Final Results
MURRAY INCOME TRUST PLC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2008
1. CHAIRMAN'S STATEMENT
Performance
In my statement last year, I was relatively cautious about the outlook for 2007-2008, anticipating very low but positive returns from the market. In the event, this has turned out to be considerably over-optimistic. The NAV total return for your Company fell by 19.9% compared with a fall of 12.9% for the FTSE All-Share Index. The tightening of credit through the damage done to banks' balance sheets by imprudent lending, especially in the housing sector and through structured credit, has meant that economic growth worldwide has fallen well below earlier expectations.
Several countries are now in recession, though the United States appears so far to have been saved statistically from this fate by a curious combination of very strong net exports and an implausibly low GDP deflator. Britain, however, almost certainly is in recession though, as with the US, it may be mitigated by swings in net exports following the weakness of Sterling. The Bank of England's response has been muted due to concerns about inflation, even though this is likely to be an historic problem.
Most of the trends in the market reversed during the year. Equity withdrawal, which had been a major source of strength, came to an end, and was replaced by large calls for capital, especially from banks, to replace the capital base which they had lost. The Oil & Gas and Mining sectors provided the only positive returns. Unfortunately, the latter is relatively low-yielding, which makes it difficult for us to participate fully in it. The consequent underweighting was a significant source of the underperformance relative to the Index. At the same time, the market was implacably hostile to any company with weakness either in its balance sheet or business profile. This led to particularly savage falls in the banks, especially mortgage banks, anything related to property, and much of the consumer discretionary sector. Towards the end of the period, there was some reversal of those movements, as mining companies' investors realised that they would not be unaffected by a sharp slowdown in growth, and value buyers emerged for some of the sold-off sectors.
Dividends
As one would expect given the more difficult earnings environment, short term dividend growth has fallen across the market as a whole. Consensus dividend growth expectations for calendar 2008 are now 1.9%. However, within the portfolio income generation has remained relatively robust. The Directors are therefore proposing a final dividend of 11.25 pence per share payable on 6 November 2008 to Shareholders on the register on 3 October 2008, making total dividends for the year of 27 pence. This represents an overall increase for the year of 11.3%, the twenty-third consecutive year in which the dividend has increased. Looking forward, dividend growth for the current financial year will be more muted. Consensus expectations are for growth of 4.8%, which may, however, prove to be too optimistic. Nonetheless, the Directors have decided to increase the rate at which interim dividends will be paid to 5.5 pence. The rate of the final dividend will be decided when the results for the year are known. However, the Directors currently expect total dividends for this year to be at least equal to those paid for the year ending 30 June 2008.
VAT on management fees
HM Revenue and Customs, on 5 November 2007, accepted the European Court of Justice ruling in the case brought by JPMorgan Claverhouse Investment Trust against them. It is probable that some of the VAT suffered in the past on its investment management fees will be recoverable. Appropriate steps have been taken to protect the Company's position in this respect. Since a number of legal and procedural matters need to be resolved, no asset is, as yet, being recognised. The Company will make an announcement once these matters are resolved.
Annual General Meeting
The Annual General Meeting will be held at the Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow G2 3NY on Wednesday, 5 November 2008 at 12.30 p.m.
This year, the Directors are proposing to make certain amendments to the Company's Articles of Association as a result of the Companies Act 2006. Details of the amendments are set out in the notes to the Notice of Annual General Meeting.
As at previous AGMs, there will be a presentation by the Managers and an opportunity to meet the Directors over lunch following the AGM.
Outlook
The UK economy remains in a difficult position with high levels of government and personal debt, falling house prices and low consumer confidence. The recent fall in the oil price should help provide relief from the unwelcome inflationary forces that have resurfaced over the past year or so. Positively, to date, the second-round inflationary effects, for example, on average wages, have been muted. However, the Bank of England still has very limited room to reduce interest rates in order to spur economic growth, though it will receive some help from the fall in Sterling against both the US dollar and the Euro. Internationally, growth in emerging markets has remained relatively strong, but high inflation rates suggest sterner action is required to reduce growth. The Eurozone, in contrast, is suffering from the lack of competitiveness of several major members.
At the moment, the most positive aspects of the equity market are that it is totally unloved and appears cheap, even on gloomy company forecasts. Both these characteristics are extremely useful, and may mean that we are at, or close to, a low for markets. However, there is clearly a lot of bad news ahead, as the effects of the contraction in bank lending work through the economy both via consumers and companies. There are beginning to be signs that this has been discounted, but individual companies' share prices still react surprisingly badly to rather predictable news. It is hard to know what this might mean for capital returns in the current year.
The timing of any improvement is difficult to predict. Monetary policy will have to act alone, since fiscal policy cannot really be deliberately eased from its present position. It has long leads and lags, and hasn't really been eased yet due to the perverse interaction of official policy and the balance sheets of the banking sector. 2009 therefore seems likely to be another difficult year, economically.
In previous recessions, dividends have come under great pressure. We have, therefore, modelled several scenarios for dividends. At present, even the most pessimistic leave our ability to pay a maintained dividend at least intact. The Company does, in addition, have substantial revenue reserves. This should be a source of support for your Company, even when profits are under pressure.
Patrick Gifford
Chairman
16 September 2008
2. MANAGER'S REVIEW
Background
The UK equity market performed poorly during the year to the end of June 2008. Following four years of high returns, the FTSE All-Share Index fell by 12.9% with the environment particularly challenging for income-seeking investors. The so called 'credit crunch' - essentially a dramatic reduction in the availability of debt finance - resulted in significantly higher costs for borrowers. In addition, a sharp increase in the price of many commodities, including oil, led to inflationary pressure making the backdrop for equities even tougher.
Volatility has been a significant feature of the market over the year, initially caused by concerns over the ability of the holders of lower-quality mortgages in the United States to meet their payments. The collapse of two hedge funds run by Bear Stearns in July 2007 brought the issue to the fore and led to a broad reappraisal of risk as credit spreads widened. The resulting market fall was cushioned by a reduction in US interest rates by the Federal Reserve Bank, and the prospect of a looser monetary environment prompted the market to recover sharply, peaking for the year in October. The remainder of 2007 and beginning of 2008 witnessed further market weakness as problems in financial markets spilled over to the real economy. LIBOR rates (the interest rate at which banks borrow from each other) became elevated, as banks withdrew credit availability to protect their balance sheets. In the UK, the inability to source external funds was the ultimate reason for the collapse of Northern Rock and its subsequent nationalisation. In the US the takeover of Bear Stearns by JPMorgan Chase was announced in March for similar reasons. Coordinated central bank intervention at the beginning of April helped to relieve some of the pressure and the market rebounded from the March lows. However, this optimism was reversed quickly as oil prices rose, reaching $140 at the end of the period, and limiting the opportunity for Central Banks to reduce interest rates to promote growth. As a consequence, the market fell sharply over the last six weeks of the period.
In the UK, at the start of the period, economic conditions had appeared relatively healthy and the Bank of England increased interest rates to 5.75% in July, citing a need to reduce the growth rate of total demand. However, over the autumn, the macroeconomic picture began to deteriorate, with survey data providing a more pessimistic outlook of future growth. Consumer confidence started to decline rapidly, reflecting weakness in the housing market where prices, compounded by a lack of mortgage availability, had begun to fall on a month on month basis. The increase in oil and soft commodity prices provided a challenging backdrop for the Bank of England as it tried to balance the polarising factors of increased inflation and lower growth prospects. Interest rates were subsequently progressively reduced, reaching 5.0% in April. The end of the period witnessed continued weakness, with Q2 2008 GDP growth of 0.2%, the lowest quarter on quarter growth for three years, and the Consumer Price Index rising to 3.8% in June, its highest level for 11 years.
During the period, the level of merger and acquisition broadly reduced in line with the availability of funding. However, the Company benefited from bids for Kelda from Saltaire Water, Resolution from Pearl, Scottish & Newcastle from a Carlsberg/Heineken joint venture and Emap by Guardian Media Group, all announced during the first half of the year. In addition, towards the end of the period Rio Tinto was the recipient of an approach from BHP Billiton. Following a period of equity withdrawal where capital has been retired from the market, this has now reversed with the recapitalisation of parts of the Bank sector a major contributing factor. Mid- and Smaller-cap companies underperformed, due to their greater exposure to domestic earnings and a lower weighting in commodity-related companies than the FTSE 100.
Performance
The Company generated a negative total return of 19.9% in the 12 months to 30 June 2008 compared to a fall in the FTSE All-Share Index of 12.9%, a disappointing result both in absolute and relative terms. The reasons for this are explained below.
Sector Allocations for the year to 30 June 2008
|
|
2008 |
|
|
% |
|
Net asset value total return for year per Ordinary share |
(19.9) |
|
FTSE All Share Index total return |
(12.9) |
|
|
__________ |
|
Relative return |
(7.0) |
|
|
__________ |
|
Analysis of relative return |
|
|
Stock selection (equities) |
|
|
Oil & Gas |
(0.6) |
|
Basic Materials |
0.3 |
|
Industrials |
0.2 |
|
Consumer Goods |
(1.6) |
|
Health Care |
0.1 |
|
Consumer Services |
1.9 |
|
Telecommunications |
- |
|
Utilities |
(0.2) |
|
Technology |
- |
|
Financials |
0.5 |
|
|
__________ |
|
Total stock selection (equities) |
0.6 |
|
|
__________ |
|
Asset allocation (equities) |
|
|
Oil & Gas |
(1.2) |
|
Basic Materials |
(2.5) |
|
Industrials |
0.1 |
|
Consumer Goods |
(0.2) |
|
Health Care |
0.1 |
|
Consumer Services |
(1.5) |
|
Telecommunications |
(0.5) |
|
Utilities |
(0.1) |
|
Technology |
0.1 |
|
Financials |
(0.6) |
|
|
__________ |
|
Total asset allocation (equities) |
(6.3) |
|
|
__________ |
|
Non-equity Investments & Options |
0.6 |
|
Gearing / cash effect |
(1.5) |
|
Management fees & other expenses |
(0.8) |
|
Residual effect |
0.4 |
|
|
__________ |
|
Total |
(7.0) |
|
|
__________ |
|
|
|
Sources : Aberdeen Asset Management, Mellon & Factset
Notes: Stock Selection - measures the effect of equity selection relative to the benchmark. Asset Allocation - measures the impact of over or underweighting each industry basket in the equity portfolio, relative to the benchmark weights. Non-equity Investments & Options effect - measures the impact on relative returns of the two asset categories. Gearing / cash effect - measures the impact on relative returns of net borrowings. Management fees & other expenses - these reduce total assets and therefore reduce performance. The effect is calculated by dividing expenses incurred during the year by average total assets less current liabilities. Residual effect - this arises as a result of the different methodologies of calculating performance between the NAV total return, the benchmark provider Factset and the performance attribution system
Over the year, sector performance across the market as a whole was unusually polarised. Indeed, excluding Oil & Gas and Basic Materials from the FTSE All-Share Index reveals that the market peaked in February 2007 and has subsequently fallen 40%. Only Oil & Gas and Basic Materials generated a positive return over the year. The Company has maintained a sizeable underweight position in Mining where dividend yields are very low and valuations are high. This has also been the case with the oil sector as we do not aim to replicate the high weights of BP and Shell in the FTSE All-Share Index. Both of these sector positions have hurt performance relative to the benchmark as shown on the table above.
Within the broad Basic Materials sector, Mining shares performed very strongly in reaction to rising commodity prices. Although the oil price rose dramatically, the greatest beneficiaries within the Oil sector from a share price perspective were the smaller explorers and oil services companies rather than the large integrated majors. Significant underperformance was a feature of Consumer Services, given the domestic economic exposure, and Banks, where diminishing capital ratios provided cause for concern.
As mentioned above the Company benefited from takeover approaches for Kelda, Resolution, Scottish & Newcastle and Emap. Other highlights included the performance in the Oil & Gas sector of Venture Production and AMEC, the latter a beneficiary of increased capital expenditure by the oil majors. Similarly, our holding in Weir in the Industrial Engineering sector performed strongly driven by sales of equipment it manufactures for the Mining industry. The Mining holdings themselves, Rio Tinto and Anglo American, generated strong performances.
Unfortunately, there were a number of holdings that performed poorly over the year. Premier Foods' profits were hurt by a significant rise in the cost of wheat. There were also concerns over the amount of debt on its balance sheet. Barratt Developments' acquisition of Wilson Bowden proved to be ill-timed given the problems in the housing market and the share price fell dramatically over the year. The housing downturn in the United States also damaged Wolseley, where, despite extensive efforts to reduce the cost base, profitability was severely affected. Amongst the Banks, both Barclays and Royal Bank of Scotland were sold down heavily as the credit crisis deteriorated.
Portfolio Activity and Structure
Commensurate with our patient buy and hold strategy, the portfolio has undergone only a modest level of change during the past year. However, during the period a number of new holdings were added to the portfolio. We introduced a position in Daily Mail and General Trust, which has an attractive business to business operation and appealing valuation; and Close Brothers, which has a diversified earnings base and good dividend yield. These were funded partly through the sale of Mitchells & Butlers, where we became increasingly concerned that the valuation was stretched.
We added Whitbread, now predominantly a budget hotel company with significant asset backing, to the Trust. In addition, we purchased a holding in Tesco: the company has attractive international growth prospects and opportunities to increase sales in the UK, coupled with a strong balance sheet. Finally, we introduced a holding in Dunedin Smaller Companies Investment Trust, which is managed by Aberdeen. This trust provides broad small cap exposure and generates a healthy dividend yield. It was purchased at a generous discount at a time when the underlying holdings offered attractive long-term value. These purchases were funded from companies that had been the subject of takeovers including Resolution and Kelda. Furthermore, towards the end of the period we sold Barratt Developments as we did not feel that the risk reward ratio was attractive. The company had been severely affected by the downturn in the housing market at a time when its debt-funded purchase of Wilson Bowden had left its balance sheet vulnerable to external shocks.
Throughout the period, we maintained our policy of recycling capital from some of the stronger performers into areas of weakness. To that end, Rio Tinto, Anglo American, BP, Shell, AMEC, Weir and HSBC amongst others, were reduced to fund top-ups in more attractively-valued companies such as AstraZeneca, GKN, Centrica, National Grid and Premier Foods. Weakness in consumer-related investments, such as Kesa, Mothercare and Ladbrokes, provided the opportunity to increase our exposure.
We increased the gearing of the Trust twice, each time by £5m during the market falls in August and January. In addition, although we maintained a degree of put protection throughout the period, we crystallised profits on a number of occasions and rolled forward the protection at lower market levels where we felt appropriate. This provided further funding for a number of top-ups.
The proceeds from the BT and Vodafone reverse convertibles were reinvested on expiry into their ordinary shares, while the BATS reverse convertible was rolled forward for a further twelve months. Reverse convertibles, or equity-linked notes, provide an uplift in yield and will also help use part of the Company's off-balance sheet tax asset in years when taxable income exceeds expenses.
The result of the actions above have marginally altered the sector positioning of the Trust. The weighting in the Oil & Gas sector has increased slightly over the period, mainly as a function of the strong relative performance of the sector as a whole. The exposure to the Basic Materials sector has fallen despite the strong performance as the holdings have been reduced as profits were taken.
The exposure to the Consumer Goods sector has decreased slightly reflecting the sale of Scottish & Newcastle and the return of cash from Aga following the sale of their foodservice division. The Healthcare weight has increased due to purchases of AstraZeneca.
The sector weight of Consumer Services has also increased, despite the sale of Emap, given the introduction of Daily Mail and General Trust, Whitbread and Tesco and additions to some of the weaker performers.
The weight in Financials has fallen, due to the underperformance of the Bank sector, with the purchase of Close Brothers, Dunedin Smaller Companies Investment Trust and the Royal Bank of Scotland rights issue only partly offsetting the sale of Resolution and reductions to HSBC.
Income
Following a period of strong dividend enhancement, unsurprisingly, expectations for dividend growth have weakened considerably as the credit crunch has taken effect. In aggregate, dividends are estimated to increase by 1.9% for calendar 2008. However, the dividend payout ratio for the market still remains below historical levels as companies have tended to act conservatively as earnings have increased over recent years. This provides a degree of comfort as earnings come under pressure.
For the financial year ended 30 June 2008, the Company has witnessed a healthy increase in income with the revenue return per share rising from 24.7p to 29.3p, or 18.6%.
There have been disappointments from an income perspective, with a number of holdings cutting their dividends, for example Friends Provident and Premier Foods. However, there have also been positive surprises, when BP and British American Tobacco announced substantially higher dividends, for example. We continue to keep a very close watch on the revenue account but, having modelled our revenue forecast on a conservative basis, remain relatively comfortable with the income characteristics of the underlying portfolio. The dividend cover of the holdings in the portfolio is now approximately 2 times. The consensus expectation for dividend growth during 2009 for the FTSE All-Share Index is currently 7.7%.
Outlook
At the time of writing, although oil prices have fallen from peak levels, the Bank of England continues to walk a tightrope as it tries to balance the prospects of lower growth and higher inflation. This has been made more difficult as inflation expectations have witnessed a pronounced move upwards. The Governor of the Bank of England, Mervyn King, expects the current period of above-target inflation to be temporary and for this to be the case it is imperative that expectations do not lead to a negative cycle of second round effects. So far, wage growth remains relatively subdued and it seems likely that although inflation will rise substantially above the target level over the coming months, it will ease back towards 2% during 2009. However, the outlook for the UK economy remains difficult with consumer confidence hit by falling house prices and the Chancellor does not have the luxury of being able to increase government spending to cushion the impact as public finances are in a relatively weak position.
Sentiment is likely to remain fragile and the market volatile for the foreseeable future. However, to a large extent valuations have already priced in a sharp slowdown for the domestic economy. Indeed, we believe the current market weakness has presented interesting opportunities in well-financed attractive yielding companies for patient longer term investors. We would expect merger and acquisition activity to return as sovereign wealth funds and private equity funds look to deploy capital towards these attractive assets. With the FTSE All-Share Index currently trading on a P/E ratio of 11.3 times and a dividend yield of 4.1%, while mindful of the risks ahead, we remain positive on the longer term outlook for UK equities.
Aberdeen Asset Managers Limited
16 September 2008
3. RESULTS
|
|
30 June |
30 June 2007 |
% |
|
Total assets |
£440,536,000 |
£552,617,000 |
-20.3 |
|
Equity shareholders' interest |
£400,536,000 |
£522,617,000 |
-23.4 |
|
Net asset value per Ordinary share |
619.9p |
802.3p |
-22.7 |
|
Share price of Ordinary share (mid) |
544.0p |
696.0p |
-21.8 |
|
Discount to net asset value on Ordinary shares{A} |
9.5% |
11.7% |
|
|
|
|
|
|
|
Gearing (ratio of borrowing to shareholders' funds) |
|
|
|
|
Actual gearing ratio |
8.4% |
5.3% |
|
|
Potential gearing ratio |
10.0% |
5.7% |
|
|
|
|
|
|
|
Dividends and earnings |
|
|
|
|
Revenue return per share |
29.3p |
24.7p |
+18.6 |
|
Dividends per share{B} |
27.00p |
24.25p |
+11.3 |
|
Dividend cover |
1.09 times |
1.02 times |
|
|
Revenue reserves{C} |
£25,782,000 |
£22,884,000 |
|
|
|
|
|
|
|
Operating costs |
|
|
|
|
Total expense ratio |
0.8% |
0.8% |
|
{A} These discounts are lower than the numbers that appear in the statutory accounts because they are
calculated using capital only net asset values.
{B} The figures for dividends per share reflect the years in which they were earned (see note 6).
{C} The revenue reserve figure does not take account of the proposed third interim and final dividends
amounting to £3,397,000 and £7,266,000 respectively (2007 - third interim and final dividends amounting
to £3,257,000 and £6,015,000 respectively).
Performance (total return)
|
|
1 year |
3 years |
5 years |
10 years |
|
|
% return |
% return |
% return |
% return |
|
Share Price |
-18.8 |
10.6 |
56.9 |
56.9 |
|
Net Asset Value |
-19.9 |
13.1 |
66.0 |
53.5 |
|
|
|
|
|
|
Source: Aberdeen Asset Management, Fundamental Data
Dividends
|
|
Rate |
xd date |
Record date |
Payment date |
|
1st interim 2008 |
5.25p |
12 December 2007 |
14 December 2007 |
18 January 2008 |
|
2nd interim 2008 |
5.25p |
12 March 2008 |
14 March 2008 |
18 April 2008 |
|
3rd interim 2008 |
5.25p |
11 June 2008 |
13 June 2008 |
18 July 2008 |
|
Proposed final 2008 |
11.25p |
1 October 2008 |
3 October 2008 |
6 November 2008 |
|
Total dividends 2008 |
27.00p |
|
|
|
Ten Year Financial Record
|
Year end |
1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
|
Total revenue (£'000) |
16,390 |
15,210 |
16,808 |
15,384 |
16,041 |
16,827 |
16,533 |
17,237 |
19,251 |
22,390 |
|
Per Ordinary share |
|
|
|
|
|
|
|
|
|
|
|
Net revenue return (p) |
15.7 |
14.7 |
17.4 |
18.0 |
18.7 |
19.6 |
20.0 |
21.8 |
24.7 |
29.3 |
|
Dividends (p) |
15.35 |
15.75 |
16.20 |
17.00 |
17.75 |
18.25 |
19.15 |
21.60 |
24.25 |
27.00 |
|
Net asset value per Ordinary/B Ordinary share (p){A} |
542.4 |
567.0 |
611.9 |
541.3 |
433.8 |
496.2 |
603.3 |
699.7 |
802.3 |
619.9 |
|
Shareholders' funds (£'000) |
468,421 |
442,282 |
435,145 |
380,035 |
304,529 |
345,138 |
404,601 |
456,714 |
522,617 |
400,536 |
{A} All B Ordinary shares were converted to Ordinary shares during the year ended 30 June 2002.
Total revenue returns per Ordinary share have been based on the average number of Ordinary shares in issue during each year (see note 8).
Net Asset Values per Ordinary and B Ordinary share have been calculated after deducting prior capital at nominal values and have been adjusted for the annual B Ordinary scrip issues.
The 1999 dividend per share does not include the special component of 0.75p to compensate for lack of tax credit on the first interim dividend.
The Net Asset Value figure for 2005 has been restated to reflect the changes in accounting policies (FRS 26 - 'Financial Instruments: Recognition and Measurement'; FRS 21 - 'Events after the Balance Sheet Date').
The figures for dividends reflect the dividends for the years in which they were earned.
Please note that past performance is not a guide to future performance.
4. BUSINESS REVIEW
Investment Objective
The Company aims to achieve a high and growing income combined with capital growth through investment in a portfolio of UK equities.
Benchmark
The Company's benchmark is the FTSE All-Share Index.
Investment Policy
The Company pursues a policy of investing in shares of United Kingdom companies that have potential for real earnings and dividend growth, while at the same time providing an above-average portfolio yield. The emphasis is on the management of risk and on the absolute return from the portfolio, which is achieved by ensuring an appropriate diversification of stocks and sectors, with a high proportion of its assets in strong, well-known companies. The Company makes use of low-cost, flexible borrowing facilities to enhance Shareholder returns when appropriate.
The Company maintains a highly-diversified portfolio of investments, typically comprising in the region of 30 to 70 holdings (but without restricting the Company from holding a more or less concentrated portfolio from time to time). The Company is unconstrained as to the market sectors in which it may invest.
The Company invests primarily in the equity securities of large, well-known UK companies with an emphasis on investing in quality companies with good management, strong cash flow and a sound balance sheet, and which are generating a reliable earnings stream.
The Company may use derivatives for the purpose of enhancing portfolio returns and for hedging purposes in a manner consistent with the Company's broader investment policy.
It is the Company's policy to invest no more than 15 per cent of its gross assets in other listed investment companies (including investment trusts). The Company complies with section 842 of the Income and Corporation Taxes Act 1988 and does not invest more than 15% of its assets in the shares of any one company.
The Board is responsible for setting the gearing policy of the Company and for the limits on gearing. The Manager is responsible for gearing within the limits set by the Board. The Board has set its gearing limits at a maximum of 25%. Gearing is used selectively to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. Particular care is taken to ensure that any bank covenants permit maximum flexibility of investment policy.
Significant changes to gearing levels will be communicated to Shareholders.
Achieving the Investment Policy
The Directors are responsible for determining the investment policy and the investment objective of the Company, while day to day management of the Company's assets has been delegated to Aberdeen Asset Managers Limited. The Manager invests in a diversified range of companies throughout the Investment Region, following a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value, concentrating on quality first, then price. Top-down investment factors are secondary in the Manager's portfolio construction, with diversification rather than formal controls guiding stock and sector weights. The Manager is authorised to invest up to 15% of the Company's gross assets in any single stock. Currently, the top five holdings may not exceed 40% of the total value of the portfolio, and the top three sectors represented in the portfolio may not exceed 50%. The Manager is permitted to invest in options and in structured products, provided that any structured product issued in the form of a note or bond has a minimum credit rating of 'A'.
A detailed description of the investment process and risk controls employed by the Manager is set out in the Annual Report and Accounts, along with the portfolio at the year end and its analysis. At the year end the Company's portfolio consisted of 49 holdings (including one fixed-interest security and a put option). The twenty largest portfolio holdings are shown below.
Capital Structure
The Company's issued share capital as at 30 June 2008 consisted of 64,617,458 Ordinary shares of 25p and 1,799,000 Ordinary shares held in treasury. At 12 September 2008, the issued share capital consisted of 64,589,485 Ordinary shares of 25p and 1,827,000 Ordinary shares held in Treasury.
Total Assets and Net Asset Value
At 30 June 2008, the Company had Total Assets of £440.5m and a Net Asset Value per Ordinary share of 619.9p.
Borrowings
The borrowings at 30 June 2008 of £40 million represent 10% of Net Assets. Borrowing facilities of £45 million are committed to the Company until 1 October 2009. Financial covenants contained within the loan agreement provide, inter alia, that borrowings shall at no time exceed 45% of Net Assets, and that the Net Assets must exceed £225 million. The Net Assets were £400.5 million at 30 June 2008.
If any of the financial covenants are breached the Lender is entitled, following the serving of notice to the Company, to declare the loans and all accrued interest, fees and other sums owed under the agreements to be immediately due and repayable.
Duration
The Company does not have a fixed life.
Risk
The UK equity market is volatile and short-term movements may therefore be greater than justified by longer term trends. The use of gearing is likely to lead to an increase in the volatility of the Company's Net Asset Value. Currently, 50% of the investment management fees and interest costs are charged to capital. This increases distributable income at the expense of capital growth which will be reduced to the same extent. The policy of investing in higher-yielding shares may also diminish capital growth. There is no guarantee that the market price of investment trust shares will accurately reflect their underlying Net Asset Value or move in line with it.
5. STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with in accordance with United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law).
The Directors are required to prepare financial statements for each financial year which present fairly the financial position of the Company and the financial performance and cash flows of the Company for that period. In preparing those financial statements, the Directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and estimates that are reasonable and prudent; and
-
state that the Company has complied with applicable UK accounting standards, subject to any material departures disclosed and explained in the financial statements.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.
The financial statements are published on www.murray-income.co.uk, which is a website maintained by the Company's Manager. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the Directors confirms that to the best of their knowledge:
-
the financial statements, prepared in accordance with the applicable UK accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
-
the Directors' Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face.
For and on behalf of the Board of Murray Income Trust PLC
Adrian Coats
Chairman of the Audit Committee
16 September 2008
MURRAY INCOME TRUST PLC
INCOME STATEMENT
|
|
|
Year ended 30 June 2008 |
Year ended 30 June 2007 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
(Losses)/gains on investments |
9 |
- |
(119,233) |
(119,233) |
- |
67,500 |
67,500 |
|
Income |
2 |
22,390 |
- |
22,390 |
19,251 |
- |
19,251 |
|
Investment management fees |
3 |
(1,291) |
(1,291) |
(2,582) |
(1,532) |
(1,532) |
(3,064) |
|
Administrative expenses |
4 |
(976) |
- |
(976) |
(860) |
- |
(860) |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Net return before finance costs and taxation |
|
20,123 |
(120,524) |
(100,401) |
16,859 |
65,968 |
82,827 |
|
|
|
|
|
|
|
|
|
|
Finance costs of borrowing |
5 |
(1,143) |
(1,146) |
(2,289) |
(765) |
(765) |
(1,530) |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Return on ordinary activities before and after taxation |
|
18,980 |
(121,670) |
(102,690) |
16,094 |
65,203 |
81,297 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Return per Ordinary share (pence) |
8 |
29.3 |
(187.6) |
(158.3) |
24.7 |
100.0 |
124.7 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
The total column of this statement represents the profit and loss account of the Company.
The Company had no recognised gains or losses other than those recognised in the Income Statement.
No operations were acquired or discontinued in the year.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Ordinary dividends on equity shares |
6 |
16,082 |
- |
16,082 |
14,476 |
- |
14,476 |
|
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
The above dividend information does not form part of the Income Statement.
MURRAY INCOME TRUST PLC
Balance Sheet
|
|
|
As at |
As at |
|
|
|
30 June 2008 |
30 June 2007 |
|
|
Notes |
£'000 |
£'000 |
|
Non-current assets |
|
|
|
|
Investments at fair value through profit or loss |
9 |
433,825 |
543,269 |
|
|
|
__________ |
__________ |
|
Current assets |
|
|
|
|
Loans and receivables |
10 |
3,080 |
8,292 |
|
Cash and short term deposits |
|
6,390 |
2,073 |
|
|
|
__________ |
__________ |
|
|
|
9,470 |
10,365 |
|
|
|
__________ |
__________ |
|
Creditors: amounts falling due within one year |
11 |
(2,759) |
(1,017) |
|
|
|
__________ |
__________ |
|
Net current assets |
|
6,711 |
9,348 |
|
|
|
__________ |
__________ |
|
Total assets less current liabilities |
|
440,536 |
552,617 |
|
|
|
|
|
|
Creditors: amounts falling due after more than one year |
|
|
|
|
Bank loans |
12 |
(40,000) |
(30,000) |
|
|
|
__________ |
__________ |
|
Net assets |
|
400,536 |
522,617 |
|
|
|
__________ |
__________ |
|
Share capital and reserves |
|
|
|
|
Called-up share capital |
13 |
16,604 |
16,604 |
|
Share premium account |
|
7,955 |
7,955 |
|
Capital redemption reserve |
|
4,997 |
4,997 |
|
Capital reserve |
|
345,198 |
470,177 |
|
Revenue reserve |
|
25,782 |
22,884 |
|
|
|
__________ |
__________ |
|
Total equity |
|
400,536 |
522,617 |
|
|
|
__________ |
__________ |
|
Net asset value per Ordinary share (pence): |
14 |
619.9 |
802.3 |
|
|
|
__________ |
__________ |
|
|
|
|
|
MURRAY INCOME TRUST PLC
Reconciliation of Movements in Shareholders' funds
|
For the year ended 30 June 2008 |
|
|
|
|
|
|
|
|
|
|
Share |
Capital |
Capital |
Capital |
|
|
|
|
Share |
premium |
redemption |
reserve - |
reserve - |
Revenue |
|
|
|
capital |
account |
reserve |
realised |
unrealised |
reserve |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 30 June 2007{A} |
16,604 |
7,955 |
4,997 |
320,641 |
149,536 |
22,884 |
522,617 |
|
Repurchase of own shares |
- |
- |
- |
(3,309) |
- |
- |
(3,309) |
|
Return on ordinary activities after taxation |
- |
- |
- |
28,583 |
(150,253) |
18,980 |
(102,690) |
|
Dividends paid (see note 6) |
- |
- |
- |
- |
- |
(16,082) |
(16,082) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Balance at 30 June 2008 |
16,604 |
7,955 |
4,997 |
345,915 |
(717) |
25,782 |
400,536 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
|
For the year ended 30 June 2007 |
|
|
|
|
|
|
|
|
|
|
Share |
Capital |
Capital |
Capital |
|
|
|
|
Share |
premium |
redemption |
reserve - |
reserve - |
Revenue |
|
|
|
capital |
account |
reserve |
realised |
unrealised |
reserve |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 30 June 2006{A} |
16,604 |
7,955 |
4,997 |
284,030 |
121,862 |
21,266 |
456,714 |
|
Repurchase of own shares |
- |
- |
- |
(918) |
- |
- |
(918) |
|
Return on ordinary activities after taxation |
- |
- |
- |
37,529 |
27,674 |
16,094 |
81,297 |
|
Dividends paid (see note 6) |
- |
- |
- |
- |
- |
(14,476) |
(14,476) |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
Balance at 30 June 2007 |
16,604 |
7,955 |
4,997 |
320,641 |
149,536 |
22,884 |
522,617 |
|
|
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
_______ |
|
|
|
|
|
|
|
|
|
{A} Prior year comparatives have been reclassified to confirm with the current year's presentation.
The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
The accompanying notes are an integral part of the financial statements.
MURRAY INCOME TRUST PLC
Cash Flow Statement
|
|
|
Year ended 30 June 2008 |
Year ended 30 June 2007 |
||
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
Net cash inflow from operating activities |
15 |
|
18,541 |
|
14,139 |
|
|
|
|
|
|
|
|
Servicing of finance |
|
|
|
|
|
|
Interest paid |
|
(2,274) |
|
(1,525) |
|
|
|
|
_______ |
|
_______ |
|
|
Net cash outflow from servicing of finance |
|
|
(2,274) |
|
(1,525) |
|
|
|
|
|
|
|
|
Financial investment |
|
|
|
|
|
|
Purchases of investments |
|
(132,881) |
|
(96,057) |
|
|
Sales of investments |
|
129,919 |
|
95,810 |
|
|
|
|
_______ |
|
_______ |
|
|
Net cash outflow from financial investment |
|
|
(2,962) |
|
(247) |
|
|
|
|
|
|
|
|
Equity dividends paid |
|
|
(16,082) |
|
(14,476) |
|
|
|
|
|
|
|
|
Management of liquid resources |
|
|
|
|
|
|
Cash placed on money market deposits |
|
|
(3,400) |
|
(1,600) |
|
|
|
|
_______ |
|
_______ |
|
Net cash outflow before financing |
|
|
(6,177) |
|
(3,709) |
|
|
|
|
|
|
|
|
Financing |
|
|
|
|
|
|
Drawdown of loans |
|
10,000 |
|
5,000 |
|
|
Purchase of own shares |
|
(2,906) |
|
(918) |
|
|
|
|
_______ |
|
_______ |
|
|
Net cash inflow from financing |
|
|
7,094 |
|
4,082 |
|
|
|
|
_______ |
|
_______ |
|
Increase in cash |
16 |
|
917 |
|
373 |
The accompanying notes are an integral part of the financial statements.
MURRAY INCOME TRUST PLC
YEAR ENDED 30 JUNE 2008
1. Accounting policies
(a) Basis of preparation and going concern
The financial statements have been prepared in accordance with UK Generally Accepted Accounting Practice ('UK GAAP') and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' ('the SORP') (issued January 2003 and revised in December 2005). 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 Directors believe this is appropriate for the reasons outlined in the Directors' Report in the Annual Report and Accounts.
During the year the Company adopted FRS 29 'Financial Instruments: Disclosures'. This standard primarily concerns the disclosure of financial instruments and risks. These disclosures can be found primarily in note 17.
(b) Income
Dividends receivable on equity shares (other than special dividends) are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available dividends receivable on or before the year end are treated as revenue for the year. Provision is made for any dividends not expected to be received. Special dividends are credited to capital or revenue, according to the circumstances.
The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities and shares.
Interest receivable from cash and short-term deposits and interest payable is accrued to the end of the year.
(c) Expenses
All expenses are accounted for on an accruals basis. All expenses are charged through the revenue column of the Income Statement except as follows:
transaction costs on the acquisition or disposal of investments are recognised as a capital item in the Income Statement.
expenses are charged to realised capital reserves where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 50% to revenue and 50% to realised capital reserves to reflect the Company's investment policy and prospective income and capital growth.
(d) Taxation
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Balance Sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the Balance Sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the Financial Statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the Balance Sheet date.
Due to the Company's status as an investment trust company, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.
The tax effect of different items of income/gain and expenditure/loss is allocated between capital reserves and the revenue account on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year.
(e) Valuation of Investments
Investments have been designated upon initial recognition at fair value through profit or loss. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured initially at fair value. Subsequent to initial recognition, investments are valued at fair value through profit or loss. For listed investments, this is deemed to be bid market prices or closing prices for SETS (London Stock Exchange's electronic trading service) stocks sourced from the London Stock Exchange. Gains and losses arising from changes in fair value are included in the net return for the period as a capital item in the Income Statement and are ultimately recognised in the unrealised capital reserve.
(f) Borrowings
Monies borrowed to finance the investment objectives of the Company are stated at the amount of net proceeds immediately after issue plus cumulative finance costs less cumulative payments made in respect of the debt. The finance costs of such borrowings are allocated to years over the term of the debt at a constant rate on the carrying amount and are charged 50% to revenue and 50% to realised capital reserves to reflect the Company's investment policy and prospective income and capital growth.
|
|
|
2008 |
2007 |
|
2. |
Income |
£'000 |
£'000 |
|
|
Income from investments |
|
|
|
|
UK dividends (all listed) |
21,101 |
18,238 |
|
|
Bond interest |
943 |
909 |
|
|
|
22,044 |
19,147 |
|
|
|
|
|
|
|
Other income |
|
|
|
|
Deposit interest |
246 |
104 |
|
|
Money market interest |
45 |
- |
|
|
Underwriting commission |
55 |
- |
|
|
|
346 |
104 |
|
|
Total income |
22,390 |
19,251 |
|
|
|
2008 |
2007 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
3. |
Investment management fees |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Investment management fees |
1,253 |
1,253 |
2,506 |
1,305 |
1,305 |
2,610 |
|
|
Irrecoverable VAT |
38 |
38 |
76 |
227 |
227 |
454 |
|
|
|
________ |
________ |
________ |
________ |
________ |
________ |
|
|
|
1,291 |
1,291 |
2,582 |
1,532 |
1,532 |
3,064 |
|
|
|
________ |
________ |
________ |
________ |
________ |
________ |
|
|
|
|
|
|
|
|
|
Details of the fee basis are contained in the Directors' Report in the Annual Report and Accounts.
The irrecoverable VAT charged during the year has been affected as a consequence of the ruling highlighted in note 18. The Company was charged VAT on fees for July 2007 and August 2007, though no VAT was charged after these dates.
|
|
|
2008 |
2007 |
|
4. |
Administrative expenses |
£'000 |
£'000 |
|
|
Shareholders' services{A} |
460 |
393 |
|
|
Irrecoverable VAT |
111 |
97 |
|
|
Directors' remuneration |
100 |
88 |
|
|
Secretarial fees |
75 |
75 |
|
|
Auditors' remuneration: |
|
|
|
|
Fees payable to the Company's auditor for the audit of the Company's annual accounts |
18 |
17 |
|
|
Fees payable to the Company's auditor and its associates for other services: |
|
|
|
|
- Interim review |
- |
4 |
|
|
Other expenses |
212 |
186 |
|
|
|
________ |
________ |
|
|
|
976 |
860 |
|
|
|
________ |
________ |
|
|
|
|
|
{A} Includes registration, savings scheme and other wrapper administration and promotion expenses, of which £407,000 (2007 - £329,000) was paid to Aberdeen Asset Managers Limited (AAM) to cover marketing activities during the year. There were no sums due to AAM at the year end (2007 - £84,000 due).
|
|
|
2008 |
2007 |
||||
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
5. |
Finance costs of borrowing |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Bank loans and |
1,143 |
1,146 |
2,289 |
765 |
765 |
1,530 |
|
|
|
2008 |
2007 |
|
6. |
Ordinary dividends on equity shares |
£'000 |
£'000 |
|
|
Third interim 2007 of 5.00p (2006 - 4.70p) |
3,257 |
3,066 |
|
|
Final 2007 of 9.25p (2006 - 7.50p) |
6,015 |
4,890 |
|
|
First interim 2008 of 5.25p (2007 -5.00p) |
3,414 |
3,260 |
|
|
Second interim 2008 of 5.25p (2007 - 5.00p) |
3,396 |
3,260 |
|
|
|
________ |
________ |
|
|
|
16,082 |
14,476 |
|
|
|
________ |
________ |
|
|
|
|
|
The third interim and proposed final dividends for 2008 have not been included as a liability in these financial statements. The proposed final dividend for 2008 is subject to approval by Shareholders at the Annual General Meeting.
We set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Section 842 of the Income and Corporation Taxes Act 1988 are considered. The revenue available for distribution by way of dividend for the year is £18,980,000 (2007 - £16,094,000).
|
|
|
2008 |
2007 |
|
|
|
£'000 |
£'000 |
|
|
Three interim dividends of 5.25p (2007 - 5.00p) |
10,202 |
9,777 |
|
|
Proposed final dividend of 11.25p (2007 - 9.25p) |
7,266 |
6,015 |
|
|
|
________ |
________ |
|
|
|
17,469 |
15,792 |
|
|
|
________ |
________ |
|
|
|
|
|
Since the year end the Company has bought back a further 28,000 of its own shares into treasury, and, therefore the proposed final dividend for 2008 is based on the latest issued share capital (excluding treasury shares) of 64,589,458 Ordinary 25p shares.
7. Taxation
There is no taxation charge for the year. Approved investment trusts are exempt from tax on gains made by the Company. The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 29.5% (2007 - 30%). The differences are explained below:
|
|
2008 |
2007 |
|
|
£'000 |
£'000 |
|
Revenue return on ordinary activities before taxation |
18,980 |
16,094 |
|
|
|
|
|
Return on ordinary activities multiplied by the applicable rate of corporation tax of 29.5% (2007 - 30%) |
5,599 |
4,828 |
|
Effects of: |
|
|
|
Non-taxable UK dividends |
(6,041) |
(5,471) |
|
Movement in unutilised management expenses |
500 |
718 |
|
Movement in unutilised loan relationships |
(26) |
(75) |
|
Deferred tax not recognised |
(32) |
- |
|
|
________ |
________ |
|
|
- |
- |
|
|
________ |
________ |
|
|
|
|
No provision for deferred tax has been made in the current or prior accounting period.
The Company has not recognised a deferred tax asset of £13,977,000 (2007 - £13,763,000) arising as a result of having unutilised management expenses. Any excess management expenses will be utilised against any taxable income that may arise.
|
|
|
2008 |
2007 |
||
|
8. |
Return per Ordinary share |
£'000 |
p |
£'000 |
p |
|
|
Returns are based on the following figures: |
|
|
|
|
|
|
Revenue return |
18,980 |
29.3 |
16,094 |
24.7 |
|
|
Capital return |
(121,670) |
(187.6) |
65,203 |
100.0 |
|
|
|
________ |
________ |
________ |
________ |
|
|
Total return |
(102,690) |
(158.3) |
81,297 |
124.7 |
|
|
|
________ |
________ |
________ |
________ |
|
|
|
|
|
|
|
|
|
Weighted average number of Ordinary shares in issue |
64,869,985 |
|
65,194,984 |
|
|
|
|
2008 |
2007 |
|
|
9. |
Investments |
£'000 |
£'000 |
|
|
|
Held at fair value through profit or loss: |
|
|
|
|
|
Opening valuation |
543,269 |
480,711 |
|
|
|
Opening unrealised appreciation |
(149,536) |
(121,862) |
|
|
|
|
________ |
________ |
|
|
|
Opening book cost |
393,733 |
358,849 |
|
|
|
Movements during the year: |
|
|
|
|
|
Purchases at cost |
134,398 |
96,227 |
|
|
|
Sales |
- proceeds |
(124,609) |
(101,169) |
|
|
|
- realised gains |
31,020 |
39,826 |
|
|
|
________ |
________ |
|
|
|
Closing book cost |
434,542 |
393,733 |
|
|
|
Closing unrealised appreciation |
(717) |
149,536 |
|
|
|
|
________ |
________ |
|
|
|
Closing valuation |
433,825 |
543,269 |
|
|
|
|
________ |
________ |
|
|
|
|
2008 |
2007 |
|
|
|
|
£'000 |
£'000 |
|
|
|
The portfolio valuation: |
|
|
|
|
|
UK equities |
427,617 |
526,243 |
|
|
|
UK convertible securities |
5,272 |
15,666 |
|
|
|
Traded options |
936 |
1,360 |
|
|
|
|
________ |
________ |
|
|
|
Total |
433,825 |
543,269 |
|
|
|
|
________ |
________ |
|
|
|
(Losses)/gains on investments |
|
|
|
|
|
Realised gains based on book cost |
31,020 |
39,826 |
|
|
|
Net movement in unrealised appreciation |
(150,253) |
27,674 |
|
|
|
|
________ |
________ |
|
|
|
|
(119,233) |
67,500 |
|
|
|
|
________ |
________ |
|
|
|
|
|
|
|
Transaction costs
During the year expenses were incurred in acquiring or disposing of investments classified at fair value through profit or loss. These have been expensed through capital and are included within (losses)/gains on investments in the Income Statement. The total costs were as follows:
|
|
|
2008 |
2007 |
|
|
|
£'000 |
£'000 |
|
|
Purchases |
736 |
502 |
|
|
Sales |
113 |
116 |
|
|
|
________ |
________ |
|
|
|
849 |
618 |
|
|
|
2008 |
2007 |
|
10. |
Debtors: amounts falling due within one year |
£'000 |
£'000 |
|
|
Prepayments and accrued income |
3,031 |
2,933 |
|
|
Amounts due from brokers |
49 |
5,359 |
|
|
|
________ |
________ |
|
|
|
3,080 |
8,292 |
|
|
|
2008 |
2007 |
|
11. |
Creditors: amounts falling due within one year |
£'000 |
£'000 |
|
|
Amounts due to brokers |
2,431 |
511 |
|
|
Accruals |
328 |
506 |
|
|
|
________ |
________ |
|
|
|
2,759 |
1,017 |
|
|
|
________ |
________ |
|
|
|
|
|
Accruals include £184,000 (2007 - £229,000 plus VAT) of management fees and secretarial fees due to Aberdeen Asset Managers Limited, the investment manager.
|
|
|
2008 |
2007 |
|
12. |
Creditors: amounts falling due after more than one year |
£'000 |
£'000 |
|
|
£75,000,000 committed revolving bank credit facilities |
40,000 |
30,000 |
|
|
|
________ |
________ |
|
|
|
|
|
At 30 June 2008 and 30 June 2007 the Company had a £45,000,000 revolving bank credit facility with ING. Under the terms of the agreement, advances from the facility may be made for periods of up to six months or for such longer periods agreed by the lender. Interest is charged at a variable rate based on LIBOR plus a margin of 0.4% for the relevant period of the advance. As at 30 June 2008 this rate was 5.5663% (30 June 2007- 6.33125%). The facility expires on 1 October 2009 by which time all advances must be repaid.
On 14 September 2007 the Company committed itself to an additional revolving bank credit facility of £30,000,000 with ING. Interest was charged at a variable rate based on LIBOR plus a margin of 0.32% for the relevant period of the facility. This facility expired on 13 September 2008.
|
|
|
2008 |
2007 |
||
|
13. |
Called-up share capital |
Number |
£'000 |
Number |
£'000 |
|
|
Authorised |
|
|
|
|
|
|
Ordinary shares of 25p each |
102,842,000 |
25,710 |
102,842,000 |
25,710 |
|
|
|
____________ |
________ |
___________ |
________ |
|
|
Allotted, called-up and fully-paid |
|
|
|
|
|
|
Ordinary shares of 25p each |
64,617,458 |
16,154 |
65,138,908 |
16,284 |
|
|
Held in treasury |
1,799,000 |
450 |
1,277,550 |
320 |
|
|
|
____________ |
________ |
___________ |
________ |
|
|
|
66,416,458 |
16,604 |
66,416,458 |
16,604 |
|
|
|
____________ |
________ |
___________ |
________ |
|
|
Of the above shares in issue the movements in the Ordinary shares held in treasury are as follows: |
||||
|
|
|
|
|
|
|
|
|
Balance brought forward |
1,277,550 |
320 |
1,143,500 |
286 |
|
|
Purchased during the year |
521,450 |
130 |
134,050 |
34 |
|
|
|
____________ |
________ |
___________ |
________ |
|
|
Balance carried forward |
1,799,000 |
450 |
1,277,550 |
320 |
|
|
|
____________ |
________ |
___________ |
________ |
|
|
|
|
|
|
|
During the year 521,450 (2007 - 134,050) Ordinary shares of 25p each were repurchased by the Company at a total cost, including transaction costs, of £3,309,000 (2007 - £918,000) of which £403,000 is in brokers. In the year, all of these shares were placed in treasury (2007 - 134,050). No shares were purchased for cancellation during the year (2007- nil). Further details of the share repurchases are contained in the Directors' Report in the Annual Report and Accounts.
14. Net asset value per share
The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the year end calculated in accordance with the Articles of Association were as follows:
|
|
|
2008 |
2007 |
|
|
Net asset value attributable (£'000) |
400,536 |
522,617 |
|
|
Number of Ordinary shares in issue (note 13) |
64,617,458 |
65,138,908 |
|
|
Net asset value per share (p) |
619.9 |
802.3 |
|
15. |
Reconciliation of net return before finance costs and |
2008 |
2007 |
|
|
taxation to net cash inflow from operating activities |
£'000 |
£'000 |
|
|
Net return before finance costs and taxation |
(100,401) |
82,827 |
|
|
Adjustments for: |
|
|
|
|
Losses/(gains) on investments |
119,233 |
(67,500) |
|
|
Increase in accrued income |
(57) |
(1,065) |
|
|
Increase in prepayments |
(41) |
(6) |
|
|
Decrease in accruals |
(193) |
(117) |
|
|
|
_________ |
________ |
|
|
|
18,541 |
14,139 |
|
|
|
_________ |
________ |
|
|
|
At |
|
At |
|
|
|
1 July |
Cash |
30 June |
|
16. |
Analysis of changes in net debt |
'000 |
£'000 |
£'000 |
|
|
Net cash: |
|
|
|
|
|
Cash and short term deposits |
473 |
917 |
1,390 |
|
|
Cash drawn from deposit |
1,600 |
(1,600) |
- |
|
|
Cash placed on money market deposit |
- |
5,000 |
5,000 |
|
|
|
_________ |
________ |
________ |
|
|
|
2,073 |
4,317 |
6,390 |
|
|
Debt: |
_________ |
________ |
________ |
|
|
Debt due after more than one year |
(30,000) |
(10,000) |
(40,000) |
|
|
|
_________ |
________ |
________ |
|
|
|
(27,927) |
(5,683) |
(33,610) |
17. Derivatives and other financial instruments
The Company's financial instruments, other than derivatives, comprise securities and other investments, cash balances, liquid resources, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The Company also has the ability to enter into derivative transactions in the form of forward foreign currency contracts, futures and options, subject to Board approval, for the purpose of managing currency and market risk arising from the Company's activities. During the year the Company entered into one yield-enhanced security, details of which are provided in the Portfolio of Investments table in the Annual Report and Accounts (the twenty largest portfolio holdings are shown in the table below).
The main risks the Company faces from these financial instruments are (i) market price risk (comprising interest rate and other price risk), (ii) liquidity risk and (iii) credit risk. In line with the Company's investment objective, the portfolio comprises UK securities and therefore has no exposure to foreign currency risk.
In order to mitigate risk, the investment strategy is to select investments for their fundamental value. Stock selection is therefore based on disciplined accounting, market and sector analysis. It is the Boards' policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular sector. The Attribution Analysis, detailing the allocation of assets and the stock selection, is shown above. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to consider investment strategy. Current strategy is detailed in the Chairman's Statement and in the Investment Manager's Review above. The Board regularly reviews and agrees policies for managing each of the risks. The Board has agreed the level of gearing, which was 10.0% of net assets as at 30 June 2008 (2007 - 5.7%). The Manager's policies for managing these risks are summarised below and have been applied throughout the current and previous year. The numerical disclosures in the table listed below exclude short-term debtors and creditors.
Market price risk
The Company's investment portfolio is exposed to market price fluctuations, which are monitored by the Manager in pursuance of the investment objective as set out above. Adherence to investment guidelines and to investment and borrowing powers set out in the management agreement mitigates the risk of exposure to any particular type of security or issuer. Further information on the investment portfolio is set out in the Investment Manager's Review above.
Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Company's operations. It represents the potential loss the Company might suffer through holding market positions as a consequence of price movements. It is the Board's policy to hold equity investments in the portfolio in a broad spread of sectors in order to reduce the risk arising from factors specific to a particular sector. A summary of investment changes during the year under review appears below and an analysis of the equity portfolio by industrial classification also appears in the Annual Report and Accounts (the twenty largest portfolio holdings are shown below).
Interest rate risk
Interest rate movements may affect:
- the fair value of the investments in fixed interest rate securities;
- the level of income receivable on cash deposits;
- interest payable on the Company's variable rate borrowings.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.
Financial assets
The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates.
The interest rate risk of the portfolio of financial assets at the Balance Sheet date was as follows:
|
|
Floating rate |
Fixed rate |
Non-interest bearing |
|||
|
|
2008 |
2007 |
2008 |
2007 |
2008 |
2007 |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Sterling |
6,390 |
2,073 |
5,272 |
15,666 |
428,553 |
527,603 |
|
|
_________ |
________ |
________ |
_________ |
________ |
________ |
|
|
|
|
|
|
|
|
The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
The interest bearing assets represent the equity linked notes, amounting to £5,272,000 (2007 - £15,666,000). Their weighted average interest rate, based on current yield of the underlying equity, plus a fixed rate of interest on the nominal amount notes held, being 11.24% (2007 - 9.55%).
The non-interest bearing assets represent the equity and Put options elements of the portfolio.
Financial liabilities
The Company has borrowings by way of a loan facility, details of which are in note 12. The fair value of this loan has been calculated at £40,000,000 as at 30 June 2008 (2007 - value £30,000,000; fair value £29,758,000). The fair value of the loan equates to the cost as the loans are rolled on a monthly basis. All other financial assets and liabilities of the Company are included in the Balance Sheet at fair value.
Maturity profile
The maturity profile of the Company's financial assets and liabilities at 30 June was as follows:
|
|
Within |
Within |
|
|
1 year |
1 year |
|
|
2008 |
2007 |
|
Assets |
£'000 |
£'000 |
|
Fixed rate |
|
|
|
Equity linked notes |
5,272 |
15,666 |
|
|
_________ |
________ |
|
Floating rate |
|
|
|
Cash |
6,390 |
2,073 |
|
|
_________ |
________ |
|
|
Between |
Between |
|
|
1 and 2 years |
1 and 2 years |
|
|
2008 |
2007 |
|
Liabilities |
£'000 |
£'000 |
|
Floating rate |
|
|
|
Revolving bank credit facility |
40,000 |
30,000 |
|
|
_________ |
________ |
|
|
|
|
All the other financial assets and liabilities do not have a maturity date.
Interest rate sensitivity
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-derivative instruments at the Balance Sheet date and the stipulated change taking place at the beginning of the financial year and held constant in the case of instruments that have floating rates.
If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Company's :
- profit before tax for the year ended 30 June 2008 would increase / decrease by £64,000 (2007 - increase / decrease by £21,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances.
- equity reserves would not be materially affected as the fixed interest holdings held are linked to an underlying equity, and therefore covered under the other price risk section.
Other price risk
Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, as detailed in the Business Review, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy.
Other price risk sensitivity
If market prices at the Balance Sheet date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary Shareholders and equity for the year ended 30 June 2008 would have increased / decreased by £43,382,000 (2007 - £54,327,000).
Liquidity risk
The Company's assets comprise readily realisable securities which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of committed loan and overdraft facilities.
As at 30 June 2008 the Company utilised £40,000,000 of a £75,000,000 revolving bank credit facility. Interest is charged at a variable rate based on LIBOR plus a margin of 0.4% for the relevant period of the advance. As at 30 June 2008 this rate was 5.5663%. The facility expires on 1 October 2009 by which time all advances must be paid. The aggregate of all future interest payments at the rate ruling at 30 June 2008 and the redemption of the loan amounts to £42,806,000.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. This is mitigated by the Investment Manager reviewing the credit ratings of broker counterparties. The risk attached to dividend flows is mitigated by the Investment Manager's research of potential investee companies. The Company's custodian bank is responsible for the collection of income on behalf of the Company and their performance is reviewed by the Board on a regular basis. The maximum credit risk at 30 June 2008 is £9,262,000 (30 June 2007 - £9,615,000) consisting of £2,823,000 (2007 - £2,183,000) of dividends receivable from equity shares, £6,390,000 (2007 - £2,073,000) in cash held and £49,000 (2007 - £5,359,000) due from brokers for outstanding trades.
Capital management policies and procedures
The investment objective of the Company is to achieve a high and growing income combined with capital growth through investment in a portfolio of UK equities.
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to Shareholders through the optimisation of the debt and equity balance.
The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
- the planned level of gearing which takes into account the Investment Manager's views on the market;
- the level of equity shares in issue;
- the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
At the year end financial covenants contained within the loan agreements provide, inter alia, that borrowings shall at no time exceed 45% of net assets and that the net assets must exceed £225 million. At 30 June 2008 net gearing was 10% and the net assets were £400.5 million.
As at 30 June 2008 the Company utilised £40,000,000 of a £75,000,000 revolving bank credit facility. Interest is charged at a variable rate based on LIBOR plus a margin of 0.4% for the relevant period of the advance. As at 30 June 2008 this rate was 5.5663%. The facility expires on 1 October 2009 by which time all advances must be paid. The aggregate of all future interest payments at the rate ruling at 30 June 2008 and the redemption of the loan amounts to £42,806,025.
18. Contingent assets
On 5 November 2007, the European Court of Justice ruled that management fees on investment trusts should be exempt from VAT. HMRC has announced its intention not to appeal against this ruling to the UK VAT Tribunal and therefore protective claims which have been made in relation to the Company will be processed in due course. It is likely that a repayment will be made by HMRC in respect of VAT which has been charged on investment management fees in past years and the Board is currently quantifying the potential repayment that should be due. The amount the Company will receive, the period to which it will refer, and the timescale for receipt are at present uncertain and the Company has taken no account in the financial statements of any such repayments. The Company has not been charged VAT on its investment management fees since September 2007.
19. If approved, the proposed final dividend of 11.25p per share will be paid on 31 October 2008 to holders of Ordinary shares on the register at the close of business on 28 September 2008. In respect of the year ending 30 June 2009, three interim dividends of 5.5p per share will be paid on 16 January 2009, 17 April 2009 and 17 July 2009 to holders of Ordinary shares on the register at the close of business on 19 December 2008, 13 March 2009 and 12 June 2009 respectively.
20. The Annual General Meeting will be held on 5 November 2008 at the Strathclyde Suite, Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow, G2 3NY.
21. 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.
The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 30 June 2008 have been agreed with the auditors and are an abridged version of the Company's full accounts, which have been approved and audited with an unqualified report. The 2007 and 2008 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.237(2) or (3) of the Companies Act 1985. The financial information for 2007 is derived from the statutory accounts for 2007 which have been delivered to the Registrar of Companies. The 2008 accounts will be filed with the Registrar of Companies in due course.
The annual results will be circulated to shareholders in the form of an Annual Report, copies of which will be available at the Company's registered office, 40 Princes Street, Edinburgh EH2 2BY and which will be filed with the Registrar of Companies.
By Order of the Board
ABERDEEN ASSET MANAGEMENT PLC
Secretary
16 September 2008
Copies of this announcement will be available to the public from the Company Secretary, Aberdeen Asset Management PLC, 40 Princes Street, Edinburgh EH2 2BY.
MURRAY INCOME TRUST PLC
SUMMARY OF INVESTMENT CHANGES DURING THE YEAR TO 30 JUNE 2008
|
|
Valuation |
|
Appreciation/ |
Valuation |
||
|
|
30 June 2007 |
Transactions |
(depreciation) |
30 June 2008 |
||
|
|
£'000 |
% |
£'000 |
£'000 |
£'000 |
% |
|
United Kingdom |
|
|
|
|
|
|
|
Equities |
526,243 |
95.3 |
23,952 |
(122,578) |
427,617 |
97.1 |
|
Convertible securities |
15,666 |
2.8 |
(10,421) |
27 |
5,272 |
1.2 |
|
FTSE options |
1,360 |
0.2 |
(3,742) |
3,318 |
936 |
0.2 |
|
|
________ |
______ |
___________ |
__________ |
_______ |
_____ |
|
Total investments |
543,269 |
98.3 |
9,789 |
(119,233) |
433,825 |
98.5 |
|
|
________ |
______ |
___________ |
__________ |
_______ |
_____ |
|
Other net assets |
9,348 |
1.7 |
(2,637) |
- |
6,711 |
1.5 |
|
|
________ |
______ |
___________ |
__________ |
_______ |
_____ |
|
Total assets |
552,617 |
100.0 |
7,152 |
(119,233) |
440,536 |
100.0 |
|
|
________ |
______ |
___________ |
__________ |
_______ |
_____ |
|
|
|
|
|
|
|
|
SUMMARY OF NET ASSETS
|
|
Valuation |
|
|
|
30 June 2008 |
|
|
|
£'000 |
|
|
Equities |
427,617 |
106.8 |
|
Convertible securities |
5,272 |
1.3 |
|
FTSE options |
936 |
0.2 |
|
Other net assets |
6,711 |
1.7 |
|
Borrowings |
(40,000) |
(10.0) |
|
|
_________ |
_________ |
|
Equity Shareholders' interest |
400,536 |
100.0 |
|
|
_________ |
_________ |
|
|
|
|
MURRAY INCOME TRUST PLC
Twenty Largest Investments
As at 30 June 2008
|
|
Valuation |
Total |
Valuation |
|
|
2008 |
assets |
2007 |
|
Investment |
£'000 |
% |
£'000 |
|
1 (1) Royal Dutch Shell |
|
|
|
|
Royal Dutch Shell is engaged in all phases of the petroleum industry from exploration to processing and distribution. The group operates in over 130 countries. We believe the company is set to benefit from higher oil prices and demand growth in developing regions of the world |
26,462 |
6.0 |
31,537 |
|
|
|
|
|
|
2 (2) BP |
|
|
|
|
BP is one of the world's largest petroleum and petrochemicals groups. Its main activities are: exploration and production of crude oil and natural gas; refining, marketing, supply and transportation of petroleum products; and manufacturing and the marketing of petrochemicals. |
23,913 |
5.4 |
28,492 |
|
|
|
|
|
|
3 (9) British American Tobacco |
|
|
|
|
British American Tobacco is the holding company for a group of companies that manufacture, market and sell cigarettes and other tobacco products, including cigars and roll-your-own tobacco. The group sells over 300 brands in approximately 180 markets throughout the world. Key brands include Kent, Dunhill, Pall Mall and Lucky Strike. We believe well-managed companies, like BAT, have scope to improve profitability through cost cutting, industry consolidation and expansion in to developing markets |
17,758 |
4.0 |
14,126 |
|
|
|
|
|
|
4 (3) HSBC Holdings |
|
|
|
|
The HSBC group is one of the world's largest banking and financial services institutions. Its international network comprises more than 5,000 offices in 80 countries and territories, operating in the Asia Pacific region, Europe, the Americas, the Middle East and Africa. The diversity of HSBC's business and exposure to faster growing regions of the world should enable it to deliver long-term growth ahead of most UK domestic banks. |
17,338 |
3.9 |
24,934 |
|
|
|
|
|
|
5 (12) Vodafone Group |
|
|
|
|
Vodafone is the world's largest mobile phone company, with a significant position in major economies including Germany, Italy, France, UK and the US, as well as emerging markets. The group generates a significant amount of cash flow and has committed to returning more capital to shareholders |
15,810 |
3.6 |
12,627 |
|
|
|
|
|
|
6 (6) GlaxoSmithKline |
|
|
|
|
GlaxoSmithKline is a research-based pharmaceutical group that develops, manufactures and markets vaccines, prescription and over the counter medicines, as well as health-related consumer products. The group specialises in treatments for respiratory, central nervous system, gastro-intestinal and genetic disorders. The attraction of the shares lies in the company's large pipeline of new drugs, which should enable it to deliver strong profit growth over the next few years. |
14,469 |
3.3 |
16,965 |
|
|
|
|
|
|
7 (13) AstraZeneca |
|
|
|
|
AstraZeneca researches, develops, produces and markets pharmaceutical products. The company's operations are focused on six therapeutic areas: Cardiovascular, Oncology, Respiratory, Neuroscience, Inflammation and Infection. Following the acquisition of Medimmune the company is well positioned to develop further its portfolio of products. |
13,494 |
3.1 |
12,610 |
|
|
|
|
|
|
8 (10) BT Group |
|
|
|
|
BT offers a range of communication services to residential and business customers. The group provides local, national and international telecommunications services as well as higher-value broadband and internet products and services. It has operations in the UK, the US, the Netherlands, Italy, Australia, Spain, Germany, Hong Kong, Bermuda and France amongst others. |
13,273 |
3.0 |
14,111 |
|
|
|
|
|
|
9 (8) Centrica |
|
|
|
|
Centrica provides gas, electricity and energy related products and services to business and residential customers. It also provides central heating and gas appliance installation and maintenance services. The company enjoys a dominant position in the UK market, which provides a solid platform from which to generate long-term value. |
13,124 |
3.0 |
14,351 |
|
|
|
|
|
|
10 (4) Royal Bank of Scotland Group |
|
|
|
|
Royal Bank of Scotland is an international financial services group. The acquisition of ABN AMRO's wholesale banking and Asian operations provides the opportunity for further growth and cost rationalisation. |
12,674 |
2.9 |
20,965 |
|
Top ten investments |
168,315 |
38.2 |
|
|
|
|
|
|
|
11 (16) National Grid |
|
|
|
|
National Grid owns and operates electricity and gas networks throughout the UK and in the US. The company's valuation is appealing and there is scope for a material increase in its dividend. |
12,021 |
2.7 |
10,812 |
|
|
|
|
|
|
12(-) Arriva |
|
|
|
|
Arriva is one of the largest transport groups in Europe with a significant presence in 12 countries. Growth has been driven by deregulation and the company's success in providing efficient bus and rail transport. |
10,617 |
2.4 |
8,349 |
|
|
|
|
|
|
13 (-) Ladbrokes |
|
|
|
|
Ladbrokes is the world's largest fixed-odds betting company. It has a well-invested estate in the UK and a number of opportunities for international expansion. Its strong cash generation characteristics make the company particularly appealing |
9,756 |
2.2 |
8,556 |
|
|
|
|
|
|
14 (-) Venture Production |
|
|
|
|
Venture is a North Sea focused oil and gas production company. The company aims to exploit stranded reserves that are typically uneconomical for the oil majors by utilising its advanced technology, operating practices and personnel skills. |
9,733 |
2.2 |
5,764 |
|
|
|
|
|
|
15 (-) Imperial Tobacco |
|
|
|
|
Imperial Tobacco is the world's fourth largest international tobacco company. The acquisition of Altadis provides a platform for further market share growth and cost efficiencies. The company's key brands are Davidoff, West, Gauloises and Golden Virginia. |
9,542 |
2.2 |
8,536 |
|
|
|
|
|
|
16 (11) Aviva |
|
|
|
|
Aviva is an international insurance company which provides a broad variety of classes of general and life assurance, including fire, motor, marine, aviation and transport insurance combining a profitable book of past business with strong positions in a number of high growth markets. We feel that the market fails to value sufficiently the substantial level of new business profit being generated. |
9,269 |
2.1 |
13,465 |
|
|
|
|
|
|
17 (-) Morrison (Wm) Supermarkets |
|
|
|
|
Morrisons is one of the UK's largest supermarket chains. With an emphasis on good value the company manages most of its operations in-house including fresh fruit and vegetables, meat processing and transport. |
9,052 |
2.1 |
8,319 |
|
|
|
|
|
|
18 (-) AMEC |
|
|
|
|
Amec is a leading supplier of high-value consultancy, engineering and project management services to the world's energy, power and process industries. The company employs over 23,000 people in more than 30 countries. |
8,900 |
2.0 |
9,432 |
|
|
|
|
|
|
19 (-) Segro |
|
|
|
|
Segro is a property investment and development company focused on the provision of flexible business space. The Company has recently expanded across Europe with operations now in Belgium, the Czech Republic, France, Germany, Italy and Spain amongst others. |
8,854 |
2.0 |
7,800 |
|
|
|
|
|
|
20 (-) Whitbread |
|
|
|
|
Whitbread is the UK's largest hotel company focusing on the budget sector with its Premier Inn brand. The company also runs pub restaurants and owns the Costa Coffee chain. The company maintains a strong balance sheet and has excellent opportunities for international expansion. |
8,624 |
2.0 |
- |
|
Top twenty investments |
264,683 |
60.1 |
|
The value of the 20 largest investments represents 60.1% (2007 - 56.7%) of total assets.
The figures in brackets denote the position at the previous year end. (-) not previously in 20 largest investments.
This information is provided by RNS
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