loan facilities that expired on 20 February 2015, they were included in the Condensed Balance Sheet at their book value. As at 31 December 2014 the book value of these loans was £4,828,000 and the fair value was £4,836,000.

6. Share capital

	At 31 December	At 31 December	At 30 June
	2015	2014	2015
	(unaudited)	(unaudited)	(audited)

	No. of shares	No. of shares	No. of shares
Allotted, called up and fully paid (ordinary shares of 5p each)	27,175,460	23,768,630	25,038,509
Ordinary shares held in treasury	-	3,095,200	1,825,321
	27,175,460	26,863,830	26,863,830

In the six months ended 31 December 2015 no ordinary shares were bought back and held in treasury (six months ended 31 December 2014: 554,440 ordinary shares were purchased at a total cost of £1,538,000; year ended 30 June 2015: 577,440 ordinary shares were purchased at a total cost of £1,614,000).

During the six months to 31 December 2015 a total of 1,825,321 ordinary shares were sold from treasury for total proceeds of £5,965,000 (six months ended 31 December 2014: 1,822,609 ordinary shares sold for total proceeds of £5,554,000; year ended 30 June 2015: 3,115,488 ordinary shares sold for total proceeds of £9,999,000). The Company also alloted 311,630 new ordinary shares to Drumeldrie Investments Limited during the period for £1,026,000 (six months ended 31 December 2014 and year ended 30 June 2015: nil).

7. Related party transactions

There were no related party transactions during the period.

8. Transactions with the Investment Manager

The investment management fee payable to Artemis Fund Managers Limited for the six months ended 31 December 2015 was £213,000 (six months ended 31 December 2014: £164,000; year ended 30 June 2015: £364,000) of which £111,000 was outstanding at the period end (31 December 2014: £85,000; 30 June 2015: £104,000).

9. Principal risks and uncertainties

Pursuant to DTR 4.2.7R of the Disclosure and Transparency Rules, the principal risks faced by the Company include general market risk, regulatory, operational, financial and gearing risks.

These risks, which have not materially changed since the annual financial report for the year ended 30 June 2015, and the way in which they are managed, are described in more detail in the Annual Financial Report which is available at midwynd.co.uk.