Half Yearly Report

RNS Number : 4282E

Midas Income & Growth Trust PLC

21 December 2009

 



MIDAS INCOME & GROWTH TRUST PLC

HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 OCTOBER 2009

The investment objective of Midas Income & Growth Trust PLC is to seek to achieve an absolute return with low volatility through investment in a multi-asset portfolio with the aim of achieving both income and capital returns.

The following is the unaudited Interim Board Report for the six months ended 31 October 2009.

Interim Board Report

For Midas Income & Growth Trust PLC

Highlights

• Net asset value total return of 17.7% (diluted)

• Share price total return of 22.3%

• Quarterly dividends maintained at 1.63p

• 215,000 shares purchased for cancellation

Market Background and Performance

The nascent recovery in financial markets, on which I commented in my statement earlier this year, has continued over the current period. There have been positive signs over recent months that the various support measures adopted by Central Banks and by Government action has provided much needed stability to the financial system. This strategy appears to have had some success and produced an environment in which the global economies can begin to emerge from recession. Whilst the strength and sustainability of this recovery is not yet clear, there has been enough positive news over recent months to suggest that better economic conditions lie ahead.

Against this background a wide range of the Company's assets have benefited from this recovery and I am pleased to report that the Company's fully diluted net asset value total return for the period (including dividends) was 17.7%. The Company's share price increased by 18.1% which, with dividends reinvested, gave a return of 22.3% for the period. This compares favourably with the benchmark return for the period of 4% (8% per annum) and also matches well with the return from the FTSE All Share Index, which gave a total return of 21.4% over the half year.

It has been particularly pleasing that the recovery in asset prices has been broadly based and the return generated has not been achieved by adopting a very aggressive investment approach. Indeed, whilst overall equity exposure has increased slightly over the period, the underlying positions have been very much centred on large blue chip companies, with strong business franchises, robust balance sheets and positive cash-flows. The multi-asset, balanced nature of the portfolio has been maintained with the diversified approach adopted by your manager producing returns which are not over dependent on any one holding or asset class. 

The discount on which the Company's shares traded to net asset value narrowed slightly to 8.8% by the end of October, having been 11.9% at the end of April. Over the period a further 215,000 shares were bought for cancellation, with 8,243,000 shares now having been repurchased since the share buyback programme was initiated in November 2007. Your Board and manager remain committed to further improving the rating that your shares trade at in relation to the net asset value.

Gearing

The Company's short term rolling debt facility was successfully re-negotiated for a further two year period in early August. The overall size of the facility was reduced to £7 million from £8 million. The drawn borrowings stood at £7 million throughout the period, with gearing (pre cash) at the end of October being 16.0% of net assets, comfortably within your Board's stated maximum of 25%. 

Exercise of Warrants

No warrants were exercised in the period. There are currently 1,934,411 warrants remaining in issue which can be exercised at 100p on 31 August 2010. This is the final exercise date for the warrants. 

Dividends

A first interim dividend of 1.63p was declared on 8 August 2009, which was at the same level as the quarterly dividends paid in the previous financial year, and, on 16 November 2009, a second interim dividend of 1.63p was declared. Your Board remains fully aware of the importance of these regular dividend payments to the Company's shareholders.

Annual General Meeting

This year's AGM will be held in Liverpool at 12.30 p.m. on 7 September 2010. I would be delighted for shareholders to take this opportunity to meet with Board members and Investment Managers over a post AGM buffet lunch.

Outlook

Whilst recent economic developments have been more encouraging, there remains a great deal of uncertainty surrounding both the strength and sustainability of recovery. Credit markets are continuing to improve and banks are beginning, although only selectively, to lend again. Headwinds still appear strong with unemployment likely to rise in the major western economies until well into 2010. Meanwhile the burden of debt in many developed economies, following the unprecedented support to the financial system, is likely to act as a break on growth and may require serious cuts in public spending in an attempt to rebalance budgets. 

In this context it seems likely that markets will experience further bouts of volatility. However, the accommodative stance in monetary policy is likely to continue for some time, providing a stable environment for further, albeit more muted, progress in equity, property and corporate bond markets. Indeed with interest rates so low, there is still further potential for investor risk appetite to continue to improve. 

Principal Risks and Uncertainties 

Investment and Market Risks: Managing a portfolio of shares and debt security investments necessarily involves certain risks, the more important of which are set out below. A significant proportion of the assets of the Company may be invested in debt security investments and overseas equities. Whilst this broader spread of investments is intended to reduce the volatility and risk profile of the Company's portfolio this cannot be assured.

Shares: The market value of the Ordinary shares, as well as being affected by the net asset value, also takes into account their supply and demand. The market value of an Ordinary share can fluctuate and may not always reflect its underlying net asset value. Investment in the Company should be regarded as long term in nature. There can be no guarantee that appreciation in the value of the Company's investments will occur and investors may not get back the full value of their original investment. 

Investment Objective: There is no guarantee that the investment policy adopted by the Company will provide the returns sought by the Company. 

Borrowings: The Company currently utilises gearing in the form of bank borrowings. Gearing has the effect of exacerbating market falls and market gains. 

Currency: A proportion of the Company's portfolio may be invested in assets denominated in currencies other than sterling. This will increase the currency risk that the Company is exposed to as a result in fluctuations in the exchange rate between the denomination of the investments and the sterling denomination of the Company's base currency. 

Dividends: The ability of the Company to pay dividends in respect of the Ordinary shares and any future dividend growth will depend on the level of income received from its investments. Accordingly, the amount of dividends paid to Shareholders may fluctuate. 

Discount: While the Board intends to implement an active discount management policy, the ability to implement such a policy is dependent on a number of factors including the ability to buy back shares in the market, the ability to fund share buybacks, the authority to buy back shares being renewed annually and the Board's discretion over the making and timing of any buybacks. Even when an active discount management policy is implemented, there can be no guarantee that this will result in the discount narrowing.

Key Individuals: The Company is substantially dependent on the services of key individuals working for its Manager, namely Alan Borrows and Simon Edwards . The loss of either or both of these individuals could have an adverse effect on the Company's performance. 

Taxation and Exchange Controls: Any change in the Company's tax status or in taxation legislation (including the tax treatment of dividends or other investment income received by the Company) or failure to satisfy the conditions of section 842 of the Income and Corporation Taxes Act 1988 (including the requirement for a listing) could affect the value of the investments held by the Company, affect the Company's ability to provide returns to Shareholders or alter the post tax returns to Shareholders. 

Related Parties Transactions

The transactions with related parties that have taken place during the first six months of the current financial year are disclosed in Note 9 to the accounts. The related party transactions are the same as those in place at the Company's year end and are not deemed to have materially affected the financial position or the performance of the Company during the period.

Directors' Responsibility Statement

The Directors are responsible for preparing the half-yearly financial report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

• the condensed set of financial statements contained within the half-yearly financial report has been prepared in accordance with the Accounting Standards Board's Statement 'Half Yearly Financial Reports';
  

• the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period and any changes in the related party transactions described in the last annual report that could so do).

Hubert Reid

Chairman

18 December 2009

Manager's Review

Market and Economic Commentary 

Over the past six months financial markets have continued to rally on hopes that the world is emerging from the economic mess of the past 18 months. These hopes have been supported by a much improved run rate of data, not least from the United States. House prices (for the time being at least) have shown some signs of stabilisation, albeit with some concern of an eventual increase in supply of stock yet to come to the market. Furthermore, business sentiment surveys have turned more positive and economic growth indicators have returned to positive levels in some of the major developed countries, slightly ahead of previous expectations. In addition earlier estimates of economic contraction have been tempered in some of the worst affected countries.

Such improvements have helped to drive up asset prices as a degree of confidence has returned, helped in part by the exceptionally low returns available on cash and government bonds due to Quantitative Easing around the world. While the initial indications, both economically and in that of asset prices has been indicative of a 'V' shaped recovery, the absolute level of activity and asset prices remains considerably below that of levels seen two years ago and the path from here is less than clear. Much of the recovery to date is a result of the expected reversal of de-stocking. Outlook statements from companies appear, quite naturally, keen to downplay recovery prospects, as management are motivated to avoid future disappointments.

Despite the severe contraction in economic activity, the resilience of inflation (albeit remaining within the upper limits of levels targeted by Central Banks) gives some further cause for concern for the future, should economic growth gain any significant momentum.

The recovery in asset prices will clearly have positive wealth effects, although there remains plenty of evidence that both individuals and companies are continuing to de-leverage, taking advantage, where possible, of the low interest rates now available. Furthermore, while the rate of job losses has declined, unemployment in the developed economies continues to rise and this will hinder the pace of economic recovery. Of much more encouragement has been the stronger and sounder underpinnings to growth within Asia, which has provided impetus for strong price rises in many commodities.

The outlook for financial markets in 2010 is largely dependent on the continuation of the better trend in economic data. The valuation of some assets appears a little forward looking following the strong rally seen since March. Volatility has fallen back to levels not seen since the early days of the crisis, but this improvement may be challenged should there be setbacks as economic support measures are gradually withdrawn. Interest rates have begun to rise, mainly in economies benefiting from the improved commodity outlook, although it seems likely that monetary policy will remain loose more generally as authorities prioritise growth and financial stability over future inflation concerns.

Investment Report 

The returns from the portfolio have been encouraging over the period with positive contributions coming across the wide range of assets held. The main asset allocation changes have been to increase UK equity exposure towards a more neutral weighting, although this increase has been centred on companies with defensive characteristics and those exposed to better economic trends outside the UK. Fixed Interest exposure increased, although this was mainly due to the strong rally in credit markets. Meanwhile property exposure has been reduced, although a small addition was made to UK commercial property investment late in the period. Alternative asset positions have also been reduced, particularly in the area of structured products, where several holdings successfully matured over the period. Private equity exposure was reduced as part of the position in A J Bell Holdings was sold at a value significantly ahead of the end April valuation.

Although equity positions have been, in general, fairly defensive, they have nevertheless benefited from the strong rally experienced in most major markets. Corporate bond holdings, which were added to in the final quarter of 2008, have also seen a significant recovery in pricing, although some profits were taken as yields fell to less attractive levels towards the end of the period. Property holdings have benefited from a closing of the extreme discounts at which many were trading to the underlying net asset values earlier this year, whilst corporate activity has also been beneficial to returns in this area. The combination of narrowing discounts on closed-end fund holdings, together with good underlying performance, has also been responsible for a strong recovery in other positions within the portfolio. Overseas equity, hedge fund and commodity holdings have all been beneficiaries of this discount narrowing. 

The revenue generated from the portfolio had come under some pressure in the 12 months prior to this period but this position has now stabilised. It is expected that the income position will now improve from current levels.

Asset Allocation

The asset allocation across the portfolio at 31 October 2009 is shown in the table below.

Asset Class	Portfolio Weight	Core Allocation	Allocation Range
	%	%	%
UK Equities	31.5	35	20-55
Overseas Equities	21.2	15	10-25
Total equities	52.7	50	30-80
Fixed Interest (inc Cash)	26.3	25	15-45
Alternative Assets	13.2	15	10-25
Property	7.8	10	0-25

All figures are expressed as a percentage of Gross assets.

Summary

The stresses within financial markets have now begun to reduce, helped by unprecedented levels of intervention by Governments around the world. Whilst the immediate prospects for economic growth are now improved, there remains a serious concern about the longer term repercussions of such a massive stimulus to the world economy. Notwithstanding this reservation the immediate prospects for further market progress looks encouraging. The portfolio remains broadly balanced across a range of assets and is well positioned to deliver attractive returns if markets continue to recover over the course of the coming year. 

Alan Borrows

Midas Capital Partners Limited

18 December 2009

  Income Statement

		Six months ended  31 October 2009			Six months ended  31 October 2008
		(unaudited)			(unaudited)
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments		-	6,296	6,296	-	(21,853)	(21,853)
Income	2	1,164	-	1,164	1,908	-	1,908
Investment management fee		(103)	(103)	(206)	(141)	(141)	(282)
Performance fee		-	-	-	-	-	-
VAT recoverable on investment management fees		-	-	-	-	-	-
Administration expenses		(170)	-	(170)	(185)	-	(185)
Exchange (losses)/gains		-	(9)	(9)	-	-	-
		______	______	______	______	______	______
Net return before finance costs and taxation		891	6,184	7,075	1,582	(21,994)	(20,412)
Finance costs		(85)	(85)	(170)	(101)	(101)	(202)
		______	______	______	______	______	______
Net return on ordinary activities before taxation		806	6,099	6,905	1,481	(22,095)	(20,614)
Taxation on ordinary activities	3	(3)	-	(3)	-	-	-
		______	______	______	______	______	______
Return on ordinary activities after taxation		803	6,099	6,902	1,481	(22,095)	(20,614)
		______	______	______	______	______	______
Return per share (pence):	4
Basic		2.11	15.99	18.10	3.49	(52.12)	(48.63)
		______	______	______	______	______	______
Fully-diluted		2.11	15.99	18.10	3.46	(51.67)	(48.21)
		______	______	______	______	______	______
The total column of this statement represents the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.

  Income Statement (Cont'd)

		Year ended 30 April 2009
		(audited)
		Revenue	Capital	Total
	Notes	£'000	£'000	£'000
Losses on investments		-	(23,538)	(23,538)
Income	2	3,329	-	3,329
Investment management fee		(240)	(240)	(480)
Performance fee		-	-	-
VAT recoverable on investment management fees		140	217	357
Administration expenses		(391)	-	(391)
Exchange (losses)/gains		-	9	9
		______	______	______
Net return before finance costs and taxation		2,838	(23,552)	(20,714)
Finance costs		(153)	(153)	(306)
		______	______	______
Net return on ordinary activities before taxation		2,685	(23,705)	(21,020)
Taxation on ordinary activities	3	-	-	-
		______	______	______
Return on ordinary activities after taxation		2,685	(23,705)	(21,020)
		______	______	______
Return per share (pence):	4
Basic		6.52	(57.53)	(51.01)
		______	______	______
Fully-diluted		6.50	(57.37)	(50.87)
		______	______	______

  Balance Sheet

		As at	As at	As at
		31 October	31 October	30 April
		2009	2008	2009
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss		48,679	47,260	43,841
		______	______	______
Current assets
Debtors and prepayments		847	764	923
Cash and short term deposits		2,552	1,341	705
		______	______	______
		3,399	2,105	1,628
		______	______	______
Creditors: amounts falling due within one year
Bank loan		(7,000)	(6,250)	(7,000)
Other creditors		(1,239)	(160)	(95)
		______	______	______
		(8,239)	(6,410)	(7,095)
		______	______	______
Net current liabilities		(4,840)	(4,305)	(5,467)
		______	______	______
Net assets		43,839	42,955	38,374
		______	______	______
Capital and reserves
Called-up share capital		9,528	10,391	9,582
Share premium account		-	40,993	-
Special reserve		41,954	4,007	42,149
Warrant reserve		616	616	616
Capital redemption reserve		2,061	1,198	2,007
Capital reserve	6	(11,443)	(15,932)	(17,542)
Revenue reserve		1,123	1,682	1,562
		______	______	______
Equity Shareholders' funds		43,839	42,955	38,374
		______	______	______
Net asset value per Ordinary share (pence):	8
Basic		115.03	103.35	100.12
		______	______	______
Diluted		114.30	103.20	100.12
		______	______	______

          Reconciliation of Movements in Shareholders' Funds

Six months ended 31 October 2009 (unaudited)
			Share			Capital
		Share	premium	Special	Warrant	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2009		9,582	-	42,149	616	2,007	(17,542)	1,562	38,374
Purchase of Ordinary shares for cancellation		(54)	-	(195)	-	54	-	-	(195)
Return on ordinary activities after taxation		-	-	-	-	-	6,099	803	6,902
Dividends paid	5	-	-	-	-	-	-	(1,242)	(1,242)
		______	______	______	______	______	______	______	______
Balance at 31 October 2009		9,528	-	41,954	616	2,061	(11,443)	1,123	43,839
		______	______	______	______	______	______	______	______
Six months ended 31 October 2008 (unaudited)
			Share			Capital
		Share	premium	Special	Warrant	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2008		10,910	40,993	6,641	616	679	6,163	1,612	67,614
Purchase of Ordinary shares for cancellation		(519)	-	(2,634)	-	519	-	-	(2,634)
Return on ordinary activities after taxation		-	-	-	-	-	(22,095)	1,481	(20,614)
Dividends paid	5	-	-	-	-	-	-	(1,411)	(1,411)
		______	______	______	______	______	______	______	______
Balance at 31 October 2008		10,391	40,993	4,007	616	1,198	(15,932)	1,682	42,955
		______	______	______	______	______	______	______	______
Year ended 30 April 2009 (audited)
			Share			Capital
		Share	premium	Special	Warrant	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 April 2008		10,910	40,993	6,641	616	679	6,163	1,612	67,614
Purchase of Ordinary shares for cancellation		(1,328)	-	(5,485)	-	1,328	-	-	(5,485)
Cancellation of share premium account
(see note below)		-	(40,993)	40,993	-	-	-	-	-
Return on ordinary activities after taxation		-	-	-	-	-	(23,705)	2,685	(21,020)
Dividends paid	5	-	-	-	-	-	-	(2,735)	(2,735)
		______	______	______	______	______	______	______	______
Balance at 30 April 2009		9,582	-	42,149	616	2,007	(17,542)	1,562	38,374
		______	______	______	______	______	______	______	______
The cancellation of the share premium account (as approved at the Extraordinary General Meeting held on 27 October 2008 and by the court dated 26 November 2008) has resulted in the Company having an increased special reserve, the purpose of which is to fund market purchases of the Company's own shares.

  Cash Flow Statement

		Six months ended	Six months ended	Year  ended
		31 October 2009	31 October 2008	30 April  2009
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Net return on ordinary activities before finance costs and taxation		7,075	(20,412)	(20,714)
Adjustments for:
(Gains)/losses on investments		(6,296)	21,853	23,538
Exchange losses/(gains)		9	-	(9)
Decrease in accrued income		171	405	417
Decrease/(increase) in other debtors		270	(71)	(361)
Increase/(decrease) in creditors		94	(58)	(10)
		__________	__________	__________
Net cash inflow from operating activities		1,323	1,717	2,861
Net cash outflow from servicing of finance		(173)	(202)	(397)
Net cash inflow from financial investment		2,143	3,115	4,946
Equity dividends paid	5	(1,242)	(1,411)	(2,735)
		__________	__________	__________
Net cash inflow before financing		2,051	3,219	4,675
Net cash outflow from financing		(195)	(2,634)	(4,735)
		__________	__________	__________
Increase/ (decrease) in cash		1,856	585	(60)
		__________	__________	__________
Reconciliation of net cash flow to movement in net debt
Increase / (decrease) in cash as above		1,856	585	(60)
Foreign exchange movements		(9)	-	9
Drawdown of additional loan		-	-	(750)
		__________	__________	__________
Movement in net debt in the period		1,847	585	(801)
Opening net debt		(6,295)	(5,494)	(5,494)
		__________	__________	__________
Closing net debt		(4,448)	(4,909)	(6,295)
		__________	__________	__________
Represented by:
Cash at bank and in hand		2,552	1,341	705
Debt falling due within one year		(7,000)	(6,250)	(7,000)
		__________	__________	__________
		(4,448)	(4,909)	(6,295)
		__________	__________	__________

  Notes to the Accounts

1a.	Basis of accounting
	The accounts have been prepared in accordance with applicable UK Accounting Standards, with pronouncements on Half-Yearly Reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in January 2009. The adoption of the January 2009 SORP has no effect on the financial statements of the Company, other than the recommendation to separately disclose capital reserves that relate to the revaluation of investments held at the reporting date. These are disclosed in note 6. This new recommendation replaces the previous requirement to disclose the value of the capital reserve that was unrealised. They have also been prepared on the assumption that approval as an investment trust will continue to be granted. The financial statements have been prepared on a going concern basis.
	The financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP).
	The half-yearly financial statements have been prepared using the same accounting policies as the preceding annual accounts.
b.	Dividends payable
	Dividends are recognised in the period in which they are paid.

		Six months ended	Six months ended	Year ended
		31 October	31 October	30 April
		2009	2008	2009
		£'000	£'000	£'000
2.	Income
	Income from investments
	UK franked dividends	660	818	1,467
	UK unfranked dividends	143	412	678
	Overseas dividends	335	628	1,123
	Stock dividends	-	16	16
		__________	__________	__________
		1,138	1,874	3,284
		__________	__________	__________
	Other income
	Deposit interest	24	29	40
	Other commission	2	5	5
		__________	__________	__________
		26	34	45
		__________	__________	__________
	Total income	1,164	1,908	3,329
		__________	__________	__________

3.	Taxation
	The taxation expense reflected in the Income Statement is based on management's best estimate of the weighted average annual tax rate for the year to 30 April 2010 of 28%.

4.	Return per share
	The basic revenue return of 2.11 pence (31 October 2008 - 3.49 pence; 30 April 2009 6.52 pence) per Ordinary share is calculated on net revenue on ordinary activities after taxation for the year of £803,000 (31 October 2008 - £1,481,000; 30 April 2009 - £2,685,000) and on 38,128,309 (31 October 2008 - 42,393,743; 30 April 2009 - 41,204,120) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.
	The basic capital return of 15.99 pence (31 October 2008 - loss - 52.12 pence; 30 April 2009 - loss - 57.53 pence) per Ordinary share is calculated on net capital gains for the period of £6,099,000 (31 October 2008 - losses of £22,095,000; 30 April 2009 - losses of £23,705,000) and on 38,128,309 (31 October 2008 - 42,393,743; 30 April 2009 - 41,204,120) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.
	The basic total return of 18.10 pence (31 October 2008 - loss - 48.63 pence; 30 April 2009 - loss - 51.01 pence) per Ordinary share is calculated on the total gains for the period of £6,902,000 (31 October 2008 - losses of £20,614,000; 30 April 2009 - losses of £21,020,000) and on 38,128,309 (31 October 2008 - 42,393,743; 30 April 2009 - 41,204,120) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.
	Diluted returns have been calculated on the basis set out in Financial Reporting Standard 22 'Earnings per share' ('FRS22'). The adjusted weighted average number of Ordinary shares used in the calculation is 40,062,720 (31 October 2008 - 42,763,982; 30 April 2009 - 43,138,531).

5.	Dividends
	Ordinary dividends on equity shares deducted from reserves are analysed below:
		Six months ended	Six months  ended	Year  ended
		31 October 2009	31 October 2008	30 April 2009
		£'000	£'000	£'000
	2008 fourth interim dividend - 1.68p	-	733	733
	2009 first interim dividend - 1.63p	-	678	678
	2009 second interim dividend - 1.63p	-	-	677
	2009 third interim dividend - 1.63p	-	-	647
	2009 fourth interim dividend - 1.63p	621	-	-
	2010 first interim dividend - 1.63p	621	-	-
		__________	__________	__________
		1,242	1,411	2,735
		__________	__________	__________
	The Company has declared a second interim dividend in respect of the year ending 30 April 2010 of 1.63p net (2009 - 1.63p) per Ordinary share which was paid on 15 December 2009 to Shareholders on the register on 27 November 2009.

6.	Analysis of capital reserve
	The capital reserve reflected in the Balance Sheet at 31 October 2009 includes losses of £10,893,000 (31 October 2008 - losses of £22,404,000; 30 April 2009 - losses of £14,307,000) which relate to the revaluation of investments held at the reporting date.

7.	Transaction costs
	During the six months ended 31 October 2009 expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Income Statement. The total costs were as follows:
		Six months ended	Six months  ended	Year  ended
		31 October 2009	31 October 2008	30 April  2009
		£'000	£'000	£'000
	Purchases	32	28	42
	Sales	9	14	22
		__________	__________	__________
		41	42	64
		__________	__________	__________

		As at	As at	As at
		31 October 2009	31 October  2008	30 April  2009
8.	Net asset value per share
	Basic
	Attributable net assets (£'000)	43,839	42,955	38,374
	Number of Ordinary shares in issue	38,111,950	41,563,950	38,326,950
	Net asset value per Ordinary share (p)	115.03	103.35	100.12
	Diluted
	Attributable net assets (£'000)	45,773	44,889	40,308
	Diluted number of Ordinary shares in issue	40,046,361	43,498,361	40,261,361
	Net asset value per Ordinary share (p)	114.30	103.20	100.12

9.

Related party disclosure On 7 March 2008 Midas Capital Partners Limited (MCP) and iimia MitonOptimal plc merged to form Midas Capital plc. The Company has appointed Intelli Corporate Finance Ltd, which was, until its sale to Canaccord Adams Limited on 1 October 2009, also a subsidiary company of Midas Capital plc, to act as stockbroker and financial adviser. The aggregate remuneration paid by the Company to Intelli during the period (inclusive of VAT) was £15,000 (six month period to 31 October 2008 - £15,000; year to 30 April 2009 - £29,000) in respect of their services as broker and financial adviser. Group subsidiaries of Midas Capital plc, on occasions, earn broking commissions on share transactions on behalf of the Company. During the period Midas Capital plc received commission fees totalling £1,000 (six month period to 31 October 2008 - £5,000; year to 30 April 2009 - £11,000).

10.

The financial information in this report does not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. The financial information for the year ended 30 April 2009 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified and did not contain any statement under Section 237 (2) or (3) of the Companies Act 1985. The interim accounts have been prepared using the same accounting policies as the preceding annual accounts.

11.	This Half-Yearly Financial Report was approved by the Board on 18 December 2009.

12.    The Half-Yearly Financial Report is unaudited.

13.    The Half-Yearly Financial Report will be posted to shareholders in early January 2010 and available thereafter from the Manager's website (www.midascapital.co.uk).

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.

Aberdeen Asset Management PLC

Secretaries

18 December 2009

  Independent Review Report to the Members of Midas Income & Growth Trust PLC

Introduction

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2009 which comprises the Income Statement, Balance Sheet, Reconciliation of Movements in Shareholders' Funds, Cash Flow Statement and the related notes that have been reviewed. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

This report is made solely to the Company in accordance with guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with United Kingdom Generally Accepted Accounting Practice. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the Accounting Standards Board Statement "Half-Yearly Financial Reports".

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements

(UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2009 is not prepared, in all material respects, in accordance with the Accounting Standards Board Statement "Half-Yearly Financial Reports" and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

18 December 2009 

 

END

 

 

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