Interim Results

Monks Investment Trust PLC 28 November 2006 THE MONKS INVESTMENT TRUST PLC Results for the six months to 31 October 2006 Monks net asset value per share(1) fell by 5.9%. Over the same period the FTSE World Index fell by 1.3%. • The principal reasons for performance being worse than the comparative index over this period were the large position in Japan and exposure to producers of oil and gas. In the previous twelve month period these two factors had been significant contributors to outperformance. • Exposure to Japan has been reduced but no significant changes have been made to the oil and gas holdings. Sales were also made from the North American equity element while additions were made to European equities. • Net liquid assets and bonds accounted for 14.6% of total assets at the end of the period compared to 6.6% at its start. • Earnings per share were 1.20p (0.57p in the corresponding period) and an interim dividend of 0.50p has been declared. Past performance is no guarantee of future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares. Investment in investment trusts should be regarded as medium to long-term. The Company has borrowed money to make further investments. This is commonly referred to as gearing. The risk is that, when this money is repaid by the Company, the value of these investments may not be enough to cover the borrowing and interest costs, and the Company makes a loss. If the Company's investments fall in value, gearing will increase the amount of this loss. The more highly geared the Company, the greater this effect will be. You can find up to date performance information about Monks on the Baillie Gifford website at www.bailliegifford.com. Monks, with net assets of £880 million, invests internationally in order to achieve capital growth. Monks is managed by Baillie Gifford & Co, the independent Edinburgh based fund management group with around £48 billion under management and advice as at 27 November 2006. 28 November 2006 - ends - For further information please contact: Gerald Smith, Manager The Monks Investment Trust PLC 0131 275 2000 (mobile) 07974 923758 Robert O'Riordan Baillie Gifford & Co 07730 412007 Mike Lord, Director Broadgate Marketing 020 7726 6111 THE MONKS INVESTMENT TRUST PLC Interim Report During the first half of the Company's financial year there were some relatively large movements in stockmarkets and currencies as markets digested mixed signals about the future direction of monetary policy, economic growth rates and inflation. There was a sharp correction at the start of the period from which most markets subsequently recovered in local currency terms. The strength of sterling against most other currencies offset this recovery in markets and over the period the FTSE World Index fell by 1.3% in sterling terms. Of the major markets, the UK market produced the best returns for sterling based investors during the first half of the year with a rise of 2.2% followed by Continental Europe, up 1.0%. The US market was almost unchanged with a rise in sterling terms of 0.2%. The performance of the Japanese market was extremely disappointing with a decline in local currency terms of 5.8% translating into a fall of 12.5% in sterling terms. Against this background, Monks net asset value, with borrowings deducted at fair value, fell by 5.9%, from 319.6p to 300.8p, at which level it was 10.5% ahead of the figure twelve months ago. The World Index was up 11.4% over the twelve months. There were two principal reasons for the underperformance. The first was the large position in Japan, which, as noted above, was the worst performing major market in sterling terms. We began the period with 21.3% of the fund in Japan compared to 10.5% in the index. This position was reduced as it became clear that Japanese domestic investors were unlikely to make substantial investments in their own equity market. With hindsight, it can be seen that a larger reduction would have been beneficial as the poor performance in the six months to October reversed part of the gains made in the previous year. The other major factor was the large exposure to producers of oil and gas, especially in North America and Emerging Markets. As with Japan, this is an area in which we have made substantial gains in earlier periods and a decline in the oil price from an exceptionally high level to one that is still elevated relative to the average of the past decade triggered a significant correction in oil and gas company shares. No significant changes were made to our investment in this sector. During the period we made net sales of £87m in North America and £26m in Japan. We made a net addition of £29m to Continental Europe. Transactions elsewhere in the portfolio were broadly in balance resulting in total net sales of equities of £84m. The analysis on page 5 shows how these transactions have altered the geographical and sectoral distributions. Net liquid assets and fixed interest holdings were almost equal to the value of borrowings at the end of the period mainly as a consequence of an increase in sterling deposits. Largely as a result of an increase in fixed interest and deposit income, earnings per share increased from 0.57p last year to 1.20p. The Board has declared a dividend of 0.50p, which will be paid in January 2007. The following is the interim statement for the six months ended 31 October 2006 which has been neither reviewed nor audited by the auditors. This statement is being printed and will be sent to all shareholders on 15 December 2006. 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) For the six months ended For the six months ended For the year ended 31 October 2006 31 October 2005 30 April 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Realised gains on - 75,917 75,917 - 18,663 18,663 - 64,466 64,466 investments Unrealised (losses)/gains - (134,617) (134,617) - 128,391 128,391 - 232,617 232,617 on investments Currency gains/(losses) - 5,608 5,608 - (4,760) (4,760) - (5,989) (5,989) Income (note 2) 10,590 - 10,590 8,006 - 8,006 20,085 - 20,085 Investment management fee (2,385) - (2,385) (2,052) - (2,052) (4,506) - (4,506) Other administrative (389) - (389) (453) - (453) (937) - (937) expenses Net return before finance costs and taxation 7,816 (53,092) (45,276) 5,501 142,294 147,795 14,642 291,094 305,736 Finance costs of (4,025) - (4,025) (3,491) - (3,491) (7,443) - (7,443) borrowings Return on ordinary activities before taxation 3,791 (53,092) (49,301) 2,010 142,294 144,304 7,199 291,094 305,756 Tax on ordinary (356) - (356) (363) - (363) (847) - (847) activities Return on ordinary activities after taxation 3,435 (53,092) (49,657) 1,647 142,294 143,941 6,352 291,094 297,446 Return per ordinary share (note 3) 1.20p (18.51p) (17.31p) 0.57p 48.98p 49.55p 2.20p 100.75p 102.95p Note: Dividends paid and proposed per ordinary share (note 4) 0.50p 0.50p 1.90p 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. A Statement of total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. THE MONKS INVESTMENT TRUST PLC SUMMARISED BALANCE SHEET (unaudited) At 31 October At 31 October At 30 April 2006 2005 2006 £'000 £'000 £'000 Fixed assets Investments 952,517 857,315 1,084,498 Current assets Debtors 3,119 2,339 12,024 Cash and short term deposits 87,498 6,830 29,089 90,617 9,169 41,113 Creditors Amounts falling due within one year (9,683) (3,919) (30,991) Net current assets 80,934 5,250 10,122 Total assets less current liabilities 1,033,451 862,565 1,094,620 Loans and debentures (note 5) (153,759) (79,435) (159,422) 879,692 783,130 935,198 Capital and reserves Called-up share capital 14,334 14,368 14,368 Share premium 11,100 11,100 11,100 Capital redemption reserve 5,064 5,030 5,030 Capital reserve - realised 594,007 474,317 519,996 Capital reserve - unrealised 233,636 259,453 362,574 Revenue reserve 21,551 18,862 22,130 Equity shareholders' funds 879,692 783,130 935,198 Net asset value per ordinary share (after deducting borrowings at fair value) 300.8p 265.9p 319.6p Net asset value per ordinary share (after deducting borrowings at par) 306.7p 272.3p 325.3p Ordinary shares in issue (note 6) 286,670,295 287,360,295 287,360,295 THE MONKS INVESTMENT TRUST PLC RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (unaudited) For the six months ended 31 October 2006 Capital Capital Capital Total redemption reserve - reserve - shareholders' Share Share reserve realised unrealised Revenue funds capital Premium reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 May 2006 14,368 11,100 5,030 519,996 362,574 22,130 935,198 Return on ordinary activities after taxation - - - 75,846 (128,938) 3,435 (49,657) Shares bought back + (34) - 34 (1,835) - - (1,835) Dividends paid during the period# - - - - - (4,014) (4,014) Shareholders' funds at 31 October 2006 14,334 11,100 5,064 594,007 233,636 21,551 879,692 For the six months ended 31 October 2005 Capital reserve - Capital realised Capital Total redemption reserve - shareholders' Share Share reserve £'000 unrealised Revenue funds capital Premium reserve £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 May 2005 14,568 11,100 4,830 468,408 132,270 20,705 651,881 Return on ordinary activities after taxation - - - 15,111 127,183 1,647 143,941 Shares bought back (200) - 200 (9,202) - - (9,202) Dividends paid during the period# - - - - - (3,490) (3,490) Shareholders' funds at 31 October 2005 14,368 11,100 5,030 474,317 259,453 18,862 783,130 For the year ended 30 April 2006 Capital reserve - Capital realised Capital Total redemption reserve - shareholders' Share Share reserve £'000 unrealised Revenue funds capital Premium reserve £'000 £'000 £'000 £'000 £'000 £'000 Shareholders' funds at 1 May 2005 14,568 11,100 4,830 468,408 132,270 20,705 651,881 Return on ordinary activities after taxation - - - 60,790 230,304 6,352 297,446 Shares bought back (200) - 200 (9,202) - - (9,202) Dividends paid during the year# - - - - - (4,927) (4,927) Shareholders' funds at 30 April 2006 14,368 11,100 5,030 519,996 362,574 22,130 935,198 + See note 6. # See note 4. THE MONKS INVESTMENT TRUST PLC SUMMARISED CASH FLOW STATEMENT (unaudited) Six months to 31 October Six months to Year to 2006 31 October 2005 30 April £'000 £'000 2006 £'000 Net cash inflow from operating activities 10,382 7,165 12,669 Net cash outflow from servicing of finance (4,037) (3,475) (6,971) Total tax paid (381) (359) (779) Net cash inflow/(outflow) from financial investment 58,294 (39,580) (96,338) Equity dividends paid (4,014) (3,490) (4,927) Net cash inflow/(outflow) before use of liquid resources and 60,244 (39,739) (96,346) financing Net cash (outflow)/inflow from use of liquid resources (40,000) 18,000 18,000 Shares bought back (1,835) (9,202) (9,202) Net cash inflow from bank loans - - 78,866 Increase/(decrease) in cash 18,409 (30,941) (8,682) Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the period 18,409 (30,941) (8,682) Increase/(decrease) in short term deposits 40,000 (18,000) (18,000) Net inflow from bank loans - - (78,866) Exchange movement on bank loans 5,679 - (1,105) Other non-cash changes (16) (16) (32) Movement in net debt in the period 64,072 (48,957) 106,685 Net debt at start of the period (130,333) (23,648) (23,648) Net debt at end of the period (66,261) (72,605) (130,333) Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities Net return before finance costs and taxation (45,276) 147,795 305,736 Net losses/(gains) on investments 58,700 (147,054) (297,083) Currency (gains)/losses (5,608) 4,760 5,989 Amortisation of fixed income book cost (435) - (22) Changes in debtors and creditors 2,966 1,958 (1,568) Income tax refunded/(incurred) 35 (294) (383) Net cash inflow from operating activities 10,382 7,165 12,669 THE MONKS INVESTMENT TRUST PLC THIRTY LARGEST EQUITY HOLDINGS at 31 October 2006 (unaudited) Market % of value total £'000 assets Name Region Business Baillie Gifford Pacific Fund Asia Pacific Investment fund 71,030 6.9 Petrobras Other Emerging Markets Integrated oil 30,015 2.9 Ecana North America Oil and gas exploration 23,454 2.3 Schlumberger North America Oilfield services 22,402 2.2 EOG Resources North America Natural gas 21,772 2.1 Baillie Gifford Japanese Smaller Japan Investment fund 21,544 2.1 Companies Sasol Other Emerging Markets Oil and gas 17,540 1.7 Atlas Copco Continental Europe Engineering 15,699 1.5 Investor B Continental Europe Investment company 15,244 1.5 Baillie Gifford British Smaller United Kingdom Small companies fund 14,402 1.4 Companies Suncor Energy North America Integrated oil 14,387 1.4 Moody's North America Bond rating agency 13,481 1.3 Nissan Motor Japan Car manufacturer 12,410 1.2 Total Fina Elf Continental Europe Integrated oil 11,883 1.1 Mitsubishi UFJ Japan Banking 11,789 1.1 Canon Japan Copiers and cameras 11,746 1.1 Royal Bank of Scotland United Kingdom Banking 11,575 1.1 Altria North America Tobacco and food 11,355 1.1 Barclays United Kingdom Banking 11,323 1.1 GlaxoSmithKline United Kingdom Ethical pharmaceuticals 11,116 1.1 BHP Billiton Asia Pacific Diversified resources 10,616 1.0 Mitsui Osk Lines Japan Shipping 10,198 1.0 Svenska Handelsbanken Continental Europe Retail banking 10,156 1.0 Northern Rock United Kingdom Mortgage banking 10,050 1.0 Petrochina Asia Pacific Oil and gas production 9,665 0.9 Omnicom North America Advertising agency 9,462 0.9 GBL Continental Europe Investment company 9,230 0.9 Asahi Glass Japan Glass 9,043 0.9 Wolseley United Kingdom Builders' merchant 9,030 0.9 Mitsui Sumitomo Insurance Japan Insurance company 8,263 0.8 469,880 45.5 DISTRIBUTION OF ASSETS (unaudited) At 31 October At 30 April 2006 2006 % % Equities: United Kingdom 14.6 13.1 Continental Europe 12.9 9.6 North America 24.1 32.4 Japan 17.1 21.3 Asia Pacific 10.8 11.1 Other Emerging Markets 5.9 5.9 Total equities 85.4 93.4 Bonds 6.8 5.7 Net liquid assets 7.8 0.9 Total assets (before deduction of borrowings) 100.0 100.0 THE MONKS INVESTMENT TRUST PLC NOTES 1. The financial statements for the six months to 31 October 2006 have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 30 April 2006. The Interim Report was approved by the Board on 28 November 2006. 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 October 31 October 30 April 2006 2005 2006 £'000 £'000 £'000 2. Income Income from investments and interest receivable 8,681 7,955 19,994 Other income 1,909 51 91 3. Return per ordinary share Revenue return 3,435 1,647 6,352 Capital return (53,092) 142,294 291,094 Return per ordinary share is based on the above totals of revenue and capital and on 286,768,746 (31 October 2005 - 290,493,311; 30 April 2006 - 288,939,679) ordinary shares, being the weighted average number of ordinary shares in issue during each period. 4. Dividends Amounts recognised as distributions in the period: Pervious year's final dividend of 1.40p (2005 - 1.20p), paid 4 August 2006 4,014 3,490 3,490 Interim dividend (2005 - 0.50p), paid 31 January 2006 - - 1,437 4,014 3,490 4,927 Dividends paid and proposed in the period: Adjustment to provision for previous year's (9) (6) (6) final dividend re shares bought back Interim dividend of 0.50p (31 October 2005 and 30 April 2006 - 0.50p) 1,433 1,437 1,437 Final dividend (30 April 2006 - 1.40p) - - 4,023 1,424 1,431 5,454 The interim dividend was declared after the period end date and has therefore not been included as a liability in the balance sheet. It is payable on 31 January 2007 to shareholders on the register at the close of business on 12 January 2007. The ex dividend date is 10 January 2007. THE MONKS INVESTMENT TRUST PLC NOTES (Ctd) 5. The fair value of loans and debentures at 31 October 2006 was 171.0m (31 October 2005 - £98.4m; 30 April 2006 - £176.3m). 6. During the period under review the Company bought back 690,000 ordinary shares with a nominal value of £34,500 for a total consideration of £1,835,000. At 31 October 2006 the Company had the authority to buy back a further 42,916,620 shares. 7. Transaction costs incurred on the purchase and sale of the investments are added to the purchase cost or deducted from the sale proceeds, as appropriate. During the period, transaction costs on purchases amounted to £252,000 (31 October 2005 - £153,000; 30 April 2006 - £387,000) and transaction costs on sales amounted to £221,000 (31 October 2005 - £62,000; 30 April 2006 - £176,000). 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 April 2006 has been extracted from the statutory accounts, which have been filed with the Registrar of Companies. The accounts contain an unqualified Auditors' Report and do not contain a statement under sections 237 (2) or (3) of the Companies Act 1985. (1) With borrowings at fair value. This information is provided by RNS The company news service from the London Stock Exchange MMMTBLF

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