Interim Results
Mid Wynd Inter Inv Trust PLC
5 February 2002
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Results for the six months to 31 December 2001
5 February 2002
Interim Results showed an 8.8% fall in net asset value, representing a 1.7%
outperformance against its benchmark, the FTSE World Index expressed in sterling
terms.
Increased interim dividend to 3.60p from 3.40p.
Earnings per share for the first half-year have fallen to 3.42p as
compared to 4.25p for the six months to 31 December 2000. Lower rates of
interest on deposits have contributed to the fall, and also the timing of
the dividend and interest payments following investment switches. On an
underlying basis, however, the trend is more favourable.
• Reasons for outperformance. Performance benefited from the portfolio's
exposure to bonds and the overweight position in the UK and Europe. Stock
selection was positive in all markets except the United States. In overall
terms the outperformance came in more or less equal proportion from asset
allocation and stock selection.
Defensive Policy. Asset allocation remains defensive, with bonds and cash
amounting to 14.3% of assets. Stock selection is biased towards companies
with free cash generation, secular growth and strong finances. The
environment for corporate profits remains challenging.
The objective of the Mid Wynd International Investment Trust PLC is to achieve
capital and income growth by investing on a worldwide basis. The Trust has total
assets of £36.0m.
Mid Wynd International Investment Trust PLC is managed by Baillie Gifford & Co.,
the leading independent Edinburgh based fund management group with around £21
billion under management and advice.
- ends -
For further information please contact:
Michael MacPhee, Manager
Mid Wynd International Investment Trust PLC 0131 222 4000
Mike Lord, Director
Broadgate Marketing 020 7726 6111
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Interim Report
Over the six months to 31 December 2001 the Trust's net asset value per share
fell by 8.8% to 681.0p. Markets have endured a roller coaster ride over this
period, falling first as America fell swiftly into recession and subsequently
rallying in the aftermath of the World Trade Centre attacks as investors
contemplated on unprecedented degree of monetary easing and the prospect of
strong economic recovery normally associated with it. The US Federal Reserve
board has cut interest rates eleven times in 2001, and central banks elsewhere
have been responding in similar if less emphatic manner to deteriorating
circumstances in their own economies. The fall in our net asset value is
somewhat better than the 10.5% fall in the FTSE World Index (in sterling terms)
over the period, with some of the initial outperformance lost during October and
November, but a good recovery in December.
As recession has spread to most parts of the globe this year, the principal
casualty has been corporate profits and not the consumer. This follows some
years of extensive over-investment by companies rather than excess consumption
by individuals, which has, in the typical post-war recession, led to policy
tightening moves by the authorities. Our rather defensive distribution of assets
stems from a fear that corporate capital spending will remain muted. Companies
are struggling with weak cash flows, poor returns on past investment and
generalized oversupply. At the same time it is plausible that demand for their
products may gradually deteriorate even in the face of low interest rates as
unemployment rises and debts are paid down. This is an unwelcome and atypical
combination; in 'normal' recessions falling interest rates have released pent-up
consumer demand and allowed supply and demand to move back into balance. There
is a worrying and persistent lack of pricing power across the corporate world.
We have found ourselves bemused, therefore, by the extent to which share prices
have tended to express the hope that the first and worst hit sectors will also
rebound first and most powerfully, and are instead biased towards companies with
free cash generation, secular growth and strong finances.
Earnings for the first half have fallen to 3.42p (2000 - 4.25p) per share. The
main factor in this has been the timing of dividend and interest payments
following investment switches, but lower rates of interest on deposits have also
contributed. On an underlying basis, however, the trend is more favourable and
the Board therefore feels justified in paying an increased interim dividend of
3.60p per share (2000 - 3.40p per share).
By order of the Board
Baillie Gifford & Co.
4 February 2002
The following is an interim statement for the six months ended 31 December 2001
which has been neither reviewed nor audited by the auditors. This statement is
being printed and will be sent to all shareholders on 15 February 2002. Copies
will be available for inspection at the Registered Office of the Company or may
be obtained on request from the Managers and Secretaries after that date.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
STATEMENT OF TOTAL RETURN
(unaudited and incorporating the revenue account*)
for the six months ended for the six months ended for the year ended
31 December 2001 31 December 2000 30 June 2001
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Realised (losses)/gains
on investments - (620) (620) - 2,057 2,057 - 2,504 2,504
Unrealised losses on - (2,773) (2,773) - (2,761) (2,761) - (3,971) (3,971)
investments
Currency gains (note 3) - 151 151 - 44 44 - 83 83
Income (note 4) 319 - 319 392 - 392 849 - 849
Investment management fee (44) (44) (88) (54) (54) (108) (105) (105) (210)
Other administrative (69) - (69) (74) - (74) (130) - (130)
expenses
Net return before finance
costs and taxation 206 (3,286) (3,080) 264 (714) (450) 614 (1,489) (875)
Finance costs of (4) (4) (8) (6) (6) (12) (11) (11) (22)
borrowings
Return on ordinary
activities before 202 (3,290) (3,088) 258 (720) (462) 603 (1,500) (897)
taxation
Tax on ordinary (30) 13 (17) (44) 17 (27) (119) 35 (84)
activities
Return on ordinary
activities after taxation 172 (3,277) (3,105) 214 (703) (489) 484 (1,465) (981)
Dividends in respect of
equity shares (181) - (181) (171) - (171) (427) - (427)
Transfer (from)/to (9) (3,277) (3,286) 43 (703) (660) 57 (1,465) (1,408)
reserves
Return per ordinary share 3.42p (65.18p) (61.76p) 4.25p (13.98p) (9.73p) 9.64p (29.13p) (19.49p)
(note 5)
Dividend per ordinary
share (note 6) 3.60p 3.40p 8.50p
* The revenue column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED BALANCE SHEET
at 31 December 2001
(unaudited)
31 December 2001 31 December 2000 30 June
2001
£'000 £'000 £'000
NET ASSETS
Fixed asset investments 35,484 37,982 38,362
Net liquid assets 535 2,048 1,100
Total assets (before deduction of loan) 36,019 40,030 39,462
Bank loan (note 2) (1,782) (1,759) (1,939)
34,237 38,271 37,523
CAPITAL AND RESERVES
Called-up share capital 1,257 1,257 1,257
Capital reserves 32,444 36,483 35,721
Revenue reserve 536 531 545
EQUITY SHAREHOLDERS' FUNDS 34,237 38,271 37,523
NET ASSET VALUE PER ORDINARY SHARE 681.0p 761.2p 746.3p
Ordinary shares in issue 5,027,766 5,027,766 5,027,766
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
Six months to Six months to Year to
31 December 2001 31 December 2000 30 June 2001
£'000 £'000 £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 55 193 475
NET CASH OUTFLOW FROM SERVICING OF FINANCE (8) (14) (31)
FINANCIAL INVESTMENT
Acquisitions of investments (8,979) (13,238) (20,714)
Disposals of investments 8,408 12,091 18,249
Realised currency loss (6) (70) (87)
NET CASH OUTFLOW FROM FINANCIAL INVESTMENT
(577) (1,217) (2,552)
EQUITY DIVIDENDS PAID (256) (251) (422)
NET CASH OUTFLOW BEFORE FINANCING (786) (1,289) (2,530)
FINANCING
Loans repaid - - (1,476)
Loans drawn down - - 1,997
Realised currency loss on multi-currency loans - - (285)
NET CASH INFLOW FROM FINANCING - - 236
DECREASE IN CASH (786) (1,289) (2,294)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
NET (DEBT)/FUNDS
Decrease in cash in the period (786) (1,289) (2,294)
Cash used to repay bank loans - - (236)
Exchange movement 157 114 170
MOVEMENT IN NET DEBT IN THE PERIOD (629) (1,175) (2,360)
NET (DEBT)/FUNDS AT 1 JULY (661) 1,699 1,699
NET (DEBT)/FUNDS AT 31 DECEMBER/30 JUNE (1,290) 524 (661)
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
TWENTY LARGEST EQUITY HOLDINGS
at 31 December 2001
Business
Market value % of total
Name
£'000 assets
* Philip Morris Tobacco, food and beer 1,140 3.2
* Freddie Mac Mortgages 930 2.6
* Golden West Financial Savings and loans 736 2.0
* Pfizer Pharmaceuticals 712 2.0
GlaxoSmithKline Pharmaceuticals 703 2.0
+ National Toll Roads Toll bridge operator 593 1.6
* TMP Worldwide Internet recruitment 576 1.6
* Walgreen Pharmacy chain 564 1.6
* Amerada Hess Integrated oil 558 1.5
* Marsh & McLennan Insurance and fund management 539 1.5
Vodafone Mobile telecommunications services 486 1.3
* Total Fina Elf Integrated oil 469 1.3
Imperial Tobacco Tobacco 453 1.3
BP International oil 441 1.2
* State Street Banking 431 1.2
* AOL Time Warner Media and entertainment 397 1.1
* Swiss Re Reinsurance 395 1.1
* First Data Transaction processing 393 1.1
* Omnicom Advertising agency 374 1.0
* DST Systems Mutual fund computer services 343 1.0
11,233 31.2
* primary listing outwith the UK
+ unlisted security
DISTRIBUTION OF ASSETS
at 31 December 2001
(unaudited)
31 December 2001 31 December 2000 30 June 2001
% % %
Equities: United Kingdom 17.1 18.3 16.1
Continental Europe 20.2 22.2 20.1
North America 34.6 32.8 35.0
Latin America 2.6 2.6 3.1
Japan 7.9 6.2 9.0
Asia Pacific 3.3 2.5 3.1
Total equities 85.7 84.6 86.4
United Kingdom bonds 4.9 4.2 3.9
Continental European bonds 7.9 0.2 0.4
North American bonds - 5.9 6.5
Net liquid assets 1.5 5.1 2.8
Total assets (before deduction of bank 100.0 100.0 100.0
loan)
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
NOTES
1. The financial statements for the six months to 31 December 2001 have been
prepared on the basis of the accounting policies set out in the Company's
Annual Financial Statements at 30 June 2001.
The Interim Report was approved by the Board on 4 February 2002.
2. A one year Yen loan has been arranged with The Bank of New York Europe
Limited. The loan expires on 6 February 2002 and it is intended to renew
this loan. At 31 December 2001 and 30 June 2001 there were outstanding
drawings of Y340 million. At 31 December 2000 there were outstanding
drawings of Y300 million under a three year facility with The Royal Bank
of Scotland plc.
31 December 2001 31 December 2000 30 June
2001
£'000 £'000 £'000
3. Currency gains/(losses)
Realised exchange differences (6) (70) (372)
Movement in unrealised exchange differences on Yen loan 157 114 455
151 44 83
4. Income
Income from investments and interest receivable 319 392 849
5. Return per ordinary share
Revenue return 172 214 484
Capital return (3,277) (703) (1,465)
Return per ordinary share is based on the above totals of revenue and
capital and on 5,027,766 ordinary shares, being the number of ordinary
shares in issue throughout each period.
6. The interim dividend will be paid on 8 April 2002 to all shareholders on
the register at the close of business on 15 March 2002.
7. The financial information for the year ended 30 June 2001 has been
extracted from the full accounts which have been filed with the Registrar
of Companies and which contain an unqualified Auditors' Report.
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