Half Yearly Results

RNS Number : 1388M

Murray International Trust PLC

21 August 2013

 



MURRAY INTERNATIONAL TRUST PLC

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2013

The Directors of Murray International Trust PLC report the unaudited results of the Company for the six months ended 30 June 2013.

INTERIM BOARD REPORT

Background

An abrupt realisation by financial markets that the United States cannot continue printing money in perpetuity resulted in a distinctly sobering conclusion to the period under review. Up until then, global equity markets had experienced material consecutive monthly gains based on hopes for global economic recovery and ample liquidity from central banks eager to inflate confidence and asset prices.  Anaemic growth prospects and weak fundamentals were largely overlooked by investors.  Equity market valuations expanded rapidly as stock prices moved sharply ahead of profit and dividend growth.  The optimism eventually succumbed to reality when the first hint that stimulative monetary policy might end prompted a rapid unwinding of excessive leveraged positions across all financial asset classes.  The resulting decline in prices, however, reversed only a portion of the positive returns secured earlier in the year.

Performance

The net asset value total return, with net income reinvested for the six months to 30 June 2013 was 9.3% compared with a total return of 12.4% on the Trust's benchmark (40% the FTSE World UK and 60% FTSE World ex UK).  Over the six month period the share price rose by 9.0% (total return), reflecting a very small reduction in the premium to net asset value on which the shares traded.

Absolute and relative performance was attributable to a mix of asset allocation and individual stock contributions.  By far the largest contributing factors to relative benchmark underperformance were the respective allocations to Latin America and North America.  Exposure to Brazil proved negative from both an asset allocation and currency stand-point, although strong stock selection in the Latin American region did partially offset this weakness.  The significant underweight position in North America proved very negative on an asset allocation basis, as this benchmark heavyweight returned over 20% in Sterling terms over the period.  The underweight position in Japanese equities also detracted from performance. Strong stock selection in Asia more than offset the negative impact of being overweight in the region, with solid absolute returns being secured. Having relatively low exposure to the UK was positive on an asset allocation basis as the UK market significantly underperformed the composite index over the period. Despite preserving capital in the residual fixed income allocation, this exposure also proved a drag on overall relative performance.

On 11 April 2013, the Directors announced a first interim dividend of 9.5p per Ordinary share for the current year compared with 9.0p per share last year.  Since the end of June a second interim dividend, also of 9.5p, has been announced and will be paid to shareholders on 15 November 2013.

Issue of New Shares

During the period under review the Company issued 3.8 million new Ordinary shares at a premium to the prevailing net asset value per Ordinary share at the time of each issue. Since the start of the issuance programme, over £330 million of new funds has been raised through the issue of new shares and, by issuing these shares at a premium, the Company is able to enhance slightly the net asset value per share whilst also improving the liquidity of its shares.  As previously stated, such issuance is also important for Share Plan Participants and other regular purchasers of the Company's shares because it ensures that the premium is managed. At the AGM of the Company held in April 2013, shareholders authorised the Company to issue new Ordinary shares for cash representing up to 10% of the issued share capital. The Board will continue to consider the merits of issuing new shares, at a premium, when there is unfulfilled demand in the market and it is in shareholders' interests to do so, subject to the overriding Listing Rule requirement not to issue more than 10% of the outstanding equity in any rolling 12 month period.

In the short term such issuance can have a dilutive impact upon the Company's earnings.  In practice this means that the dividend paid on newly issued shares may not have been earned in full. We mitigate the impact of this by paying quarterly dividends, investing the proceeds promptly and by not issuing shares during the period before a dividend is paid.  The objective is to ensure that the premium received on new shares more than covers the revenue accrued to those shares.

AIFMD

The Alternative Investment Fund Managers Directive ("the Directive") came into force on 22 July 2013 with a transitional period prior to full implementation in July 2014.  The Directive has significant consequences for the Company (and all similar investment companies) and will increase compliance and regulatory costs. The Board is in discussions with the Manager and other service providers concerning the implementation of the Directive, and will notify shareholders when exact details have been finalised.

Gearing

On 4 June 2013 the Company announced that the Royal Bank of Scotland plc had agreed to make available to the Company a new aggregate £120 million sterling loan ("the Loan"). The purpose of the Loan was to refinance the existing JPY ¥8.2bn loan with Barclays Bank plc and to increase the overall facilities available to the Company in light of the Company's increase in size. The new Loan was drawn down in two £60 million tranches repayable in four and five years' time which incur interest at all-in rates of 2.21% and 2.575% per annum respectively.  At the period end the Company had net gearing of 12.2%.

Outlook

Financial markets are likely to accept only grudgingly that the United States, and indeed most of the developed world, cannot continue unorthodox expansionary monetary policies indefinitely.  Having recently witnessed the destabilising effects of mere rhetoric towards withdrawing such stimulus, it is reasonable to assume that the effects on financial markets of actual implementation are likely to be similarly unpleasant.  Against a backdrop of fragile economic growth and persistent public sector over-indebtedness, policymakers will need to be skilful in exercising the difficult economic balancing act that lies before them.  Rising bond yields could quickly extinguish any nascent recovery in housing, consumption or investment spending, but failure to restore prudent monetary discipline runs the risk of eventual currency debasement and ultimate loss of credibility.  Negotiating such an uncertain economic landscape will not be easy.  Coupled with unrealistic market expectations, it is clear why emphasising capital preservation is so important.  Widespread portfolio diversification via investment in high-quality companies with robust balance sheets and solid dividend growth remains at the core of overall investment strategy, and offers the best prospect of achieving the Company's investment policy.

Kevin Carter

Chairman

20 August 2013

Principal Risks and Uncertainties

General

An investment in the shares of the Company is only suitable for investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses which may arise therefrom (which may be equal to the whole amount invested). Such an investment should be seen as long term in nature and complementary to existing investments in a range of other financial assets.

Changes in economic conditions (including, for example, interest rates and rates of inflation), industry conditions, competition, changes in the law, political and diplomatic events and trends, tax laws and other factors can substantially and adversely affect the value of investments and therefore the Company's performance and prospects.

Past performance of the Company, and of investments managed by the Manager, is not necessarily indicative of future performance.

The Shares

The market value of, and the income derived from, the shares can fluctuate and, notwithstanding the Board's discount and premium control policy, may not always reflect the Net Asset Value per share. There can be no guarantee that any appreciation in the value of the Company's investments will occur and investors may not get back the full value of their investment. No assurance can be given that any sale of the Company's investments would realise proceeds which would be sufficient to repay any borrowings or provide funds for any capital repayment to shareholders. Shareholders will bear the rewards and risks of the success or otherwise of the Company's investments.

The market value of the shares, as well as being affected by their Net Asset Value, also takes into account their dividend yield and prevailing interest rates, supply and demand for the shares, market conditions and general investor sentiment.

Borrowings

The Company may incur borrowings for investment purposes. Whilst the use of borrowings should enhance the total return on the shares where the return on the Company's underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is falling, further reducing the total return on the shares. As a result, the use of borrowings by the Company may increase the volatility of the Net Asset Value and market price per share.

There is no guarantee that any borrowings of the Company would be refinanced on their maturity either at all or on terms that are acceptable to the Company.

Dividends

The Company will only pay dividends on the Ordinary shares (and a capitalisation issue for B Ordinary shares) to the extent that it has profits (including available reserves) available for that purpose, which will largely depend on the amount of income which the Company receives on its investments and the timing of such receipt. The amount of dividends payable by the Company may fluctuate.

If under UK law or accounting rules and standards applicable to the Company, there were to be a change to the basis on which dividends could be paid by companies, this could have a negative effect on the Company's ability to pay dividends.

Investment Objective and Strategy

There is no guarantee that the Company's investment objective will be achieved.

The Company may from time to time invest in other listed investment companies. As a consequence of these investments, the Company may itself be indirectly exposed to gearing through the borrowings from time to time of these other investment companies. The Company has a policy of not investing more than 15% of its gross assets in other listed investment companies. The Net Asset Value, which is a factor in determining the market value of the shares, will be linked to the underlying share price performance of any such other investment companies.

Debt Instruments

The Company invests in fixed interest investments issued by corporate bodies and sovereign issuers. Bonds are subject to credit, liquidity and interest rate risks and in the event of a default there is a risk that the Net Asset Value may be adversely affected. Adverse changes in the financial position of an issuer of bonds or in general economic conditions may impair the ability of the issuer to make payments of principal and interest or may cause the liquidation or insolvency of an issuer. There can be no assurance as to the levels of default and/or recoveries that may be experienced with respect to bonds. Debt instruments held by the Company may be affected by changes in market sentiment or changes in interest rates that will, in turn, result in increases and decreases in the market value of those instruments. When interest rates decline, the value of the Company's investments in fixed rate debt obligations can be expected to rise and, when interest rates rise or are expected to rise, the value of those investments can be expected to decline.

To the extent that the Company invests in sub-investment grade securities, the Company may realise a higher yield than the yield offered by investment grade securities, but investment in such securities involves a greater volatility of price and a greater risk of default by the issuers of such securities, with potential loss of interest payment and principal. Sub-investment grade securities will be subject, in the judgment of a ratings agency, to uncertainties in terms of their performance in adverse conditions and will be speculative with respect to an issuer's capacity to meet interest payments and repay principal in accordance with its obligations. There can be no assurance that an issuer will not default or that the Company will be able to recover its investments in defaulted fixed interest debt instruments.

As bond investments of the Company mature, it may be difficult for the Company to obtain replacement investments having similar financial characteristics.

Market Price Risk

The fair value of equity and other financial securities held in the Company's portfolio fluctuates with changes in market prices. Prices are themselves affected by movements in currencies and interest rates and by other financial issues including the market perception of future risks.

Foreign Currency Risks

The Company's investments are principally in overseas securities. The Company accounts for its activities and reports its results in pounds sterling. The Company currently hedges most of the foreign currency exposure in respect of the liabilities attached to its borrowings. Where the Company does not hedge its currency exposure, which is currently the case with the investment portfolio, the movement of exchange rates may have a favourable or unfavourable effect on the gains and losses experienced on investments and the income derived from investments which are made or realised in currencies other than pounds sterling.

Charges to Capital

The Company currently deducts part of the management charge from capital. This increases distributable income at the expense of capital growth, which will either be eroded or constrained. The maintenance of a high level of dividend may also diminish capital values.

Discount and Premium Control Policy

The Company operates a discount and premium control policy. The operation of the discount control element of this policy could lead to a significant reduction in the size of the Company over time, which would increase the Company's total expense ratio and prejudice the ability of the Company to pay satisfactory levels of dividend to shareholders. While the Company intends to issue new shares and to resell shares held in treasury at a small premium to the Net Asset Value per share where demand exceeds supply, this will be dependent upon the Company being able to issue new shares and to resell shares held in treasury at a premium, on market conditions generally at the relevant time, upon shareholders in general meeting conferring appropriate authorities on the Board to issue further shares and, where required under the Prospectus Rules, upon a prospectus having been approved by the Financial Conduct Authority and published. The ability of the Company to operate the discount control policy will depend on the Company being able to purchase its own shares, which will be dependent upon shareholders in general meeting conferring authority on the Board to purchase its own shares. The Directors will seek renewal of this authority from shareholders annually and at other times should this prove necessary. However, there can be no guarantee that requisite shareholder approvals will be obtained.

In accordance with the Listing Rules, the extent of each buy-back authority which will be sought by the Company from shareholders in general meeting will be limited to 14.99% of the Company's issued share capital as at the date on which such authority is granted. In order to continue purchasing its own shares once any such authority has been exhausted, the Company would be required to seek a renewal of such authority from shareholders in general meeting.

The ability of the Company to purchase its own shares will be subject to the Companies Act 2006 and all other applicable legislation, rules and regulations of any government, regulatory body or market applicable to the Directors or the Company and, in particular, will be dependent on the availability of distributable reserves.

Cessation of Investment Trust Status

The Company attempts to conduct its business so as to satisfy the conditions for approval as an investment trust under Part 24 Chapter 4 of the Corporation Tax Act 2010. In respect of each accounting period for which approval is granted, the Company will be exempt from United Kingdom taxation on its capital gains. Any breach of the tests that a company must meet to obtain approval as an investment trust company could lead to the Company being subject to tax on capital gains.

Tax and Accounting

Any change in the Company's tax status or in taxation legislation or accounting practice could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders. Representations in this document concerning the taxation of investors are based upon current tax law and practice which are subject to change.

Any change in accounting standards may adversely affect the value of the Company's assets in its books of account or restrict the ability of the Company to pay dividends.

Regulatory

The Alternative Investment Fund Managers Directive ("the Directive") came into force on 22 July 2013 with a transitional period prior to full implementation in July 2014. The Directive has significant consequences for the Company (and all similar investment companies) and will increase compliance and regulatory costs. The Board will continue to monitor the progress and likely implications of the Directive.

Reliance Upon The Manager

The ability of the Company to successfully pursue its investment policy is significantly dependent upon the expertise of the Manager and the principal members of its management team. The Company does not currently have employees or own any facilities and depends on the Manager for the day to day management and operation of its business. The loss of any of the Manager's management team could reduce the Company's ability to pursue successfully its planned investment policy.

Reliance Upon Third Party Service Providers

The Company has no employees and the Directors have all been appointed on a non executive basis. The Company is therefore reliant upon the performance of third party service providers for its executive function. In particular, the Manager and the Secretary will be performing services which are integral to the operation of the Company. The failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to pursue successfully its investment policy.

Fluctuations In Operating Results

The Company may experience fluctuations in its operating results from period to period due to a number of factors, including changes in the values of investments made by the Company, changes in the amount of distributions, dividends or interest paid in respect of investments in the portfolio, changes in the Company's operating expenses, and general economic and market conditions. Such variability may lead to volatility in the market price of the shares and cause the Company's results for a particular period not to be indicative of its performance in a future period.

Related Party Transactions

Aberdeen Asset Managers Limited acts as 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 Annual Report for 2012, a copy of which is available on the Company's website.

Going Concern

The Company's assets consist of a diverse portfolio of listed equities and bonds which in most circumstances are realisable within a very short timescale. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Directors' Responsibility Statement

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

·    the condensed set of financial statements contained within the Half-Yearly Financial Report has been prepared in accordance with the Accounting Standards Board's Statement "Half-Yearly Financial Reports"; and

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

The Half-Yearly Report for the six months to 30 June 2013 comprises the Interim Board Report and a condensed set of financial statements, and has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

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

Kevin Carter

Chairman

20 August 2013

HIGHLIGHTS

Financial Highlights	30 June 2013	31 December 2012	% change
Total assets{A} (£'000)	1,518,605	1,343,768	+13.0
Equity shareholders' funds (£'000)	1,315,378	1,192,243	+10.3
Share price - Ordinary share	1120.0p	1048.0p	+6.9
Share price - B Ordinary share	1250.0p	1107.5p	+12.9
Net asset value per Ordinary and B Ordinary share	1043.8p	975.8p	+7.0
Premium to net asset value per Ordinary share	7.3%	7.4%
{A} Represents total assets less current liabilities (before deducting prior charges).

Performance (total return)	Six months ended 30 June 2013	Year ended 31 December 2012
Net asset value total return per Ordinary and B Ordinary share with net income reinvested	+9.3%	+14.0%
Share price	+9.0%	+19.0%
Benchmark	+12.4%	+11.4%
Source: Aberdeen Asset Management, Morningstar & Russell Mellon

INCOME STATEMENT

		Six months ended
		30 June 2013
		(unaudited)
		Revenue	Capital	Total
	Note	£'000	£'000	£'000
Gains on investments		-	76,487	76,487
Income	3	34,893	-	34,893
Investment management fees		(990)	(2,310)	(3,300)
Performance fees		-	3,899	3,899
Other expenses		(1,061)	-	(1,061)
Currency (losses)/gains		-	(248)	(248)
		________	________	________
Net return before finance costs and taxation		32,842	77,828	110,670
Finance costs		(605)	(1,412)	(2,017)
		________	________	________
Return on ordinary activities before tax		32,237	76,416	108,653
Tax on ordinary activities		(1,484)	222	(1,262)
		________	________	________
Return attributable to equity shareholders		30,753	76,638	107,391
		________	________	________
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	24.7	61.6	86.3
		________	________	________
The total column of the Income Statement is the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains or losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	4	27,558	-	27,558
		________	________	________
The above dividend information does not form part of the Income Statement.

INCOME STATEMENT (Cont'd)

		Six months ended
		30 June 2012
		(unaudited)
		Revenue	Capital	Total
	Note	£'000	£'000	£'000
Gains on investments		-	39,044	39,044
Income	3	30,341	-	30,341
Investment management fees		(861)	(2,009)	(2,870)
Performance fees		-	(2,211)	(2,211)
Other expenses		(987)	-	(987)
Currency (losses)/gains		-	44	44
		________	________	________
Net return before finance costs and taxation		28,493	34,868	63,361
Finance costs		(631)	(1,474)	(2,105)
		________	________	________
Return on ordinary activities before tax		27,862	33,394	61,256
Tax on ordinary activities		(1,946)	254	(1,692)
		________	________	________
Return attributable to equity shareholders		25,916	33,648	59,564
		________	________	________
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	22.6	29.3	51.9
		________	________	________
The total column of the Income Statement is the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains or losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	4	23,708	-	23,708
		________	________	________
The above dividend information does not form part of the Income Statement.

INCOME STATEMENT (Cont'd)

		Year ended
		31 December 2012
			(audited)
		Revenue	Capital	Total
	Note	£'000	£'000	£'000
Gains on investments		-	101,381	101,381
Income	3	55,141	-	55,141
Investment management fees		(1,763)	(4,116)	(5,879)
Performance fees		-	(3,246)	(3,246)
Other expenses		(1,944)	-	(1,944)
Currency (losses)/gains		-	692	692
		________	________	________
Net return before finance costs and taxation		51,434	94,711	146,145
Finance costs		(1,246)	(2,911)	(4,157)
		________	________	________
Return on ordinary activities before tax		50,188	91,800	141,988
Tax on ordinary activities		(3,532)	382	(3,150)
		________	________	________
Return attributable to equity shareholders		46,656	92,182	138,838
		________	________	________
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	39.8	78.5	118.3
		________	________	________
The total column of the Income Statement is the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains or losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	4	44,911	-	44,911
		________	________	________
The above dividend information does not form part of the Income Statement.

BALANCE SHEET

		As at	As at	As at
		30 June 2013	30 June 2012	31 December 2012
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss		1,478,227	1,247,272	1,327,532
		________	________	________
Current assets
Debtors		8,435	6,681	5,169
Cash and short-term deposits		41,075	10,855	25,940
		________	________	________
		49,510	17,536	31,109
		________	________	________
Creditors: amounts falling due within one year
Bank loans		(15,266)	(65,728)	(58,525)
Other creditors		(9,132)	(8,494)	(14,873)
		________	________	________
		(24,398)	(74,222)	(73,398)
		________	________	________
Net current assets/(liabilities)		25,112	(56,686)	(42,289)
		________	________	________
Total assets less current liabilities		1,503,339	1,190,586	1,285,243
Creditors: amounts falling due after more than one year
Bank loans and Debentures		(186,524)	(98,435)	(87,664)
Other creditors		(1,437)	(4,560)	(5,336)
		________	________	________
		(187,961)	(102,995)	(93,000)
		________	________	________
Net assets		1,315,378	1,087,591	1,192,243
		________	________	________
Capital and reserves
Called-up share capital		31,505	29,384	30,546
Share premium account		324,588	236,816	282,240
Capital redemption reserve		8,230	8,230	8,230
Capital reserve	6	883,229	748,067	806,596
Revenue reserve		67,826	65,094	64,631
		________	________	________
Equity shareholders' funds		1,315,378	1,087,591	1,192,243
		________	________	________
Net asset value per Ordinary and B Ordinary share (pence)	7	1043.8	925.3	975.8
		________	________	________

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

Six months ended 30 June 2013 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2012	30,546	282,240	8,230	806,596	64,631	1,192,243
Return on ordinary activities after taxation	-	-	-	76,638	30,753	107,391
Dividends paid (see note 4)	-	-	-	-	(27,558)	(27,558)
Issue of new shares	959	42,348	-	(5)	-	43,302
	______	______	______	______	______	______
Balance at 30 June 2013	31,505	324,588	8,230	883,229	67,826	1,315,378
	______	______	______	______	______	______
Six months ended 30 June 2012 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2011	28,000	185,712	8,230	714,424	62,886	999,252
Return on ordinary activities after taxation	-	-	-	33,648	25,916	59,564
Dividends paid (see note 4)	-	-	-	-	(23,708)	(23,708)
Issue of new shares	1,384	51,104	-	(5)	-	52,483
	______	______	______	______	______	______
Balance at 30 June 2012	29,384	236,816	8,230	748,067	65,094	1,087,591
	______	______	______	______	______	______
Year ended 31 December 2012 (audited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2011	28,000	185,712	8,230	714,424	62,886	999,252
Return on ordinary activities after taxation	-	-	-	92,182	46,656	138,838
Dividends paid (see note 4)	-	-	-	-	(44,911)	(44,911)
Issue of new shares	2,546	96,528	-	(10)	-	99,064
	______	______	______	______	______	______
Balance at 31 December 2012	30,546	282,240	8,230	806,596	64,631	1,192,243
	______	______	______	______	______	______

CASH FLOW STATEMENT

	Six months ended	Six months ended	Year ended
	30 June 2013	30 June 2012	31 December 2012
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Net return before finance costs and taxation	110,670	63,361	146,145
Adjustments for:
Gains on investments	(76,487)	(39,044)	(101,381)
Effect of foreign exchange losses/(gains)	248	(44)	(692)
Amortisation of fixed income book cost	(635)	(204)	(280)
(Increase)/decrease in accrued income	(1,495)	455	1,192
(Increase)/decrease in other debtors	(24)	(865)	115
(Decrease)/increase in accruals	(7,138)	70	363
Tax on unfranked income - overseas	(2,196)	(2,204)	(2,891)
	________	________	________
Net cash inflow from operating activities	22,943	21,525	42,571
Returns on investment and servicing of finance
Interest paid	(1,817)	(2,127)	(4,233)
	________	________	________
Net cash outflow from servicing of finance	(1,817)	(2,127)	(4,233)
Financial investment
Purchases of investments	(161,073)	(111,038)	(162,382)
Sales of investments	93,919	43,978	77,474
	________	________	________
Net cash outflow from financial investment	(67,154)	(67,060)	(84,908)
Equity dividends paid	(27,558)	(23,708)	(44,911)
	________	________	________
Net cash outflow before financing	(73,586)	(71,370)	(91,481)
Financing
Share issue	43,302	52,483	99,064
Loan repayment	(59,275)	-	-
Loan drawdown	120,000	-	-
	________	________	________
Net cash inflow from financing	104,027	52,483	99,064
	________	________	________
Increase/(decrease) in cash	30,441	(18,887)	7,583
	________	________	________
Analysis of changes in cash during the period
Opening balance	25,940	32,600	32,600
Increase/(decrease) in cash as above	30,441	(18,887)	7,583
Currency differences	(15,306)	(2,858)	(14,243)
	________	________	________
Closing balances	41,075	10,855	25,940
	________	________	________

NOTES TO THE ACCOUNTS

1.	Accounting policies
	(a)	Basis of accounting
		The financial statements have been prepared in accordance with applicable UK Accounting Standards, with pronouncements on Half-Yearly Reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice 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.
		The financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP).
		The interim accounts have been prepared using the same accounting policies as the preceding annual accounts.
	(b)	Dividends payable
		Dividends are recognised in the period in which they are paid.

2.	Taxation
	The taxation expense reflected in the Income Statement 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 2013 is an effective rate of 23.25%. This is above the current corporation tax rate of 23% because prior to 1 April 2013 the prevailing corporation tax rate was 24%.

		Six months ended	Six months ended	Year ended
		30 June 2013	30 June 2012	31 December 2012
3.	Income	£'000	£'000	£'000
	Income from investments
	UK dividends	5,274	4,873	7,721
	UK unfranked investment income	345	585	1,025
	Overseas dividends	26,401	22,400	41,477
	Overseas interest	2,872	2,480	4,913
		________	________	________
		34,892	30,338	55,136
		________	________	________
	Interest
	Deposit interest	1	3	5
		________	________	________
	Total income	34,893	30,341	55,141
		________	________	________

		Six months ended	Six months ended	Year ended
		30 June 2013	30 June 2012	31 December 2012
4.	Ordinary dividends on equity shares	£'000	£'000	£'000
	Third interim dividend 2012 of 9.00p (2011 - 8.00p)	10,915	8,890	8,891
	Final dividend 2012 of 13.50p (2011 - 13.00p)	16,643	14,818	14,818
	First interim dividend 2012 of 9.00p	-	-	10,499
	Second interim dividend 2012 of 9.00p	-	-	10,703
		________	________	________
		27,558	23,708	44,911
		________	________	________
	A first interim dividend for 2013 of 9.50p (2012 - 9.00p) was paid on 16 August 2013 to shareholders on the register on 12 July 2013. The ex-dividend date was 10 July 2013.
	A second interim dividend for 2013 of 9.50p (2012 - 9.00p) will be paid on 15 November 2013 to shareholders on the register on 11 October 2013. The ex-dividend date is 9 October 2013.
	In accordance with the terms of the Articles of Association of the Company the Directors will resolve to make bonus issues of B Ordinary shares to B Ordinary shareholders which correspond to the first and second interim dividends.

		Six months ended	Six months ended	Year ended
		30 June 2013	30 June 2012	31 December 2012
5.	Returns per share	£'000	£'000	£'000
	Based on the following figures:
	Revenue return	30,753	25,916	46,656
	Capital return	76,638	33,648	92,182
		________	________	________
	Total return	107,391	59,564	138,838
		________	________	________
	Weighted average number of Ordinary shares	123,506,933	113,903,206	116,468,656
	Weighted average number of B Ordinary shares	909,544	876,271	883,841
		__________	__________	__________
	Weighted average number of Ordinary shares assuming conversion of B Ordinary shares	124,416,477	114,779,477	117,352,497
		__________	__________	__________

6.	Capital reserves
	The capital reserve reflected in the Balance Sheet at 30 June 2013 includes gains of £445,721,000 (30 June 2012 - gains of £342,059,000; 31 December 2012 - gains of £403,974,000) which relate to the revaluation of investments held at the reporting date.

7.	Diluted net asset value
	The diluted net asset value per share and the net asset value attributable to the Ordinary shares (including conversion of the B Ordinary shares) at the period end calculated in accordance with the Articles of Association were as follows:
		As at	As at	As at
		30 June 2013	30 June 2012	31 December 2012
	Attributable net assets (£'000)	1,315,378	1,087,591	1,192,243
		________	________	________
	Number of shares in issue:
	Ordinary shares	125,098,742	116,653,204	121,283,242
	B Ordinary shares	921,545	882,825	899,997
		___________	___________	___________
		126,020,287	117,536,029	122,183,239
		___________	___________	___________

8.	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 on investments in the Income Statement. The total costs were as follows:
		Six months ended	Six months ended	Year ended
		30 June 2013	30 June 2012	31 December 2012
		£'000	£'000	£'000
	Purchases	424	212	301
	Sales	174	38	71
		________	________	________
		598	250	372
		________	________	________

9.	The financial information in this Half-Yearly Financial Report comprises non-statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 30 June 2013 and 30 June 2012 has not been audited.
	The financial information for the year ended 31 December 2012 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified under Section 498 (2), (3) and (4) of the Companies Act 2006.

10.	This Half-Yearly Financial Report was approved by the Board on 20 August 2013.

The Half Yearly Report will be printed and issued to shareholders and further copies will be available to the public at the registered office of the Company, 40 Princes Street, Edinburgh EH2 2BY and on the Company's web site www.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

20 August 2013

SUMMARY OF INVESTMENT CHANGES

	Valuation		Appreciation/		Valuation
	30 June 2013		(depreciation)	Transactions	31 December 2012
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	210,913	13.9	4,556	28,801	177,556	13.2
North America	209,558	13.8	19,213	55,391	134,954	10.0
Europe ex UK	238,709	15.7	18,530	(1,007)	221,186	16.5
Japan	53,879	3.5	4,817	(4,374)	53,436	4.0
Asia Pacific ex Japan	362,284	23.9	36,634	(25,669)	351,319	26.1
Latin America	290,806	19.1	(5,371)	(9,097)	305,274	22.7
Africa	16,170	1.1	1,181	14,989	-	-
	________	_______	_______	_______	________	_______
	1,382,319	91.0	79,560	59,034	1,243,725	92.5
	________	_______	_______	_______	________	_______
Fixed income
United Kingdom	15,807	1.0	(354)	78	16,083	1.2
Europe ex UK	13,602	0.9	357	69	13,176	1.0
Asia Pacific ex Japan	11,938	0.8	(1,289)	9	13,218	1.0
Latin America	54,561	3.6	(1,787)	15,018	41,330	3.1
	________	_______	_______	_______	________	_______
	95,908	6.3	(3,073)	15,174	83,807	6.3
	________	_______	_______	_______	________	_______
Other net assets	40,378	2.7	24,142	-	16,236	1.2
	________	_______	_______	_______	________	_______
Total assets{A}	1,518,605	100.0	100,629	74,208	1,343,768	100.0
	________	_______	_______	_______	________	_______
{A} Figure for 30 June 2013 excludes bank loan of £15,266,000 (31 December 2012 - £58,525,000) which is shown as a current liability in the Balance Sheet.

SUMMARY OF NET ASSETS

	Valuation		Valuation
	30 June 2013		30 June 2012
	£'000	%	£'000	%
Equities	1,382,319	105.1	1,164,250	107.1
Fixed income	95,908	7.3	83,022	7.6
Other net assets	40,378	3.0	9,042	0.8
Prior charges	(201,790)	(15.3)	(164,163)	(15.1)
Other long term liabilities	(1,437)	(0.1)	(4,560)	(0.4)
	________	_______	_______	_______
Equity shareholders' funds	1,315,378	100.0	1,087,591	100.0
	________	_______	_______	_______

INVESTMENT PORTFOLIO

AS AT 30 JUNE 2013

		Valuation	Total assets
Security	Country	£'000	%
British American Tobacco {A}	UK & Malaysia	60,674	4.0
Unilever Indonesia	Indonesia	56,081	3.7
Aeroportuario del Sureste ADS	Mexico	54,894	3.6
Souza Cruz	Brazil	45,780	3.0
Taiwan Mobile	Taiwan	45,621	3.0
Taiwan Semiconductor Manufacturing	Taiwan	42,107	2.8
Philip Morris International	USA	38,808	2.6
Kimberly Clark de Mexico	Mexico	36,192	2.4
Roche Holdings	Switzerland	35,995	2.4
Standard Chartered	UK	34,248	2.2
Top ten investments		450,400	29.7
Singapore Telecommunications	Singapore	32,838	2.2
Vale do Rio Doce {B}	Brazil & USA	32,788	2.2
Nordea	Sweden	32,236	2.1
Fomento Economico Mexicano	Mexico	31,983	2.1
Casino	France	30,836	2.0
Zurich Financial Services	Switzerland	30,730	2.0
Telus	Canada	30,679	2.0
Johnson & Johnson	USA	30,003	2.0
Verizon Communications	USA	29,872	2.0
Royal Dutch Shell	UK	29,594	1.9
Top twenty investments		761,959	50.2
Tenaris ADR	Mexico	29,192	1.9
Potash Corporation of Saskatchewan	Canada	28,570	1.9
Telefonica Brasil	Brazil	28,123	1.8
Total	France	27,939	1.8
Pepsico	USA	26,963	1.8
BHP Billiton	UK	26,912	1.8
PetroChina	China	26,649	1.8
HSBC	UK	26,598	1.8
Daito Trust Construction	Japan	26,375	1.7
Weir Group	UK	26,332	1.7
Top thirty investments		1,035,612	68.2
QBE Insurance Group	Australia	25,466	1.7
ENI	Italy	25,290	1.7
Public Bank	Malaysia	24,804	1.6
Baxter International	USA	24,663	1.6
Wing Hang Bank	Hong Kong	23,090	1.5
Banco Bradesco{C}	Brazil	22,026	1.4
Coca-Cola Amatil	Australia	21,623	1.4
Petrobras ADR	Brazil	18,327	1.2
GDF Suez	France	16,247	1.1
MTN	South Africa	16,170	1.1
Top forty investments		1,253,318	82.5
Vodafone Group	UK	15,779	1.0
Nestlé	Switzerland	15,109	1.0
Novartis	Switzerland	14,951	1.0
Astellas Pharmaceutical	Japan	14,641	1.0
Centrica	UK	14,408	0.9
Swire Pacific B	Hong Kong	13,954	0.9
Petroleos Mexicanos 5.5% 27/06/44	USA	13,648	0.9
Portugal Telecom 4.5% 16/06/25	Portugal	13,602	0.9
PTT Exploration and Production	Thailand	13,435	0.9
Oversea-Chinese Bank	Singapore	12,983	0.9
Top fifty investments		1,395,828	91.9
Other investments		82,399	5.4
Total investments		1,478,227	97.3
Net current assets excluding bank loans		40,378	2.7
Total assets		1,518,605	100.0
{A}      Holding comprises equity holdings in both UK and Malaysia, split £37,043,000 and £23,631,000 respectively.
{B}      Holding comprises equity and fixed income securities, split £22,775,000 and £10,013,000 respectively.
{C}      Holding comprises equity and fixed income securities, split £12,634,000 and £9,392,000 respectively.

 

END

 

 

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