Interim Results

Monks Investment Trust PLC 28 November 2000 THE MONKS INVESTMENT TRUST PLC Results for the six months to 31 October 2000 28 November 2000 Salient points - NAV up 3.9% to 1,252.5p, compared with a rise of 2.6% in the FTSE World Index (in sterling terms). Over the last 12 months to 31 October 2000 NAV is up by 22.7% against a rise of 14.5% in the index. - US stock picking enhances result. The main positive factors contributing to the result were good stock picking in the US and strong return from US TIPS (index linked bonds). - 2,802,811 shares bought back at an average discount of 15.6%, adding 0.6% to NAV per share. - UK weighting cut from 28.5% to 24.6%. Monks has continued to reduce its UK weighting to reflect its stated objective of investing internationally to achieve capital growth. The main area of additional investment has been the United States, where the manager has made net purchases of £64 million, mainly in the shares of oil and natural gas production companies. - Interim dividend reduced from 3.50p to 3.00p. The Company's reduced weighting in the UK and a more fully invested portfolio have led to a decline in earnings per share of 8%. The Board has therefore reduced the interim dividend and also expects to recommend a lower final dividend than the 6.20p paid last year. - AITC 'its' campaign. The Company's marketing efforts in conjunction with the 'its' campaign are showing signs of stimulating interest in investment trusts and stabilising the discount to asset value. The Board has supported the second year of the 'its' campaign and will continue to monitor developments to ensure adequate rewards for this expenditure. The Monks Investment Trust PLC (Monks), with total assets of £923 million invests internationally in order to achieve capital growth. An ISA and Share Plan are available. Monks is managed by Baillie Gifford & Co., the leading independent Edinburgh based fund management group with over £22 billion funds under management and advice. For further information please contact: Richard Burns, Manager The Monks Investment Trust PLC 020 7379 4612 Gill Meekison, Director Baillie Gifford & Co. 020 7379 4612 Mike Lord, Director Broadgate Marketing 020 7726 6111 Baillie Gifford & Co. is regulated by IMRO. THE MONKS INVESTMENT TRUST PLC Interim Report 31 October 2000 Over the six months to 31 October 2000, net asset value per share (NAV) rose by 3.9%, from 1,205.2p to 1,252.5p. This compares with a rise of 2.6% in the FTSE World Index in sterling. Over the last 12 months, NAV is up by 22.7% against a rise of 14.5% in the index. Individual market performances have varied over the six month period, with the USA producing a gain of 6.1% in sterling terms and the UK rising by 2.5%; by contrast, Asian markets were weak with Japan down by 10.8% and Asia Pacific by 5.6% (both figures in sterling). Continental Europe rose marginally. The main positive factors contributing to our result were good stock picking in the United States, the strong returns from our US TIPS (index linked bonds), and the 0.6% uplift to NAV from the buying in of 2,802,811 ordinary shares at a discount during the half year. Since the summer, evidence has begun to accumulate that economic growth is starting to decelerate, particularly in the USA but also in Britain and Continental Europe, which raises hopes that we may have seen the peak in short term interest rates. The other notable features of the period have been the strength of the dollar, not only against the Euro but also, helpfully for us, against the pound, and the continued strength of the oil price, which has confounded many observers by staying well above $30 since late summer. This latter factor is likely to mean a squeeze on the profit margins of a wide range of companies' over the next several months, with consequential disappointing profits, but will obviously benefit energy producers, to which we are well exposed. We have continued the programme of reducing our UK equities, with net sales of £48m during the half year; the UK weighting is now down to 24.6% compared with 28.5% at the year-end and we expect it to be lower again in six months time. The main area of additional investment has been the United States, where we have invested £64m, much of it in the shares of oil and natural gas production companies. With our reducing exposure to the UK and a more fully invested portfolio, earnings per share have, as expected, fallen. The figure for the six months to 31 October 2000 is 3.99p, a decline of 8% on last year, and we are currently expecting the full year's outcome to be around 81/2p. Although this will be ahead of last year's earnings figure of 6.89p, it is well short of the dividend of 9.70p which we have paid for the last few years. The Board is therefore, as foreshadowed in the Annual Report, reducing the interim dividend from 3.50p to 3.00p and expects also to recommend a lower final dividend than the 6.20p paid last year. The interim dividend will be paid on 1 February 2001. The discount on which Monks shares have traded has narrowed somewhat over the last six months. During the six months 2,802,811 shares were bought in at an average discount of 15.6%. We have authority to buy back a further 7,363,237 shares. By order of the Board Baillie Gifford & Co. 28 November 2000 The following is the interim statement for the six months ended 31 October 2000 which has been neither reviewed nor audited by the auditors. This statement is being printed and will be sent to all shareholders on 11 December 2000. 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. THE MONKS INVESTMENT TRUST PLC STATEMENT OF TOTAL RETURN (unaudited and incorporating the revenue account*) for the six months ended 31 October 2000 Revenue Capital Total £'000 £'000 £'000 Realised gains on investments - 41,756 41,756 Unrealised (losses)/gains on - (16,396) (16,396) investments Currency gains - 623 623 Income (note 1) 10,188 - 10,188 Investment management fee (2,397) - (2,397) Other administrative expenses (489) - (489) Net return before finance 7,302 25,983 33,285 costs and taxation Finance costs of borrowings (4,249) - (4,249) Return on ordinary activities 3,053 25,983 29,036 before taxation Tax on ordinary activities (419) - (419) Return on ordinary activities 2,634 25,983 28,617 after taxation Dividends in respect of (1,916) - (1,916) equity shares Transfer to/(from) reserves 718 25,983 26,701 Return per ordinary share 3.99p 39.32p 43.31p (note 2) Dividend per Ordinary Share 3.00p (note 3) for the six months ended 31 October 1999 (restated+) Revenue Capital Total £'000 £'000 £'000 Realised gains on - 35,056 35,056 investments Unrealised (losses)/gains - (30,011) (30,011) on investments Currency gains - 129 129 Income (note 1) 9,288 - 9,288 Investment management fee (1,886) - (1,886) Other administrative (438) - (438) expenses Net return before finance 6,964 5,174 12,138 costs and taxation Finance costs of borrowings (3,491) - (3,491) Return on ordinary 3,473 5,174 8,647 activities before taxation Tax on ordinary activities (201) - (201) Return on ordinary 3,272 5,174 8,446 activities after taxation Dividends in respect of (2,553) - (2,553) equity shares Transfer to/(from) reserves 719 5,174 5,893 Return per ordinary share 4.33p 6.84p 11.17p (note 2) Dividend per Ordinary Share 3.50p (note 3) for the year ended 30 April 2000 Revenue Capital Total £'000 £'000 £'000 Realised gains on investments - 97,043 97,043 Unrealised (losses)/gains on investments - 32,750 32,750 Currency gains - 407 407 Income (note 1) 17,560 - 17,560 Investment management fee (4,075) - (4,075) Other administrative expenses (964) - (964) Net return before finance costs and taxation 12,521 130,200 142,721 Finance costs of borrowings (7,065) - (7,065) Return on ordinary activities before taxation 5,456 130,200 135,656 Tax on ordinary activities (386) - (386) Return on ordinary activities after taxation 5,070 130,200 135,270 Dividends in respect of equity shares (6,752) - (6,752) Transfer to/(from) reserves (1,682) 130,200 128,518 Return per ordinary share (note 2) 6.89p 176.84p 183.73p Dividend per Ordinary Share (note 3) 9.70p * 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. + Restated for change in accounting policy (see note 7) THE MONKS INVESTMENT TRUST PLC SUMMARISED BALANCE SHEET at 31 October 2000 (unaudited) 31 October 2000 30 April 2000 £'000 £'000 NET ASSETS Fixed asset investments 900,489 879,964 Net liquid assets 23,007 46,486 Total assets (before 923,496 926,450 deduction of loans and debentures) Loans and debentures (note 4) (108,459) (108,373) 815,037 818,077 CAPITAL AND RESERVES Called-up share capital 16,254 16,955 Capital reserves 781,398 784,455 Revenue reserve 17,385 16,667 EQUITY SHAREHOLDERS' FUNDS 815,037 818,077 NET ASSET VALUE PER ORDINARY SHARE (after deducting prior 1,252.5p 1,205.2p charges at par) Ordinary shares in issue 65,016,059 67,818,870 (note 5) THE MONKS INVESTMENT TRUST PLC SUMMARISED CASH FLOW STATEMENT (unaudited) Six months to Year to 31 October 2000 30 April 2000 £'000 £'000 £'000 £'000 NET CASH INFLOW FROM 7,843 12,276 OPERATING ACTIVITIES NET CASH OUTFLOW (4,161) (6,976) FROM SERVICING OF FINANCE TOTAL TAX PAID (389) (404) FINANCIAL INVESTMENT (230,341) (535,501) Acquisitions of 249,450 579,826 investments 693 135 Disposals of investments Realised currency profit NET CASH INFLOW FROM 19,802 44,460 FINANCIAL INVESTMENT EQUITY DIVIDENDS PAID (4,170) (7,311) NET CASH INFLOW 18,925 42,045 BEFORE USE OF LIQUID RESOURCES AND FINANCING NET CASH INFLOW FROM - 5,000 USE OF LIQUID RESOURCES FINANCING (29,741) (86,508) Shares purchased for - 29,389 cancellation Loans drawn down NET CASH OUTFLOW (29,741) (57,119) FROM FINANCING DECREASE IN CASH (10,816) (10,074) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Decrease in cash in (10,816) (10,074) the period Decrease in liquid - (5,000) resources Loans drawn down - (29,389) Exchange movement on (70) 272 loans Other non-cash (16) (33) changes MOVEMENT IN NET DEBT (10,902) (44,224) IN THE PERIOD NET DEBT AT 1 MAY (65,964) (21,740) 2000 NET DEBT AT 31 (76,866) (65,964) OCTOBER 2000 THE MONKS INVESTMENT TRUST PLC TWENTY LARGEST EQUITY HOLDINGS at 31 October 2000 Name Business Market value % of total £'000 assets Baillie Gifford Investment fund 28,998 3.1 Pacific Fund * EOG Resources Natural gas exploration 23,862 2.6 and production * Philip Morris Tobacco, food and beer 20,178 2.2 Vodafone Group Mobile telecommunications 19,671 2.1 * NTT DoCoMo Mobile telecommunications 18,663 2.0 Glaxo Wellcome Pharmaceuticals 17,856 1.9 Royal Bank of Banking 17,221 1.9 Scotland * Amerada Hess Oil and gas production 14,944 1.6 BP Amoco International oil 14,320 1.6 * Freddie Mac Residential mortgage 12,396 1.3 investor Cable & Wireless Telecommunications 11,143 1.2 * Walgreen Pharmacy chain 10,997 1.2 Shell Transport & International oil 10,536 1.1 Trading Baillie Gifford Small company fund 10,380 1.1 British Smaller Companies Fund * Nokia Telecommunications 10,301 1.1 equipment Lloyds TSB Retail banking and 10,249 1.1 insurance AMVESCAP Fund manager 10,072 1.1 * Total Fina Elf Integrated oil 9,859 1.1 * Petrobras Integrated oil 9,267 1.0 * Sun Microsystems Corporate network 9,163 1.0 computers 290,076 31.3 * Primary listing outwith the UK DISTRIBUTION OF ASSETS at 31 October 2000 (unaudited) 31 October 2000 30 April 2000 % % Equities: United Kingdom 24.6 28.5 Continental Europe 14.3 17.4 North America 23.8 13.2 Latin America 1.4 0.6 Japan 9.6 11.8 Asia Pacific 4.5 6.0 Total equities 78.2 77.5 United Kingdom bond 1.1 1.0 European bonds 2.7 2.4 North American bonds 15.6 14.1 Net liquid assets 2.4 5.0 Total assets (before loans and debentures) 100.0 100.0 THE MONKS INVESTMENT TRUST PLC NOTES 31 October 2000 31 October 1999 30 April 2000 £'000 (restated) £'000 £'000 1. Income Income from investments and interest receivable 10,178 9,288 17,560 Other income 10 Nil Nil Return per ordinary share Revenue return 2,634 3,272 5,070 Capital return 25,983 5,174 130,200 Return per ordinary share is based on the above totals of revenue and capital and on 66,079,499 (31 October 1999 - 75,642,681 and 30 April 2000 - 73,625,591) ordinary shares, being the weighted average number of ordinary shares in issue during the period. 3. The interim dividend will be paid on 1 February 2001 to all shareholders on the register at the close of business on 12 January 2001. 4. Loans and debentures include Euro50 million drawn down under short term multi-currency loan facilities (30 April 2000 - Euro50 million). Net asset value per share (after deducting prior charges at market value) was 1,231.1p (30 April 2000 - 1,178.3p). The market value of debenture stocks at 31 October 2000 was £93,878,000 (30 April 2000 - £98,220,000). 5. The Company's authority to buy back its own ordinary shares was renewed at the EGM on 18 April 2000 in respect of 10,166,048 ordinary shares (equivalent to 14.99% of its issued share capital at that date). In the six months to 31 October 2000 a total of 2,802,811 ordinary shares with a nominal value of £701,000 were bought back at a total cost of £29,741,000. At 31 October 2000 the Company had authority to buy back a further 7,363,237 ordinary shares. 6. The financial information for the year ended 30 April 2000 has been extracted from the full accounts which have been filed with the Registrar of Companies and which contain an unqualified Auditors' Report. 7. The accounting policies applied in calculating the interim figures are consistent with those used in the Annual Financial Statements. Franked dividends for the six months to 31 October 1999 have been restated and are accounted for in accordance with FRS16 'Current Tax', accounting for UK dividend income net of tax. This is consistent with the treatment adopted in the financial statements for the year ended 30 April 2000. The effect of the change in accounting policy is to reduce gross income and taxation equally by £388,000 for the six months to 31 October 1999; the net effect has no impact upon the revenue return attributable to equity shareholders. The Interim Report was approved by the Board on 28 November 2000.

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