Final Results

RNS Number : 3667N

Pacific Horizon Investment Tst PLC

06 September 2013

 



Preliminary Statement

Pacific Horizon Investment Trust PLC

Results for the year to 31 July 2013

The following is the unaudited preliminary statement for the year to 31 July 2013 which was approved by the Board on 5 September 2013.

Chairman's Statement

Performance

In the year to 31 July 2013 the Company's net asset value per share (NAV) rose 5.8% compared to a rise in the comparative index, MSCI All Country Asia ex Japan Index (in sterling terms), of 9.1% over the same period. The share price increased by 4.8% and the discount widened from 13.1% to 13.9%. The Managers' Review below contains a detailed explanation of performance along with thoughts on markets.

Gearing was not used during the year and, at the year end, cash and equivalents were equal to 1.4% of shareholders' funds. Earnings per share decreased from 1.97p to 1.66p. The Board is recommending that a dividend of 1.50p should be paid, the same as last year.

The performance of the Company over the year was unsatisfactory when compared to that of our competitors and against our chosen comparative index. The reasons for this are explained in the Managers' Review. The Board considers that, subject to receiving the necessary shareholder approval at the forthcoming AGM, it is appropriate to introduce a bi-annual tender offer at a 2% discount to NAV, less costs, if the discount averages more than 9% during the six month periods to 31 July and 31 January of each year (or the preceding business day), the discount being calculated by reference to the fair value cum income NAV. Each tender offer would be for up to 5% of the Company's shares and the first such tender would be in respect of the six month period to 31 January 2014. The Board does not believe that the continuous buying back of shares in the market achieves the same benefits for shareholders as a bi-annual tender: it therefore proposes to give shareholders the opportunity to tender shares for sale on a regular basis should they wish to do so. Shareholders should note that these tender offers will, however, remain at the discretion of the Board and will be subject to the prevailing market conditions at the time, so they should place no expectation on these tender offers being implemented. If such a tender offer is implemented, a separate circular and tender form will be sent to shareholders following the expected first tender offer date of 31 January2014, which will set out the full terms and conditions of the tender offer and the procedure for tendering shares.

During the year the Company bought back a total of 1,080,000 ordinary shares, representing 1.4% of the issued share capital as at 31 July 2012, at a cost of £1,753,000. At the forthcoming AGM, the Board will be asking shareholders to renew the mandate to repurchase up to 14.99% of the outstanding shares. This will be done in addition to the proposed tender mechanism as the Board believes that it would be in the overall best interest of shareholders to commit to buying back shares in an opportunistic fashion rather than to just establish and implement a published formula for redemptions. 

The Board holds regular discussions with the Managers about the performance of the Company and the potential consequences of future unsatisfactory results.  The Board is satisfied that the Managers' investment process, philosophy and investment style, with a focus on stock selection rather than top down macro views on sectors and countries, is a sensible strategic approach for investing in the region. Whilst the Board believes that the investment strategy will achieve both satisfactory and much improved results in the longer term, the timing of any improvement is uncertain. 

Management Fee

With effect from 1 April 2013, the annual management fee payable by the Company has been reduced from a flat rate of 1% of net assets to a rate of 0.95% on the first £50m of net assets and 0.65% on the balance. The fee will continue to be calculated and paid on a quarterly basis.  The Board welcomes the Managers' flexibility and willingness to reduce the fee and believes that it will be beneficial to shareholders.   The advent of the Retail Distribution Review emphasisesthe necessity for investment trusts to continue to be competitive with other savings products.

Regulation

The Board has been in discussions with the Managers on how best to address the requirements of the EU Alternative Investment Fund Managers Directive. This came into law in July 2013 although the Company has until July 2014 to comply fully with the legislation. The Directive requires the Company to appoint an Alternative Investment Fund Manager (AIFM) who will be responsible for portfolio and risk management and will be regulated under the Directive. Having taken external advice, the Board is currently of the view that Baillie Gifford is best positioned to act as the Company's AIFM.

Annual General Meeting

This year's AGM will take place on 29 October 2013 at the offices of Baillie Gifford & Co in Edinburgh at 10.45am. The Manager will make a presentation and, along with the Directors, will answer any questions from shareholders. I hope to see as many of you as possible there.

Outlook

The Managers remain focussed on investing in companies that have the potential to grow over the medium to longer term.  The Board remains optimistic about the growth prospects for companies in the region and the ability of our Managers to capitalise on investment in sound companies at attractive valuations.

Jean Matterson

Chairman

5 September 2013

Past performance is not a guide to future performance. The value of Pacific Horizon shares and any income from those shares is not guaranteed and could go down as well as up

Managers' Review

Overview

Performance relative to the comparative index was disappointing over the period, with much of the underperformance occurring in the first half of the Company's year. This reverses some of the stronger relative performance achieved in the prior year. Consistent with our fundamental, bottom up investment style it is stock specifics that have driven returns, rather than sector or geographic exposures.

In recent periods the Company's investment philosophy has been out of favour with much of the investment community. Companies displaying 'earnings certainty' are particularly attractive safe havens at a time of global economic volatility. The consumer staples sector - a low exposure for the Company - has been a good example of this trend where companies showing healthy albeit unexciting growth have been rerated as investors seek less perceived risk in an uncertain investment environment. The characteristics we look for when investing in companies include strong growth potential, sustainable competitive advantages, attractive financials and sensible management. In addition, we continue to target stocks with very significant long term opportunities, where a wider range of potential outcomes leads to a mispricing of that opportunity. The market tendency to focus on near term uncertainty, rather than look out towards the possibility of very significant cash flow generation over the long term, leads to excellent investment opportunities in some of the highest quality growth companies. It is these companies that have struggled in this period of macroeconomic uncertainty. 

Investment Environment

In general, the economies of the Asia Pacific region have performed well over the last year. Notwithstanding this, investment appetite for the region is fickle as sentiment continues to be heavily influenced by events in the more developed markets. The impact of Federal Reserve Chairman Ben Bernanke's statement regarding the timing of the end of quantitative easing in the US - itself in response to a better performing US economy - highlighted the issue, with markets across the world reacting negatively to the prospect of reduced liquidity, only to rebound as the statement was later clarified. An environment where global liquidity is less abundant is likely to be troublesome for those economies where growth has become excessively reliant on overseas funding to support development.  More significant is the change in expectations regarding the strength of the US recovery and the likely positive impact on the US dollar. A stronger US recovery could be very positive for a wide range of businesses in Asia, especially in the technology sector, where we have been adding exposure. Examples of our technology focussed holdings include the Taiwanese integrated circuit design company Mediatek, Chinese internet business Tencent, Indian IT services business Tech Mahindra and Taiwan Semiconductor Manufacturing (TSMC), a Taiwanese foundry which manufactures semiconductor chips. 

The expected rate and composition of economic growth of China has a significant impact on the investment environment for a large number of companies in the Company's investment universe. Economic growth has moderated and expectations are for this to continue. The newly installed leadership appears comfortable with anything in excess of 7% for the annual rate of GDP growth, which is a healthy level.  Far more important, however, are the consequences of the transition from an investment-led to a consumer-led economy, a slow but necessary process. The Company currently has no holdings in the materials sector, driven by a belief that weakening investment spending from China will likely have a significantly detrimental effect on the demand for commodities in general. We are cautious on the outlook for the high-end property and luxury retail sectors.  These are areas that have benefited hugely from excess profits accruing to a narrow segment of society and the current returns are unlikely to be sustained. Our preference is to invest in those areas likely to benefit from favourable policy, such as Kunlun Energy and Towngas China in the gas industry, or those operating in the internet environment, such as Baidu and Tencent. On this note, the new leadership has clearly demonstrated appetite for reform with further liberalisation of pricing in both the energy and financial sectors.   

Given the technology and export exposure of Korea and Taiwan, these former 'Tiger economies' are well placed to capitalise on a stronger than anticipated recovery from the US. With many of the largest businesses enjoying significant export growth, this may be a very interesting area for investors. North Korea is a wild card, although it has been relatively quiet of late. Although the advent of 'Abenomics' in Japan caused considerable market volatility, particularly given the moves in the currency, we believe that the strength of the competitive advantages commanded by the businesses in which we invest bodes well for their future performance. Finally, in Taiwan, progress on cross strait reforms has continued with mutual easing of banking regulations and ownership restrictions, a positive step over the long term.

We noted at this time last year a frustration at a lack of suitable investment opportunities in India. Little has changed at the macroeconomic or political level: growth is disappointing relative to potential, the twin deficits are an issue and politics is an area fraught with tensions. India's central bank had been cutting rates aggressively in 2013 but more recently has  tightened liquidity in an attempt to protect its currency, which is now at the weakest level it has been over the past two decades. Valuations are, however, starting to look much more attractive, particularly for those businesses that have significant dollar earning streams and which are likely to perform better should the US continue to recover. 

The other challenge we highlighted last year was the investor euphoria surrounding some of the smaller emerging ASEAN markets, particularly in light of the Company's low exposure here. We have been resolute in our view that, in the absence of social and political reform, these economies are doing little more than storing up problems for the future. Foreign investment flows have added additional 'froth' to both debt and equity valuations which, in our view, makes the better performing companies, despite their fundamental attractions, look expensive. Over the past year the Philippines has been a very strong performer, but other ASEAN markets have been less impressive, particularly Indonesia which only rose 5.9% in sterling terms (11.3% in local currency terms), lagging the Asia Pacific Region as a whole by a sizeable margin.

Portfolio Review

Technology companies now account for over one third of the Company, a function of the number of exciting opportunities for investment in this sector. Rather than being a homogenous group, the underlying companies benefit from a number of different commercial advantages. The largest single holding for the Company is Samsung Electronics, a company that has invested billions of dollars over many years and is now benefiting from the success of its Galaxy range of smartphones and tablets. It is perhaps the only credible competitor to Apple's iPhone and iPad, underlining the progress the business has made over the past decade. Other globally competitive holdings include TSMC, the world's largest foundry business, and Hon Hai Precision Industries, the world's largest electronic manufacturing service provider. It is difficult to imagine a home anywhere in the developed world that does not contain at least one product that has passed through the facilities of one of these two companies. Other holdings that are beneficiaries of the success of these technological developments include SFA Engineering, a factory automation and logistics systems manufacturer, Global Display, a technology component manufacturer and ASM Pacific Technology, a semiconductor equipment manufacturer. A second group of companies in the technology sector are the internet businesses Baidu, Tencent and NHN. The investment merit of the internet has been reflected in the portfolio for a number of years, and stems from strong growth potential, excellent business models and entrepreneurial management teams. A new addition to the technology holdings during the year has been the Indian IT service providers Tech Mahindra and HCL Technologies. Both are likely to benefit as investment spending in Western markets starts to increase after a number of unproductive years. Another technology company to appear in the top ten list of holdings is Mediatek. This business is benefiting from many of the same opportunities as Samsung Electronics and TSMC, particularly the global shift to mobile computing, although the difference is that this company caters for lower end customers in developing markets.

Financials is the next largest sector, although the Company holds no banks in a number of the larger countries - China, Korea and Taiwan - where we feel returns are likely to be structurally challenged or depressed for many years.  Holdings are again focused on the merits of the individual companies, be it the turnaround potential that new management brings at Federal Bank or the very long duration growth opportunity available from Renminbi liberalisation at Bank of China (Hong Kong).  Insurance is an altogether more exciting prospect for us; the Company holds significant positions in Korean insurers Samsung Fire & Marine and Hyundai Marine and Fire, Chinese insurer Ping An and China Life Insurance (Taiwan).  These should all benefit from a number of fundamental social and economic changes in the coming years, such as demographics, increased financial sophistication, increasing wealth and consequent development of the insurance markets to provide mitigation for the increased risks to which a more wealthy society is exposed. 

The overall shape of the portfolio has not changed significantly since last year. The largest country exposures are Hong Kong and China, followed by Korea and then Taiwan. The Company retains little exposure to the smaller ASEAN markets. The weighting in India has increased from 3.3% to 9.1% during the year as opportunities have arisen. By sector, aside from the largest two sectors discussed above, there have only been minor changes; excessive valuations amongst companies in the consumer sectors have led to a reduction and, as previously mentioned, there are now no holdings in the materials sector. The turnover level has increased from the very low levels reported last year, with 14 new holdings purchased and 18 sold over the period. The number of holdings in the portfolio has again been managed down to 65, which is an appropriate level for a higher conviction strategy. 

Outlook

We recognise that recent performance has been unsatisfactory. We are nonetheless convinced that our philosophy, process and investment style constitute the correct strategic approach to deliver strong performance in the future. We strongly believe that changing investment style is one of the most dangerous traps to fall into when performance has been disappointing and we do not want to make this mistake. The portfolio is invested in a group of attractive businesses that we believe will generate superior returns over the long term. Good operational performance at a number of our holdings has yet to be rewarded in share price terms and the market's dislike of uncertainty has resulted in a number of our holdings appearing severely underpriced. We are confident that our long term, fundamental approach to investing will yield very acceptable results for shareholders.

Past performance is not a guide to future performance.

Income Statement (unaudited)

	For the year ended 31 July 2013			For the year ended 31 July 2012 (audited)
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Gains/(losses) on investments	-	7,229	7,229	-	(5,919)	(5,919)
Currency (losses)/gains	-	(51)	(51)	-	89	89
Income (note 2)	2,967	-	2,967	3,234	-	3,234
Investment management fee (note 3)	(1,246)	-	(1,246)	(1,282)	-	(1,282)
Other administrative expenses	(314)	-	(314)	(302)	-	(302)
Net return on ordinary activities before taxation	1,407	7,178	8,585	1,650	(5,830)	(4,180)
Tax on ordinary activities	(165)	-	(165)	(159)	-	(159)
Net return on ordinary activities after taxation	1,242	7,178	8,420	1,491	(5,830)	(4,339)
Net return per ordinary share (note 4)	1.66p	9.62p	11.28p	1.97p	(7.71p)	(5.74p)

The total column of this statement is the profit and loss account of the Company.

All revenue and capital items in this statement derive from continuing operations. No operations were acquired or discontinued during the year.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement.

Balance Sheet (unaudited)

	At 31 July 2013		At 31 July 2012 (audited)
	£'000	£'000	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss		132,831		126,995
Current assets
Debtors	554		409
Cash and short term deposits	1,573		2,061
	2,127		2,470
Creditors
Amounts falling due within one year	(320)		(368)
Net current assets		1,807		2,102
Total net assets		134,638		129,097
Capital and reserves
Called up share capital		7,397		7,505
Share premium		3,166		3,166
Special distributable reserve		6,499		8,252
Capital redemption reserve		18,396		18,288
Capital reserve		93,569		86,391
Revenue reserve		5,611		5,495
Shareholders' funds		134,638		129,097
Net asset value per ordinary share		182.01p		172.01p
Ordinary shares in issue	73,972,002		75,052,002

Reconciliation of Movements in Shareholders' Funds (unaudited)

For the year ended 31 July 2013

	Called up share capital £'000	Share premium £'000	Special distributable reserve £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 August 2012	7,505	3,166	8,252	18,288	86,391	5,495	129,097
Net return on ordinary activities after taxation	-	-	-	-	7,178	1,242	8,420
Shares purchased for cancellation (note 7)	(108)	-	(1,753)	108	-	-	(1,753)
Dividends paid during the year (note 5)	-	-	-	-	-	(1,126)	(1,126)
Shareholders' funds at 31 July 2013	7,397	3,166	6,499	18,396	93,569	5,611	134,638

For the year ended 31 July 2012 (audited)

	Called up share capital £'000	Share premium £'000	Special distributable reserve £'000	Capital redemption reserve £'000	Capital reserve* £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 August 2011	7,693	3,166	11,020	18,100	92,221	5,150	137,350
Net return on ordinary activities after taxation	-	-	-	-	(5,830)	1,491	(4,339)
Shares purchased for cancellation (note 7)	(188)	-	(2,768)	188	-	-	(2,768)
Dividends paid during the year (note 5)	-	-	-	-	-	(1,146)	(1,146)
Shareholders' funds at 31 July 2012	7,505	3,166	8,252	18,288	86,391	5,495	129,097

*    The capital reserve balance at 31 July 2013 includes investment holding gains on fixed asset investments of £39,822,000

      (2012 -£36,971,000).

Cash Flow Statement (unaudited)

	For the year ended 31 July 2013		For the year ended 31 July 2012 (audited)
	£'000	£'000	£'000	£'000
Net cash inflow from operating activities		1,218		1,547
Financial investment
Acquisitions of investments	(28,464)		(18,009)
Disposals of investments	29,688		20,899
Realised currency (loss)/gain	(51)		89
Net cash inflow from financial investment		1,173		2,979
Equity dividend paid (note 5)		(1,126)		(1,146)
Net cash inflow before financing		1,265		3,380
Financing
Shares bought back (note 7)	(1,753)		(2,768)
Net cash outflow from financing		(1,753)		(2,768)
(Decrease)/increase in cash		(488)		612
Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash in the year		(488)		612
Movement in net funds in the year		(488)		612
Net funds at 1 August		2,061		1,449
Net funds at 31 July		1,573		2,061
Reconciliation of net return before taxation to net cash inflow from operating activities
Net return on ordinary activities before taxation		8,585		(4,180)
(Gains)/losses on investments		(7,229)		5,919
Currency losses/(gains)		51		(89)
Decrease in accrued income		39		319
(Increase)/decrease in other debtors		(17)		6
Decrease in creditors		(48)		(228)
Overseas tax suffered		(163)		(200)
Net cash inflow from operating activities		1,218		1,547

Thirty Largest Holdings at 31 July 2013 (unaudited)

Name	Country	Business	Value £'000	% of total assets ‡
Samsung Electronics	Korea	Electronics company	8,568	6.4
Taiwan Semiconductor Manufacturing	Taiwan	Semiconductor manufacturer	6,858	5.1
Kunlun Energy Company	HK/China	Energy business	4,495	3.3
BOC Hong Kong (Holdings)	HK/China	Commercial bank	3,979	3.0
China Mobile	HK/China	Wireless telecommunications provider	3,974	3.0
Tencent Holdings	HK/China	Internet business	3,947	2.9
Baidu	HK/China	Internet search provider	3,840	2.9
Hyundai Mobis	Korea	Automotive parts producer	3,629	2.7
CNOOC	HK/China	Oil and gas exploration and production	3,212	2.4
MediaTek	Taiwan	Integrated circuit design house	3,160	2.3
Tech Mahindra	India	IT services provider	3,112	2.3
Hyundai Glovis	Korea	Logistics company	2,954	2.2
China Life Insurance (Taiwan)	Tawian	Life insurance provider	2,851	2.1
Hyundai Marine and Fire Insurance	Korea	Non-life insurance provider	2,747	2.1
Reliance Industries	India	Oil and gas exploration and production	2,741	2.0
Towngas China	HK/China	Gas distributor	2,659	2.0
ASM Pacific Technology	HK/China	Semiconductor equipment manufacturer	2,592	1.9
China Petroleum & Chemical Corporation	HK/China	Integrated oil and gas producer	2,490	1.8
Samsung Fire & Marine	Korea	Non-life insurance provider	2,452	1.8
Singapore Exchange	Singapore	Stock exchange	2,166	1.6
Security Bank	Philippines	Commercial bank	2,048	1.5
CIMB Group	Malaysia	Commercial bank	1,993	1.5
Hon Hai Precision Industries	Taiwan	Electronic manufacturing services company	1,977	1.5
Airtac International Group	Taiwan	Automation equipment manufacturer	1,861	1.4
M1	Singapore	Wireless telecommunications provider	1,851	1.4
Orion Corp	Korea	Consumer conglomerate	1,844	1.4
Hiwin Technologies	Taiwan	Automation equipment manufacturer	1,804	1.3
SATS Limited	Singapore	Airport services provider	1,790	1.3
Ping An Insurance	HK/China	Life insurance provider	1,783	1.3
Ascendas Real Estate	Singapore	Real estate investment trust	1,752	1.3
			91,129	67.7

HK/China denotes Hong Kong and China

‡ Total assets less current liabilities.

Distribution of Assets (unaudited)

		At 31 July 2013 %	At 31 July 2012 %
Equities:	Hong Kong and China	33.7	33.3
	Korea	19.5	20.7
	Taiwan	16.6	15.4
	India	9.1	3.3
	Singapore	8.7	9.8
	Thailand	3.0	3.8
	Malaysia	2.5	5.2
	Vietnam	2.2	1.9
	Indonesia	1.9	2.9
	Philippines	1.5	2.1
Total equities		98.7	98.4
Net current assets		1.3	1.6
Total assets‡		100.0	100.0

‡      Total assets less current liabilities

Notes to the Condensed Financial Statements (unaudited)

There are no dilutive or potentially dilutive shares in issue.

1.	The financial information within this preliminary announcement has been extracted from the unaudited financial statements for the year to 31 July 2013 and has been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 July 2012. In accordance with The Financial Reporting Council's guidance on going concern and liquidity risk the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. The Company's assets, the majority of which are investments in quoted securities which are readily realisable, exceed its liabilities significantly. The Company has no loans. In accordance with the Company's Articles of Association, shareholders have the right to vote on the continuance of the Company, every five years, the next vote being in 2016. The Directors have no reason to believe that the continuation resolution will not be passed in 2016. After making enquiries and considering the future prospects of the Company and notwithstanding the above, the financial statements have been prepared on the going concern basis as it is the Directors' opinion that the Company will continue in operational existence for the foreseeable future. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment.
2.		2013 £'000			2012 (audited) £'000
	Income
	Income from investments	2,967			3,234
		2,967			3,234
3.	Baillie Gifford & Co are employed by the Company as Investment Managers and Secretaries to the Company. The Managers may terminate the Management Agreement on six months' notice and the Company may terminate on three months' notice. With effect from 1 April 2013, the annual management fee was reduced from a flat rate of 1% of net assets to a rate of 0.95% on the first £50m of net assets and 0.65% on the balance. Management fees are calculated on a quarterly basis.
4.			2013 £'000	2012 (audited) £'000
	Net return per ordinary share
	Revenue return on ordinary activities after taxation		1,242	1,491
	Capital return on ordinary activities after taxation		7,178	(5,830)
	Total return		8,420	(4,339)
	Weighted average number of ordinary shares in issue		74,625,072	75,638,600
	The net return per ordinary share figures are based on the above totals for revenue and capital and the weighted average number of ordinary shares in issue each period.

Notes to the Condensed Financial Statements (unaudited) (ctd)

5.	Ordinary Dividends Amounts recognised as distributions in the year:	2013	2012 (audited)	2013 £'000	2012 (audited) £'000
	Previous year's final (paid 2 November 2012)	1.50p	1.50p	1,126	1,146
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered. The revenue for the year available for distribution by way of dividend is £1,242,000 (2012 - £1,491,000).
	Ordinary Dividends Amounts paid and proposed in respect of the financial year:	2013	2012 (audited)	2013 £'000	2012 (audited) £'000
	Proposed final dividend per ordinary share (payable 4 November 2013)	1.50p	1.50p	1,110	1,126
	If approved, the proposed final dividend of 1.50p per ordinary share for the year ended 31 July 2013 will be paid on 4 November 2013 to shareholders on the register at the close of business on 11 October 2013. The ex-dividend date is 9 October 2013. The Company's Registrar offers a Dividend Reinvestment Plan and the final date for elections for this dividend is 18 October 2013.
6.	The Company has a £20 million uncommitted revolving credit facility with The Bank of New York Mellon. There were no borrowings in the year to 31 July 2013 or 31 July 2012. Included in other creditors and accruals is £256,000 (2012 - £323,000) in respect of the investment management fee. None of the above creditors are financial liabilities designated at fair value through profit or loss.
7.	The Company has authority to allot shares under Section 551 of the Companies Act 2006. The Board has authorised the use of this authority to issue new shares at a premium of not less than 5% in order to enhance the net asset value per share for existing shareholders and improve the liquidity of the Company's shares. In the years to 31 July 2013 and 31 July 2012 no shares were issued. The Company has authority to buy back its ordinary shares. The authority was last renewed at the Annual General Meeting on 31 October 2012 in respect of 11,250,295 shares (equivalent to 14.99% of its issued share capital at that date). In the year to 31 July 2013 a total of 1,080,000 (2012 - 1,880,000) ordinary shares with a nominal value of £108,000 (2012 - £188,000) were bought back at a total cost of £1,753,000 (2012 - £2,768,000). At 31 July 2013 the Company had authority to buy back a further 10,170,295 ordinary shares.
8.	The Company incurred transaction costs on purchases of £69,000 (2012 - £31,000) and on sales of £71,000 (2012 - £68,000), being £140,000 (2012 - £99,000) in total.
9.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 July 2013. The financial information for 2012 is derived from the statutory accounts for 2012. Those accounts have been delivered to the Registrar of Companies. The Auditors have reported on the 2012 accounts, their report was unqualified and did not contain a statement under Section 495, 496 and 497 of the Companies Act 2006. The statutory accounts for 2012 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

Notes to the Condensed Financial Statements (unaudited) (ctd)

10.	The Report and Accounts will be available on the Company's page on the Managers' website www.pacifichorizon.co.uk‡ on or around 26 September 2013.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Pacific Horizon Investment Trust PLC (Pacific Horizon) aims to achieve capital growth through investment in the Asia-Pacific region (excluding Japan) and in the Indian Sub-continent. The Company has total assets of £135 million.

Pacific Horizon is managed by Baillie Gifford & Co, the Edinburgh based fund management group.

Past performance is not a guide to future performance. As Pacific Horizon is a listed UK company, the value of its shares and any income from them can fall as well as rise and investors may not get back the amount invested. As Pacific Horizon invests in overseas securities, changes in the rates of exchange may also cause the value of your investment (and any income it may pay) to go down or up. Pacific Horizon invests in emerging markets where difficulties in dealing, settlement and custody could arise, resulting in a negative impact on the value of your investment. Shareholders in Pacific Horizon have the right to vote every five years, on whether to continue Pacific Horizon, or wind it up. If the shareholders decide to wind the Company up, the assets will be sold and you will receive a cash sum in relation to your shareholding. The next vote will be held at the Annual General Meeting in 2016. You can find up to date performance information about Pacific Horizon on the Pacific Horizon page of the Managers' website at www.pacifichorizon.co.uk. Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

6 September 2013

- ends -

For further information please contact:

Anzelm Cydzik,

Baillie Gifford & Co                               0131 275 2000

Roland Cross, Account Director,

Broadgate Mainland                              020 7726 6111

 

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