Half-year Report

RNS Number : 5200I

Murray International Trust PLC

13 August 2021

 

MURRAY INTERNATIONAL TRUST PLC (the "Company")

Legal Entity Identifier (LEI):  549300BP77JO5Y8LM553

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2021

The Directors of Murray International Trust PLC report the unaudited results of the Company for the six months ended 30 June 2021.

PERFORMANCE HIGHLIGHTS
Net asset value total return{A}			Share price total return{A}			Reference index total return{B}
Six months ended 30 June 2021	+8.7%		Six months ended 30 June 2021	+7.3%		Six months ended 30 June 2021	+11.4%
Year ended 31 December 2020	+0.9%		Year ended 31 December 2020	-5.3%		Year ended 31 December 2020	+7.0%
Discount to net asset value{A}			Net gearing{A}			Ongoing charges ratio{A}
As at 30 June 2021	-1.9%		As at 30 June 2021	12.7%		As at 30 June 2021	0.60%
As at 31 December 2020	-0.7%		As at 31 December 2020	13.4%		As at 31 December 2020	0.68%
{A}   Alternative Performance Measure (see below).
{B}   FTSE All World TR Index.

INTERIM BOARD REPORT - CHAIRMAN'S STATEMENT

It is with deep sadness that I have to report that Simon Fraser, the Chairman of the Company, died in the early hours of 9 August 2021 following a short illness.  On an interim basis, the Directors have asked me, David Hardie, to chair the Company.

Simon joined the Board in May 2020 and was appointed Chairman in April 2021 and had already, in this short time, contributed significantly to the Company. Simon's experience, measured leadership, focus and good humour will be greatly missed by the Board and the management team alike.  I should like to take this opportunity, on behalf of the Board, shareholders and the Manager, to extend our sincerest condolences to Simon's family.

 

Background

Global financial markets embraced the first few months of calendar 2021 with great optimism as vaccination programmes and easing of social mobility constraints gathered momentum. The message from most politicians and policymakers generally accentuated positives associated with clinical progress and strengthening economic activity following twelve tough months of pandemic-related disruptions. Such sentiment prevailed relatively unchallenged up to the end of the first quarter of the year, but thereafter serious doubts began to emerge.  Renewed challenges from viral mutations sharply reversed declining infection trends, particularly in the developing world; increasing recognition of debilitating legacies from lengthy economic dislocations became more apparent as government debt burdens escalated; plus the emergence of rising inflationary pressures inflicted a sobering constraint on financial markets as the implications of potentially higher interest rates came sharply into focus. With stressed supply chains failing to keep up with surging global demand, the prevailing shortages caused widespread price increases in commodities, raw materials and services, reigniting concerns over inflation. By period end, investor confidence had cooled significantly. 

Performance and Dividends

The net asset value (NAV) total return, with net income reinvested, for the six months to 30 June 2021 was 8.7%. The Company does not have a benchmark but this compared with the 11.4% return of the Company's Reference Index (the FTSE All World TR Index). Over the six month period, the share price total return was 7.3%, reflecting a small widening of the discount at which the shares traded over the NAV. The Manager's Review contains more information about the drivers of performance in the period and the portfolio changes effected.

Two interim dividends of 12.0p (2020: 12.0p) have been declared in respect of the period to 30 June 2021. The first interim dividend is payable on 16 August 2021 to shareholders on the register on 2 July 2021 and the second interim dividend will be paid on 19 November 2021 to shareholders on the register on 8 October 2021.  As stated previously, the Board intends to maintain a progressive dividend policy given the Company's investment objective. This means that in some years revenue will be added to reserves while, in others, revenue may be taken from reserves to supplement earned revenue for that year to pay the annual dividend.  Shareholders should not be surprised or concerned by either outcome as, over time, the Company will aim to pay out what the underlying portfolio earns. The Board currently intends in 2021 at least to match the dividend payout of 54.5p per share in 2020. It is expected that this will again entail some use of the significant revenue reserves built up over prior years for occasions such as the current pandemic.  At the end of June 2021 the Balance Sheet revenue reserves amounted to £58.2m.

Annual General Meeting

At the Annual General Meeting held on 23 April 2021 all resolutions were duly passed by shareholders.  In addition to the usual business, shareholders approved the Board's proposals to adopt new Articles of Association which became effective from the date of the AGM.  I should like to thank shareholders for their continuing support and forbearance given that, for the second year running, we were required to hold a purely functional AGM in light of the continuing Covid-19 pandemic.  However, it was very pleasing indeed to be able to communicate with a significant number of existing and prospective shareholders during the Online Shareholder Presentation held in April 2021.  Given the significant turnout and excellent level of interaction, this is something that the Board will consider repeating in the future, in addition to a physical AGM.  The Board remains very keen to have an opportunity to meet shareholders and, subject to any legal requirements or constraints that may apply at the time, we hope to be able to return to holding a normal, in-person AGM next year, on 23 April 2022 in London.

Management of Premium and Discount

The Board continues to believe that it is appropriate to seek to address temporary imbalances of supply and demand for the Company's shares which might otherwise result in a recurring material discount or premium. Subject to existing shareholder permissions (given at the last AGM) and prevailing market conditions over time, the Board intends to continue to buy back shares and issue new shares (or sell shares from Treasury) if shares trade at a persistent significant discount to NAV (excluding income) or premium to NAV (including income). The Board believes that this process is in all shareholders' interests as it seeks to reduce volatility in the premium or discount to underlying NAV whilst also making a small positive contribution to the NAV.  During the period under review, the Company has purchased for Treasury 69,709 Ordinary shares at a discount to the underlying exclusive of income NAV. At the latest practicable date, the NAV (excluding income) per share was 1164.2p and the share price was 1137.0p equating to a discount of 2.3% per Ordinary share.

Gearing

In May 2021 the Company finalised new long-term fixed rate borrowings through the issuance of a £50 million 10 year Senior Unsecured Loan Note at an all-in rate of 2.24%.  The proceeds of the issue were used to repay the Company's £50 million revolving credit facility with the Royal Bank of Scotland International Limited, London Branch that matured at that time.  Under the terms of the Loan Note Agreement, up to an additional £150 million will also be available for drawdown by the Company for a five year period and the Board's current intention is to only use this additional amount to repay the Company's existing RBS debt as it falls due over the coming years.

The Company's total borrowings are £200m, which represents a net gearing level of 12.7% based on the Company's NAV at 30 June 2021.

Ongoing Charges Ratio ("OCR")

The Board remains focused upon delivering value to shareholders and regularly reviews the OCR.  During the review period it is pleasing to note that the OCR has reduced from 0.68% to 0.60% reflecting the increase in net assets over the period combined with the results of the Board's continuing focus on reducing administrative expenses. A full breakdown of the OCR calculation is provided on below.

Directorate

This Half Yearly Report has been overshadowed by the death of Simon Fraser.  As I reported above, on an interim basis, I have agreed to chair the Company and, in addition, Alexandra Mackesy has agreed to become Senior Independent Director and to chair the Remuneration Committee.

On 23 April 2021 Dr Kevin Carter and Ms Marcia Campbell retired from the Board. I should like to take this opportunity to reiterate the Board's sincere thanks to Kevin for his huge contribution to the Company as Chairman and to reiterate our appreciation of the very significant contribution from Marcia as Audit and Risk Committee Chair. 

As part of the Board's succession planning, on 1 May 2021 we welcomed Mr Nicholas Melhuish to the Board as an independent non executive Director.  Nick brings a wealth of valuable global investment expertise to the Board having joined Corpus Christi College, Oxford as Fellow and Bursar in 2018 following a portfolio management career most recently as Head of Global Equities at Amundi SA.  He is a non executive director of JPMorgan Claverhouse Investment Trust PLC, a trustee of the Trusthouse Charitable Foundation and a director and trustee of The London Clinic.

Outlook

Notwithstanding the continuing battle against Covid-19 and its variants, there can be no doubt that a global economic recovery is underway with practically every country in the world projected to register a meaningful rebound in annual average GDP growth this year. Yet it must also be noted that rates of economic expansion are likely to prove extremely erratic on a quarterly basis and vary enormously between continents, countries and regional economies. For individual sectors, industries and companies, the path towards normality is unlikely to be straightforward. Both in terms of new patterns of consumption brought about through necessity during the past twelve months and production constraints associated with satisfying pent-up demand going forward from here, the pricing environment for goods and services is likely to remain volatile for some considerable time. How global financial markets ultimately cope should persistent inflation re-emerge remains to be seen, but the Company remains well diversified in quality companies with real tangible assets, seeking to capitalise on the numerous growth and income investment opportunities that currently prevail. 

David Hardie,

Interim Chairman

12 August 2021

INTERIM BOARD REPORT -MANAGERS' REVIEW

Background

Polarisation between investor sentiment and fundamental realities stretched new boundaries over the first six months of 2021 as financial markets constantly looked beyond the pandemic whilst global companies remain focused on the current challenging operating environment. This proved particularly pertinent for income investors. Improving global growth prospects and rising corporate profitability restored confidence that manifested itself in almost universally higher equity prices. But numerous companies remained very cautious when it came to returning improving cash flows to shareholders. Opting to reset dividends below pre-pandemic levels or to keep dividends unchanged until greater transparency emerges was commonplace against a backdrop of viral mutations and constantly changing directives from governments. Unlike previous periods of dividend recessions, the path to income recovery may take much longer for certain economic sectors and businesses this time around. A focus on strong corporate balance sheets, flexible investment parameters and diversified geographical exposures remains key for driving sustainable income growth in and beyond the current environment. All three continue to be rigorously implemented by the Manager in pursuit of your Company's investment objectives.

Asia

Whilst general perceptions towards Asia continued to emphasise the relative success of last year's rapidly enforced social isolation and economic support programmes in response to the pandemic, the path towards re-opening proved increasingly problematic over the period. Financial markets in China fretted over inflationary concerns and potentially higher interest rates as domestic consumption gathered momentum. Consequently portfolio exposure to China (circa 3%) struggled to make much progress, despite ongoing improvements in corporate operating conditions. Conversely, although, ironically, Taiwan registered its first meaningful outbreak in Covid cases since the pandemic began, equity investors remained completely unfazed. Double-digit returns from large portfolio holdings in Taiwan Semiconductor, GlobalWafers and Hon Hai Manufacturing were amongst some of the strongest contributors to overall total return. Elsewhere the tourist dependent economy of Thailand remained essentially paralysed, India continued to experience horrendous infection rates amidst severe logistical vaccination issues, whilst Indonesia remained hostage to oscillating pandemic pressures punctuated by only brief periods of respite. Investment returns from diversified holdings within these countries varied significantly, with strength in holdings such as Castrol India and Siam Commercial Bank being negated by weakness in positions such as Indocement and Lotus Retail.  Yet overall balance sheets remained robust, cash flows continued to improve, and dividend growth tended to meet or exceed expectations. Although no additional investment to Asia was made during the period, current levels of diversified Asian exposure will be maintained for the attractive total return opportunities that very much still prevail.

North America

Earnings, interest rates and inflation dictated the direction of North American bond and equity markets over the past six months. Corporate earnings unsurprisingly generally exceeded expectations given comparisons against lockdown conditions that prevailed a year ago. Interest rates remained relatively benign as policymakers pledged total commitment to reducing unemployment before tightening monetary policy. Patience was periodically tested by some eye-watering inflation numbers, but bond markets appeared relatively unperturbed and the ascent of equity markets continued. With numerous new record highs breached in North American indices, it proved no surprise that once again the region delivered the strongest returns in the world. Portfolio contributions mirrored such strength. Canadian gas pipeline operators TC Energy and Enbridge, fertilizer producer Nutrien, plus Schlumberger, Philip Morris and Cisco in the United States all delivered +20% in terms of total returns. Significant capital performance was also witnessed from CME Group, Intel and Broadcom, whilst the new holding in leading pharmaceutical company Bristol Myers also delivered solid total returns. Encouragingly, dividend growth from North American holdings yet again exceeded expectations as cash rich balance sheets support improving dividend distributions in the absence of suspended stock buy-back programs. Hopefully this trend is set to continue.

Europe and the UK

The economic and clinical backdrop to an area as broad and diverse as Europe was always going to vary enormously. And over the period, so it proved. Infection rates ebbed and flowed with sentiment oscillating accordingly, but for the most part economic conditions improved, corporate earnings exceeded expectations and equity markets moved higher. Amongst some of the best performing sectors were Industrials, Materials and Energy. Portfolio holdings in Swedish industrials Epiroc and Atlas Copco were exceptionally strong. Above average returns also came from UK commodity producers BHP Group and Royal Dutch Shell, plus French energy conglomerate Totalenergies. Somewhat surprisingly, Swiss pharmaceutical giant Roche and recently introduced French drug company Sanofi also produced double digit total returns, confirmation that quality earnings and dividend growth did not go un-noticed in a market essentially focused on the "reopening trade". Portfolio laggards in Europe and the UK were few and far between, although Unilever, Enel and Telnor remained relatively out of favour in a market environment fuelled by earnings momentum.

Latin America

The diverse and eclectic mix of six Latin American companies in the portfolio produced double-digit total returns over the period and delivered significant improvements in income generation. Brazilian mining giant Vale proved the standout performer in terms of capital and income returns, reflecting strong global iron-ore prices and increasing corporate commitment to ESG and shareholder returns. Recovering tourist traffic to the Yucatan Peninsula in Mexico boosted cash flow and profitability at Grupo Asur, with increasing confidence flowing through into re-establishing dividend payments later this year. Despite the region suffering from some of the highest infection rates in the world and the difficulties inherent in vaccinating a vast, densely populated continent, the response of more domestically focused holdings such as Kimberly Clark de Mexico, Sociedad Quimica Y Minera De Chile   in Chile and Telefonica Brazil to current operating challenges has been impressive. Patience will be required should the pandemic persist, but great scope exists for recovery in profits and dividends in these Latin American companies once some form of normality is restored.

Outlook

Whilst the world waits to witness the full extent of fiscal stimulus packages unleashed to combat the current pandemic, it is becoming increasingly clear that the dramatic policy response comes with a long term legacy, not only of enormous debt liabilities for future generations to service but also fundamental changes to policy objectives. Whereas previous global crises generally prompted non-interventionist policy solutions primarily based on monetary methods (lowering interest rates and providing easy credit), the pandemic has acted as a catalyst throughout the world for Governments to implement more interventionist fiscal methods, directly targeting issues such as climate, inequality and unemployment. Consequently monetary and fiscal policy has "converged" with central banks and Governments now irrevocably entwined, potentially signalling an end to decades of pure market doctrines and an era when prices were generally benign. In a world where the baton of growth is passed from "the market" to "the mandate", the investment environment may significantly change relative to the prevailing conditions of the past thirty years. Whether this ultimately extends to higher inflation and rising interest rates with higher taxes and increased regulation remains to be seen, but the longer term implications, should such a sustainable, paradigm shift in policy intentions prevail, cannot be ignored. Be it construction, transportation, commodities, digital infrastructure, property, factory automation or whatever, real assets producing tangible benefits have rarely appeared so relatively attractive. The portfolio remains focused and exposed to such businesses throughout the world in pursuit of delivering its long term investment objectives.

Bruce Stout

Senior Investment Director

Aberdeen Asset Managers Limited

12 August 2021

INTERIM BOARD REPORT - DIRECTORS' DISCLOSURES

Principal Risks and Uncertainties

The Board has approved a matrix of the key risks that affect the business. The major financial risks associated with the Company are detailed in note 18 of the 2020 Annual Report and the other principal risks are summarised below. These risks represent the principal risks for the remaining six months of the year.

Details of the management of the risks and the Company's internal controls are disclosed on pages 27 and 28 of the 2020 Annual Report. They can be summarised into the following categories:

-  Investment Strategy and Objectives;

-  Investment Portfolio, Investment Management;

-  Financial Obligations;

-  Financial and Regulatory;

-  Operational; and

-  The Potential Impact of ESG Investment Principles.

The Board also has a process in place to identify emerging risks.  If any of these are deemed to be significant, these risks are categorised, rated and added to the Company's risk matrix. 

The Board has reviewed the risks related to the Covid-19 pandemic.  Covid-19 is continuing to impact day to day life as well as affect the value of the Company's investments due to the disruption of supply chains and demand for products and services, increased costs and potential cash flow issues creating uncertainty around future dividend payments. However, the Board notes the Manager's robust and disciplined investment process which continues to focus on long-term company fundamentals including balance sheet strength and deliverability of sustainable earnings growth.  The Board, through the Manager, closely monitors all third party service arrangements and has not suffered any interruption to service. The Board therefore believes that the Manager and all other key third party service providers have in place appropriate business interruption plans and are able to maintain their service levels to the Company despite the uncertainty around the duration of the Covid-19 pandemic.

Following the expiry at the end of 2020 of the transitional arrangements relating to Brexit, some issues remain surrounding, inter alia, the certainty and/or timing of future withholding tax repayments and potential or actual impacts on trading and supply chains for certain portfolio companies.  The Board will continue to monitor developments.

Related Party Transactions

ASFML, a wholly owned subsidiary of abrdn plc (formerly Standard Life Aberdeen plc) acts as Alternative Investment Fund Manager, AAM acts as Investment Manager and Aberdeen Asset Management PLC acts as Company Secretary to the Company; details of the service and fee arrangements can be found in the 2020 Annual Report, a copy of which is available on the Company's website. Details of the transactions with the Manager including the fees payable to abrdn plc group companies are disclosed in note 11 of this Half Yearly Report.

Going Concern

In accordance with the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting, the Directors have undertaken a rigorous review and consider that there are no material uncertainties and that the adoption of the going concern basis of accounting is appropriate.  This review included the additional risks relating to the ongoing Covid-19 pandemic and, where appropriate, action taken by the Manager and Company's service providers in relation to those risks. The Company's assets consist of a diverse portfolio of listed equities and bonds and the portfolio in most circumstances is realisable within a very short timescale. The Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Half Yearly Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.

Directors' Responsibility Statement

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

-  the condensed set of Financial Statements has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting);

-  the Half Yearly Board Report includes a fair review of the information required by rule 4.2.7R of the Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the financial year); and

-  the Half Yearly Board Report includes a fair review of the information required by 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so).

The Half Yearly Financial Report for the six months ended 30 June 2021 comprises the Half Yearly Board Report, the Directors' Responsibility Statement and a condensed set of Financial Statements.

For and on behalf of the Board of Murray International Trust PLC

David Hardie

Interim Chairman

12 August 2021

HIGHLIGHTS

	30 June 2021	31 December 2020	% change
Total assets less current liabilities (before deducting prior charges)	£1,746.9m	£1,661.6m	+5.1
Equity shareholders' funds (Net Assets)	£1,547.2m	£1,461.8m	+5.8
Share price - Ordinary share (mid market)	1,182.0p	1,130.0p	+4.6{A}
Net Asset Value per Ordinary share	1,205.3p	1,138.2p	+5.9{A}
Discount to Net Asset Value per Ordinary share{B}	-1.9%	-0.7%
Net gearing{B}	12.7%	13.4%
Ongoing charges ratio{B}	0.60%	0.68%
{A} The movement relates to capital only and does not take account of the reinvestment of dividends.
{B} Considered to be an Alternative Performance Measure. Further details below.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

		Six months ended			Six months ended
		30 June 2021			30 June 2020
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments		-	98,820	98,820	-	(192,730)	(192,730)
Income	2	36,906	-	36,906	35,561	-	35,561
Investment management fees	11	(1,020)	(2,379)	(3,399)	(1,043)	(2,432)	(3,475)
Other expenses		(892)	-	(892)	(1,048)	-	(1,048)
Currency losses		-	(831)	(831)	-	(2,468)	(2,468)
		_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation		34,994	95,610	130,604	33,470	(197,630)	(164,160)
Finance costs		(562)	(1,313)	(1,875)	(648)	(1,512)	(2,160)
		_______	_______	_______	_______	_______	_______
Return before taxation		34,432	94,297	128,729	32,822	(199,142)	(166,320)
Taxation	3	(3,868)	427	(3,441)	(833)	513	(320)
		_______	_______	_______	_______	_______	_______
Return attributable to equity shareholders		30,564	94,724	125,288	31,989	(198,629)	(166,640)
		_______	_______	_______	_______	_______	_______
Return per Ordinary share (pence)	5	23.81	73.78	97.59	24.72	(153.49)	(128.77)
		_______	_______	_______	_______	_______	_______
The total column of the Condensed Statement of Comprehensive Income is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.

CONDENSED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

		As at	As at
		30 June 2021	31 December 2020
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss		1,729,563	1,646,405
		__________	__________
Current assets
Debtors		16,624	14,410
Cash and short-term deposits		6,661	3,208
		__________	__________
		23,285	17,618
		__________	__________
Creditors: amounts falling due within one year
Bank loans		(59,945)	(50,000)
Other creditors		(5,912)	(2,391)
		__________	__________
		(65,857)	(52,391)
		__________	__________
Net current liabilities		(42,572)	(34,773)
		__________	__________
Total assets less current liabilities		1,686,991	1,611,632
Creditors: amounts falling due after more than one year
Bank loans		(89,910)	(149,805)
2.24% Senior Unsecured Loan Note 2031		(49,895)	-
		__________	__________
Net assets		1,547,186	1,461,827
		__________	__________
Capital and reserves
Called-up share capital		32,353	32,353
Share premium account		362,967	362,967
Capital redemption reserve		8,230	8,230
Capital reserve		1,085,469	991,513
Revenue reserve		58,167	66,764
		__________	__________
Equity shareholders' funds		1,547,186	1,461,827
		__________	__________
Net asset value per Ordinary share (pence)	6	1,205.3	1,138.2
		__________	__________

CONDENSED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

Six months ended 30 June 2021
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2020	32,353	362,967	8,230	991,513	66,764	1,461,827
Return after taxation	-	-	-	94,724	30,564	125,288
Dividends paid (see note 4)	-	-	-	-	(39,161)	(39,161)
Buyback of Ordinary shares to treasury	-	-	-	(768)	-	(768)
	______	______	______	______	______	______
Balance at 30 June 2021	32,353	362,967	8,230	1,085,469	58,167	1,547,186
	______	______	______	______	______	______
Six months ended 30 June 2020
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2019	32,333	361,989	8,230	1,060,756	75,747	1,539,055
Return after taxation	-	-	-	(198,629)	31,989	(166,640)
Dividends paid (see note 4)	-	-	-	-	(38,167)	(38,167)
Issue of new shares	20	978	-	-	-	998
	______	______	______	______	______	______
Balance at 30 June 2020	32,353	362,967	8,230	862,127	69,569	1,335,246
	______	______	______	______	______	______

CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)

		Six months ended	Six months ended
		30 June 2021	30 June 2020
	Notes	£'000	£'000
Net return before finance costs and taxation		130,604	(164,160)
Increase in accrued expenses		8	29
Overseas withholding tax		(4,815)	(2,951)
Increase in accrued income		(1,110)	(700)
Interest paid		(1,676)	(2,254)
(Gains)/losses on investments		(98,820)	192,730
Currency losses		831	2,468
Decrease in other debtors		22	9
Corporation tax (paid)/received		(43)	2,282
		_________	_________
Net cash from operating activities		25,001	27,453
Investing activities
Purchases of investments		(124,760)	(111,060)
Sales of investments		144,078	97,376
		_________	_________
Net cash from/(used in) investing activities		19,318	(13,684)
Financing activities
Equity dividends paid	4	(39,161)	(38,167)
Issue of new Ordinary shares		-	998
Buyback of Ordinary shares to treasury		(768)	-
Loan repayment		(50,000)	(50,000)
Loan drawdown		-	50,000
Issue of 2.24% Senior Unsecured Loan Note 2031		49,894	-
		_________	_________
Net cash used in financing activities		(40,035)	(37,169)
		_________	_________
Increase/(decrease) in cash		4,284	(23,400)
		_________	_________
Analysis of changes in cash during the period
Opening balance		3,208	30,040
Effect of exchange rate fluctuations on cash held		(831)	(2,468)
Increase/(decrease) in cash as above	8	4,284	(23,400)
		_________	_________
Closing balance		6,661	4,172
		_________	_________

NOTES TO THE FINANCIAL STATEMENTS

1.

Accounting policies - Basis of preparation. The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting) and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted. Annual financial statements are prepared under Financial Reporting Standard 102.

The condensed interim financial statements have been prepared using the same accounting policies as the preceding annual financial statements.

2.	Income
		Six months ended	Six months ended
		30 June 2021	30 June 2020
		£'000	£'000
	Income from investments
	UK dividends	3,186	2,591
	Overseas dividends	27,568	23,900
	Overseas interest	6,149	8,926
		_________	_________
		36,903	35,417
		_________	_________
	Other income
	Deposit interest	1	1
	Interest on corporation tax reclaim	2	143
		_________	_________
		3	144
		_________	_________
	Total income	36,906	35,561
		_________	_________

3.

Taxation. The taxation expense reflected in the Condensed Statement of Comprehensive Income is based on the estimated annual tax rate expected for the full financial year. The estimated annual corporation tax rate used for the year to 31 December 2021 is 19%. This is in line with the current corporation tax rate.

The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the year. Taxable profit differs from net return as reported in the Condensed Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

4.	Ordinary dividends on equity shares
		Six months ended	Six months ended
		30 June 2021	30 June 2020
		£'000	£'000
	Third interim dividend 2020 of 12.0p (2019 - 12.0p)	15,413	15,520
	Final dividend 2020 of 18.5p (2019 - 17.5p)	23,748	22,647
		_________	_________
		39,161	38,167
		_________	_________
	A first interim dividend for 2021 of 12.0p (2020 - 12.0p) will be paid on 16 August 2021 to shareholders on the register on 2 July 2021. The ex-dividend date was 1 July 2021.
	A second interim dividend for 2021 of 12.0p (2020 - 12.0p) will be paid on 19 November 2021 to shareholders on the register on 8 October 2021. The ex-dividend date is 7 October 2021.

5.	Return per Ordinary share (pence)
			Six months ended		Six months ended
			30 June 2021		30 June 2020
		£'000	Per Ordinary share (p)	£'000	Per Ordinary share (p)
	Returns are based on the following figures:
	Revenue return	30,564	23.81	31,989	24.72
	Capital return	94,724	73.78	(198,629)	(153.49)
		_________	_________	_________	_________
	Total return	125,288	97.59	(166,640)	(128.77)
		_________	_________	_________	_________
	Weighted average number of Ordinary shares		128,384,846		129,410,437
			____________		____________

6.	Net asset value. The net asset value per share and the net asset value attributable to the Ordinary shares at the period end calculated in accordance with the Articles of Association were as follows:
		As at	As at
		30 June 2021	31 December 2020
	Attributable net assets (£'000)	1,547,186	1,461,827
	Number of Ordinary shares in issue (excluding Treasury)	128,368,953	128,438,662
	Net asset value per share (pence)	1,205.3	1,138.2

7.	Transaction costs. During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows:
		Six months ended	Six months ended
		30 June 2021	30 June 2020
		£'000	£'000
	Purchases	280	75
	Sales	154	79
		_________	_________
		434	154
		_________	_________

8.	Analysis of changes in net debt
		At				At
		31 December	Currency	Cash	Non-cash	30 June
		2020	differences	flows	movements	2021
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	3,208	(831)	4,284	-	6,661
	Debt due within one year	(50,000)	-	50,000	(59,945)	(59,945)
	Debt due after more than one year	(149,805)	-	(49,894)	59,894	(139,805)
		_________	_________	________	_________	________
		(196,597)	(831)	4,390	(51)	(193,089)
		_________	_________	________	_________	________
		At				At
		31 December	Currency	Cash	Non-cash	30 June
		2019	differences	flows	movements	2020
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	30,040	(2,468)	(23,400)	-	4,172
	Debt due within one year	(50,000)	-	-	-	(50,000)
	Debt due after more than one year	(149,704)	-	-	(50)	(149,754)
		_________	_________	________	_________	________
		(169,664)	(2,468)	(23,400)	(50)	(195,582)
		_________	_________	________	_________	________
	A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences from the above analysis.

9.	Fair value hierarchy. FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following classifications:
	Level 1:		Unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2:		Inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3:		Inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets and liabilities measured at fair value in the Condensed Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:
					Level 1	Level 2	Level 3	Total
	As at 30 June 2021			Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities			a)	1,547,766	-	-	1,547,766
	Quoted preference shares			b)	-	8,047	-	8,047
	Quoted bonds			b)	-	173,750	-	173,750
					_________	_________	________	_________
	Total				1,547,766	181,797	-	1,729,563
					_________	_________	________	_________
					Level 1	Level 2	Level 3	Total
	As at 31 December 2020			Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities			a)	1,455,675	-	-	1,455,675
	Quoted preference shares			b)	-	7,488	-	7,488
	Quoted bonds			b)	-	183,242	-	183,242
					_________	_________	________	_________
	Total				1,455,675	190,730	-	1,646,405
					_________	_________	________	_________
	a)	Quoted equities. The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Quoted preference shares and bonds. The fair value of the Company's investments in quoted preference shares and bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets.

10.	Share capital. As at 30 June 2021 there were 128,368,953 (31 December 2020 - 128,438,662) Ordinary shares of 25p each in issue.

11.	Transactions with the Manager. The Company has agreements with Aberdeen Standard Fund Managers Limited ('ASFML' or the 'Manager') for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	The management fee is charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters ('Net Assets'), on a tiered basis. The annual management fee is charged at 0.5% of Net Assets up to £1,200 million, and 0.425% of Net Assets above £1,200 million. A fee of 1.5% per annum is chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. During the period £3,399,000 (30 June 2020 - £3,475,000) of investment management fees was payable to the Manager, with an amount of £1,700,000 (30 June 2020 - £1,730,000) being payable to ASFML at the period end.
	With effect from 1 January 2021, the Company and Manager agreed to terminate the arrangement of allocating £100,000 of the management fee to secretarial fees, which was chargeable 100% to revenue.
	No fees are charged in the case of investments managed or advised by the Standard Life Aberdeen Group. The management agreement may be terminated by either party on the expiry of six months' written notice. On termination the Manager is entitled to receive fees which would otherwise have been due up to that date.
	The promotional activities fee is based on a current annual amount of £400,000 (30 June 2020 - £400,000), payable quarterly in arrears. During the period £200,000 (30 June 2020 - £200,000) of fees was payable, with an amount of £100,000 (30 June 2020 - £200,000) being payable to ASFML at the period end.

12.

Segmental information. The Company is engaged in a single segment of business, which is to invest in equity securities and debt instruments. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based on the Company as one segment.

13.

Half-Yearly Report. The financial information in this Report does not comprise statutory accounts within the meaning of Section 434 - 436 of the Companies Act 2006. The financial information for the year ended 31 December 2020 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the Company's auditor was unqualified and contained no statement under Section 498 (2), (3) or (4) of the Companies Act 2006. The condensed interim financial statements have been prepared using the same accounting policies as contained within the preceding annual financial statements.

The financial information for the six months ended 30 June 2021 and 30 June 2020 has not been audited or reviewed by the Company's auditor.

14.	This Half-Yearly Financial Report was approved by the Board on 12 August 2021.

The Half Yearly Report will be printed and issued to shareholders and further copies will be available on the Company's web site murray-intl.co.uk*.

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

By order of the Board

ABERDEEN ASSET MANAGEMENT PLC, SECRETARY

12 August 2021

ALTERNATIAVE PERFORMANCE MEASURES
Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies.
Total return. NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
The tables below provide information relating to the NAV and share price of the Company on the dividend reinvestment dates during the six months ended 30 June 2021 and the year ended 31 December 2020.
		Dividend				Share
Six months ended 30 June 2021		rate		NAV		price
31 December 2020		N/A		1,138.15p		1,130.00p
7 January 2021		12.00p		1,182.45p		1,172.00p
1 April 2021		18.50p		1,159.94p		1,196.00p
30 June 2021		N/A		1,205.26p		1,182.00p
				_________		_________
Total return				+8.7%		+7.3%
				_________		_________
		Dividend				Share
Year ended 31 December 2020		rate		NAV		price
31 December 2019		N/A		1,190.00p		1,260.00p
2 January 2020		12.00p		1,192.52p		1,260.00p
2 April 2020		17.50p		894.96p		848.00p
2 July 2020		12.00p		1,027.56p		996.00p
1 October 2020		12.00p		989.17p		936.00p
31 December 2020		N/A		1,138.15p		1,130.00p
				_________		_________
Total return				+0.9%		-5.3%
				_________		_________
Net gearing.  Net gearing measures the total borrowings less cash and cash equivalents dividend by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes amounts due to and from brokers at the period end as well as cash and cash equivalents.
			30 June 2021		31 December 2020
Borrowings (£'000)	a		199,750		199,805
Cash (£'000)	b		6,661		3,208
Amounts due to brokers (£'000)	c		3,367		-
Amounts due from brokers (£'000)	d		-		-
Shareholders' funds (£'000)	e		1,547,186		1,461,827
			_________		_________
Net gearing	(a-b+c-d)/e		12.7%		13.4%
			_________		_________
Discount to net asset value per Ordinary share. The discount is the amount by which the share price is lower than the net asset value per share, expressed as a percentage of the net asset value.
			30 June 2021		31 December 2020
NAV per Ordinary share (p)	a		1205.3		1138.2
Share price (p)	b		1182.0		1130.0
Discount	(b-a)/a		(1.9)%		(0.7)%
Ongoing charges. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and administrative expenses and expressed as a percentage of the average net asset values with debt at fair value throughout the year. The ratio for 30 June 2021 is based on forecast ongoing charges for the year ending 31 December 2021.
			30 June 2021		31 December 2020
Investment management fees (£'000)			6,964		6,849
Administrative expenses (£'000)			1,872		1,966
Less: non-recurring charges{A} (£'000)			(48)		(81)
Ongoing charges (£'000)			8,788		8,734
Average net assets (£'000)			1,522,844		1,346,488
Ongoing charges ratio (excluding look-through costs)			0.58%		0.65%
Look-through costs{B}			0.02%		0.03%
Ongoing charges ratio (including look-through costs)			0.60%		0.68%
{A}   Professional services comprising tax and legal fees considered unlikely to recur.
{B}   Costs associated with holdings in collective investment schemes as defined by the committee of European Securities Regulators' guidelines on the methodology for the calculation of the ongoing charges figure, issued on 1 July 2010.
The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes amongst other things, the cost of borrowings and transaction costs.

SUMMARY OF INVESTMENT CHANGES

	Valuation		Appreciation/	Net purchases/	Valuation
	31 December 2020		(depreciation)	(sales)	30 June 2021
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	73,372	4.5	3,040	25,129	101,541	5.9
North America	380,614	23.1	46,477	37,634	464,725	26.9
Europe ex UK	274,030	16.6	7,133	(13,537)	267,626	15.5
Japan	13,848	0.8	(1,052)	(12,796)	-	-
Asia Pacific ex Japan	489,281	29.7	29,744	(24,066)	494,959	28.6
Latin America	218,535	13.3	18,232	(28,316)	208,451	12.0
Africa	5,995	0.4	4,469	-	10,464	0.6
	_________	_________	________	_________	________	_________
	1,455,675	88.4	108,043	(15,952)	1,547,766	89.5
	_________	_________	________	_________	________	_________
Preference shares
United Kingdom	7,488	0.5	559	-	8,047	0.5
	_________	_________	________	_________	________	_________
	7,488	0.5	559	-	8,047	0.5
	_________	_________	________	_________	________	_________
Fixed income
Europe ex UK	13,182	0.8	(3,152)	(10)	10,020	0.6
Asia Pacific ex Japan	69,365	4.2	(3,731)	74	65,708	3.8
Latin America	83,621	5.1	(3,147)	148	80,622	4.6
Africa	17,074	1.0	248	78	17,400	1.0
	_________	_________	________	_________	________	_________
	183,242	11.1	(9,782)	290	173,750	10.0
	_________	_________	________	_________	________	_________
Total investments	1,646,405	100.0	98,820	(15,662)	1,729,563	100.0
	_________	_________	________	_________	________	_________

SUMMARY OF NET ASSETS
	Valuation		Valuation
	30 June 2021		31 December 2020
	£'000	%	£'000	%
Equities	1,547,766	100.1	1,455,675	99.6
Preference shares	8,047	0.5	7,488	0.5
Fixed income	173,750	11.2	183,242	12.6
	_________	_________	________	_________
Other net assets	17,373	1.1	15,227	1.0
Prior charges{A}	(199,750)	(12.9)	(199,805)	(13.7)
	_________	_________	________	_________
	1,547,186	100.0	1,461,827	100.0
	_________	_________	________	_________
{A} All short-term and long-term bank loans and loan notes.

INVESTMENT PORTFOLIO

AS AT 30 JUNE 2021

Security	Country	£'000	%
Taiwan Semiconductor Manufacturing	Taiwan	77,162	4.5
GlobalWafers	Taiwan	71,628	4.1
Aeroporto del Sureste ADS	Mexico	61,379	3.6
CME Group	USA	52,317	3.0
Philip Morris International	USA	50,210	2.9
Unilever{A}	UK & Netherlands	48,688	2.8
Samsung Electronics	Korea	46,965	2.7
Vale do Rio Doce	Brazil	43,962	2.5
Broadcom Corporation	USA	41,401	2.4
Verizon Communications	USA	40,559	2.4
Top ten investments		534,271	30.9
Oversea-Chinese Bank	Singapore	38,547	2.2
Tryg	Denmark	34,633	2.0
Sociedad Quimica Y Minera De Chile	Chile	34,239	2.0
Epiroc	Sweden	32,764	1.9
TotalEnergies	France	32,754	1.9
AbbVie	USA	32,603	1.9
Telus	Canada	32,409	1.9
British American Tobacco	UK	30,800	1.8
Cisco Systems	USA	30,692	1.8
Taiwan Mobile	Taiwan	30,475	1.7
Top twenty investments		864,187	50.0
BHP Group	Australia	29,820	1.7
Banco Bradesco	Brazil	29,207	1.7
Hon Hai Precision Industry	Taiwan	29,098	1.7
Atlas Copco	Sweden	28,605	1.7
Roche Holdings	Switzerland	27,295	1.6
Pepsico	USA	26,802	1.5
Sanofi	France	26,542	1.5
Kimberly Clark de Mexico	Mexico	25,697	1.5
TC Energy	Canada	25,064	1.4
Intel Corporation	USA	24,374	1.4
Top thirty investments		1,136,691	65.7
{A}   Holding comprises UK and Netherland securities, split £25,383,000 and £23,305,000 respectively.
Bristol-Myers Squibb	USA	24,177	1.4
Johnson & Johnson	USA	23,849	1.4
Zurich Insurance	Switzerland	23,249	1.3
Singapore Telecommunications	Singapore	22,101	1.3
Enbridge	Canada	21,737	1.2
Ping An Insurance	China	21,267	1.2
China Resources Land	China	20,521	1.2
China Vanke	China	20,344	1.2
Siam Commercial Bank	Thailand	20,276	1.2
Enel	Italy	20,170	1.2
Top forty investments		1,354,382	78.3
Nutrien	Canada	20,000	1.1
Castrol India	India	19,531	1.1
Royal Dutch Shell	UK	19,026	1.1
Telkom Indonesia Persero	Indonesia	18,871	1.1
Schlumberger	USA	18,531	1.1
Telenor	Norway	18,309	1.1
Lotus Retail Growth	Thailand	18,069	1.0
Republic of South Africa 7% 28/02/31	South Africa	17,400	1.0
Standard Chartered	UK	15,411	0.9
Republic of Indonesia 6.125% 15/05/28	Indonesia	14,962	0.9
Top fifty investments		1,534,492	88.7
America Movil Sab De 6.45% 05/12/22	Mexico	14,541	0.9
United Mexican States 5.75% 05/03/26	Mexico	14,156	0.8
Telefonica Brasil	Brazil	13,967	0.8
Alfa 6.875% 25/03/44	Mexico	13,344	0.8
Petroleos Mexicanos 6.75% 21/09/47	Mexico	12,704	0.7
Republic of Dominica 6.85% 27/01/45	Dominican Republic	12,278	0.7
Republic of Indonesia 8.375% 15/03/34	Indonesia	11,040	0.7
Vodafone Group	UK	10,921	0.6
MTN	South Africa	10,464	0.6
Indocement Tunggal Prakarsa	Indonesia	10,284	0.6
Top sixty investments		1,658,191	95.9
HDFC Bank 7.95% 21/09/26	India	7,849	0.4
Power Finance Corp 7.63% 14/08/26	India	7,721	0.4
Petroleos Mexicanos 5.5% 27/06/44	Mexico	7,065	0.4
Housing Dev Finance Corp 8.43% 04/03/25	India	5,263	0.3
Power Finance Corp 8.2% 10/03/25	India	5,240	0.3
Republic of Turkey 9% 24/07/24	Turkey	5,037	0.3
Republic of Turkey 8% 12/03/25	Turkey	4,983	0.3
ICICI Bank 7.6% 07/10/23	India	4,588	0.3
ICICI Bank 7.42% 27/06/24	India	4,582	0.3
Republic of Indonesia 10% 15/02/28	Indonesia	4,463	0.3
Top seventy investments		1,714,982	99.2
Santander 10.375% Non Cum Pref	UK	4,071	0.2
General Accident 7.875% Cum Irred Pref	UK	3,976	0.2
Republic of Ecuador 0.5% 31/07/35	Ecuador	3,193	0.2
Republic of Ecuador 0.5% 31/07/30	Ecuador	2,421	0.2
Republic of Ecuador 0.5% 31/07/40	Ecuador	675	-
Republic of Ecuador 0.0% 31/07/30	Ecuador	245	-
Total investments		1,729,563	100.0

 

END

 

 

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