Interim Results
Mid Wynd Inter Inv Trust PLC
08 February 2005
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Results for the six months to 31 December 2004
In the six months to 31 December 2004, the Company has outperformed its
comparative index (FTSE World Index in sterling terms). Mid Wynd's net asset
value rose by 6.5% which compares with a rise in the comparative index of 4.7%.
• Good stock-picking in America coupled with strong asset allocation helped
relative performance.
• The loss of revenue previously generated from Mid Wynd's large bond
portfolio has been offset by significant dividend growth.
• The Board has decided to maintain the interim dividend of 3.70p.
• The global economic outlook remains uncertain. Consequently, asset
allocation remains defensive with the Company holding approximately 7% net
cash.
The objective of Mid Wynd International Investment Trust PLC is to achieve
capital and income growth by investing on a worldwide basis. The Company has
total assets of £37.1m (before deduction of the bank loan of £1.6m).
Mid Wynd is managed by Baillie Gifford & Co., the Edinburgh based fund
management group with around £33 billion under management and advice.
7 February 2005
- ends -
For further information please contact:
Michael MacPhee, Manager
Mid Wynd International Investment Trust PLC 0131 275 2000
Mike Lord, Director
Broadgate Marketing 020 7726 6111
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Interim Report
During the first half of the Company's financial year net asset value rose 6.5%
compared to a 4.7% rise in the FTSE World Index. Total return was 7.8% against
5.6% for the Index.
Within this picture, rising corporate profits, though at a slowing pace, were
offset by higher oil prices, a weak dollar and prospects of higher interest
rates. American economic growth remained robust in contrast to more subdued
performance in Europe and Japan. Equity markets moved briskly higher following
the re-election of President Bush in November, but are presently lacking in
fresh impetus.
Portfolio turnover has fallen from last year's high level. Cash has accumulated
as a result of modest net sales across all geographic regions. In particular, we
reduced Japanese investments early in the period following last year's dramatic
rise in many of our smaller capitalisation biased holdings there. This has been
successful as Japanese markets have languished since our sales and the stocks we
sold have fallen in price. Asia Pacific in general and emerging markets in
particular have remained a fertile source of returns, and stock-picking in
America deserves special mention. Our European holdings detracted from
performance though European markets were strong over the period and asset
allocation there, as elsewhere, was helpful.
Overall, our large exposure to tobacco has proved beneficial, with strong
performance from Altria, Imperial Tobacco and Altadis. Healthcare has been a
more challenging area - continuing dismal performance by pharmaceutical
companies in general was offset by reasonable stock-picking in the sector.
Wellpoint, our American health insurance business, has enjoyed a strong surge in
share price following its merger with a competitor. The bad news in Europe has
come from ABB (electrical equipment), where margin progression has been at best
deferred, and L'Oreal, the global cosmetics business. Sales have struggled to
live up to long term trends for some time now and the shares have been derated.
By contrast, Essilor, our ophthalmic lens company, Atlas Copco, the Swedish
engineer and Vivendi, in media and telecoms, performed well. Our Irish holdings,
CRH (building materials), Allied Irish Banks and Jury's Doyle hotels, also all
produced good appreciation. Latin American holdings again did well - while the
share price of Petrobras rose, it remains a cheap oil company in global terms
and telecoms in the region have served us well. This has unfortunately been less
true of Vimpelcom, our Russian mobile company, which has suffered from political
interference.
Asset allocation is rather defensive, with some 7% of net cash in the portfolio
- the outlook appears not altogether benign. Company profit margins are fat
relative to history though dividend growth has picked up significantly. More
clearly than ever, though, American economic policy is running into a cul de
sac. Very low interest rates have allowed Americans to live beyond their means
in a manner which we have commented upon before and that has supported global
activity but driven imbalances in trade, financial and fiscal systems to extreme
levels. Asset price appreciation has underpinned current consumption. Stimulus
needs to come from elsewhere for this year's growth and candidates seem rather
thin on the ground. There is, more than usually, a significant gap in prospects
for companies exposed to global competition and trade versus those which are not
greatly subject to currency and competitive fluctuation. In the main we prefer
the latter.
The revenue account, suffering at the interim stage from the continued sale of
our large bond position in the first half of last year, has nonetheless
benefited from healthy dividend growth, including a significant special dividend
from Microsoft. This means that while earnings for the first half fell to 2.50p
from 2.96p, forecasts for the year to June would tend to indicate a modest
increase from last year's 8.07p. The Board has decided to maintain the interim
dividend, which will be paid on 7 April 2005 to shareholders on the register on
11 March, at last year's level of 3.70p.
By order of the Board
Baillie Gifford & Co
7 February 2005
The following is an interim statement for the six months ended 31 December 2004
which has been neither reviewed nor audited by the auditors. This statement is
being printed and will be sent to all shareholders on 14 February 2005. 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 2004 31 December 2003 30 June 2004
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Realised (losses)/gains
on investments - (394) (394) - 147 147 - 550 550
Unrealised gains on - 2,613 2,613 - 2,916 2,916 - 3,202 3,202
investments
Currency gains (note 2) - 84 84 - 76 76 - 90 90
Income (note 3) 280 - 280 297 - 297 721 - 721
Investment management fee (46) (46) (92) (43) (43) (86) (88) (88) (176)
Other administrative (80) - (80) (82) - (82) (133) - (133)
expenses
Net return before finance
costs and taxation 154 2,257 2,411 172 3,096 3,268 500 3,754 4,254
Finance costs of (13) (13) (26) (6) (6) (12) (17) (17) (34)
borrowings
Return on ordinary
activities before
taxation 141 2,244 2,385 166 3,090 3,256 483 3,737 4,220
Tax on ordinary (16) - (16) (17) 9 (8) (77) 31 (46)
activities
Return on ordinary
activities after taxation 125 2,244 2,369 149 3,099 3,248 406 3,768 4,174
Dividends in respect of
equity shares (186) - (186) (186) - (186) (463) - (463)
Transfer (from)/to (61) 2,244 2,183 (37) 3,099 3,062 (57) 3,768 3,711
reserves
Return per ordinary share
(note 4) 2.50p 44.63p 47.13p 2.96p 61.65p 64.61p 8.07p 74.93p 83.00p
Dividend per ordinary
share (note 5) 3.70p 3.70p 9.20p
* 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 2004
(unaudited)
31 December 2004 31 December 2003 30 June 2004
£'000 £'000 £'000
FIXED ASSETS
Investments 34,493 34,247 33,560
CURRENT ASSETS
Debtors 110 147 122
Cash and short term deposits 2,829 361 1,746
2,939 508 1,868
CREDITORS
Amounts falling due within one year + (285) (326) (373)
NET CURRENT ASSETS 2,654 182 1,495
TOTAL ASSETS (before deduction of loans and 37,147 34,429 35,055
provisions)
Bank loans (note 6) (1,562) (1,676) (1,654)
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation (3) (3) (2)
35,582 32,750 33,399
CAPITAL AND RESERVES
Called-up share capital 1,257 1,257 1,257
Capital reserves 33,764 30,851 31,520
Revenue reserve 561 642 622
EQUITY SHAREHOLDERS' FUNDS 35,582 32,750 33,399
NET ASSET VALUE PER ORDINARY SHARE 707.7p 651.4p 664.3p
Ordinary shares in issue 5,027,766 5,027,766 5,027,766
+ Excluding bank loans
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
Six months to Six months to Year to
31 December 2004 31 December 2003 30 June 2004
£'000 £'000 £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 90 266 547
(note 7)
NET CASH OUTFLOW FROM SERVICING OF FINANCE (26) (11) (23)
TOTAL TAX PAID - - (72)
NET CASH INFLOW/(OUTFLOW) FROM FINANCIAL 1,296 (9) 1,365
INVESTMENT
EQUITY DIVIDENDS PAID (277) (277) (463)
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 1,083 (31) 1,354
Net cash outflow from bank loans - (9) (9)
INCREASE/(DECREASE) IN CASH 1,083 (40) 1,345
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET DEBT
Increase/(decrease) in cash in the period 1,083 (40) 1,345
Net cash outflow from bank loans - 9 9
Exchange movement on bank loans 92 52 74
MOVEMENT IN NET FUNDS/(DEBT) IN THE PERIOD 1,175 21 1,428
NET FUNDS/(DEBT) AT START OF THE PERIOD 92 (1,336) (1,336)
NET FUNDS/(DEBT) AT END OF THE PERIOD 1,267 (1,315) 92
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
THIRTY LARGEST EQUITY HOLDINGS
at 31 December 2004
Name Region Business Market value % of total
£'000 assets
Baillie Gifford Pacific Asia Pacific Investment fund 2,411 6.5
Fund
Golden West Financial North America Savings and loans 1,024 2.8
Altria North America Tobacco and food 757 2.0
Imperial Tobacco United Kingdom Tobacco 714 1.9
Vodafone United Kingdom Mobile telecommunication services 706 1.9
Moody's North America Bond rating agency 706 1.9
Total Fina Elf Continental Europe Integrated oil 669 1.8
Mohawk Industries North America Carpets 570 1.5
GlaxoSmithKline United Kingdom Pharmaceuticals 560 1.5
Suncor Energy North America Oil 553 1.5
MAC Japan Active
Shareholder Fund LP Japan Shareholder activist fund 485 1.3
ABB Continental Europe Electrical equipment 473 1.3
Automatic Data North America Payroll processing 462 1.2
Patterson Dental North America Dental products and supplies 452 1.2
Danske Bank Continental Europe Retail and commercial bank 429 1.2
UBS Continental Europe Investment and private banking 427 1.1
BP United Kingdom Integrated oil 419 1.1
Sanofi Aventis Continental Europe Pharmaceuticals 415 1.1
Freddie Mac North America Mortgages 397 1.1
Wyeth North America Pharmaceuticals 393 1.1
BHP Billiton Asia Pacific Mining 376 1.0
Altadis Continental Europe Tobacco 360 1.0
Wellpoint North America Healthcare insurance 359 1.0
Royal Bank of Scotland United Kingdom Banking 356 1.0
ENI Continental Europe Oil and gas 356 1.0
Barclays United Kingdom Banking 352 0.9
Omnicom North America Advertising agency 351 0.9
Essilor Continental Europe Opthalmology 339 0.9
Atlas Copco Continental Europe Engineering 338 0.9
SAP Continental Europe Business software 329 0.9
16,538 44.5
DISTRIBUTION OF ASSETS
at 31 December 2004
(unaudited)
31 December 2004 31 December 2003 30 June 2004
% % %
Equities: United Kingdom 16.1 16.1 15.6
Continental Europe 21.5 21.3 21.5
North America 28.6 29.6 29.7
Japan 9.9 12.2 13.1
Asia Pacific 8.2 8.6 7.6
Other Emerging Markets 3.5 3.3 3.4
Total equities 87.8 91.1 90.9
Sterling bonds - 3.8 -
Overseas bonds 5.1 4.6 4.9
Net liquid assets 7.1 0.5 4.2
Total assets (before deduction of bank 100.0 100.0 100.0
loans)
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
NOTES
1. The financial statements for the six months to 31 December 2004 have been
prepared on the basis of the accounting policies set out in the Company's
Annual Financial Statements at 30 June 2004.
The Interim Report was approved by the Board on 7 February 2005.
None of the views expressed in this document should be construed as advice
to buy or sell a particular investment.
Six months to Six months to Year to
31 December 2004 31 December 2003 30 June 2004
£'000 £'000 £'000
2. Currency gains/(losses)
Realised exchange differences 10 84 298
Movement in unrealised exchange differences on loans 92 (8) (208)
Unrealised loss on forward contract (18) - -
84 76 90
3. Income
Income from investments and interest receivable 279 297 719
Other income 1 - 2
4. Return per ordinary share
Revenue return 125 149 406
Capital return 2,244 3,099 3,768
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.
5. The interim dividend will be paid on 7 April 2005 to all shareholders on
the register at the close of usiness on 11 March 2005. The ex-dividend
date is 9 March 2005.
6. A US$3 million loan facility has been arranged with ING Bank N.V., expiring
on 5 March 2007. At 31 December 2004 there were outstanding drawings of
US$3 million (31 December 2003 and 30 June 2004 - US$3 million).
Six months to Six months to Year to
31 December 2004 31 December 2003 30 June 2004
£'000 £'000 £'000
7. Reconciliation of net revenue before finance costs and
taxation to net cash inflow from operating activities
Net revenue before finance costs and taxation 154 172 500
Decrease in accrued income 4 137 158
Decrease in other debtors 8 5 4
(Decrease)/increase in creditors (16) 7 17
Investment management fee charged to capital (46) (43) (88)
Overseas tax suffered (14) (12) (41)
Income tax suffered - - (3)
NET CASH INFLOW FROM OPERATING ACTIVITIES 90 266 547
8. The financial information contained within this interim report does not
constitute statutory accounts as defined in section 240 of the Companies
Act 1985. The financial information for the year ended 30 June 2004 has
been extracted from the statutory accounts which have been filed with the
Registrar of Companies and which contain an unqualified Auditors' Report
and do not contain a statement under section 237 (2) or (3) of the
Companies Act 1985.
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