Interim Results

Pacific Horizon Investment Tst PLC 28 February 2008 PACIFIC HORIZON INVESTMENT TRUST PLC Results for the six months to 31 January 2008 In the six month period to 31 January 2008, Pacific Horizon's net asset value per share declined by 7.3%. The MSCI All Country Far East ex Japan Index declined by 5.2% in sterling terms for the same period. • Stockmarkets were volatile during the period and there was significant divergence between the best and worst performing. • Large holdings which had previously performed well were impacted by global concerns associated with credit and the slowing of developed world economies. • The Company remained ungeared during the period. Out of the money put options on the Hang Seng 'H' share index were bought during the period to provide protection from significant falls in the value of Hong Kong listed Chinese shares. • Over the period the Company's share price declined by 15.1% moving from a 2.9% premium to net asset value to a discount of 5.8%. • Earnings per share for the six months of 0.58p were unchanged on the same period last year. As in previous years, no interim dividend will be paid. • The Managers expect to be able to take advantage of opportunities arising from any further weakness in markets. Pacific Horizon Investment Trust PLC (Pacific Horizon) aims to achieve capital growth through investment in the stockmarkets of the Asia-Pacific region (excluding Japan) and in the stockmarkets of the Indian Sub-continent. The Company has total assets of £121 million. Baillie Gifford & Co, the Edinburgh based fund management group with around £54 billion under management and advice, as at 27 February 2008, is appointed as investment managers and secretaries to Pacific Horizon. 28 February 2008 - ends - For further information please contact: Gerald Smith, Manager Pacific Horizon Investment Trust PLC 0131 275 2000 Roland Cross, Director, Broadgate Marketing 020 7726 6111 The following is the unaudited Half-Yearly Financial Report for the six months to 31 January 2008 PACIFIC HORIZON INVESTMENT TRUST PLC Half-Yearly Financial Report 31 January 2008 Responsibility Statement We confirm that to the best of our knowledge: a) the condensed set of financial statements has been prepared in accordance with the Accounting Standards Board's statement 'Half-Yearly Financial Reports'; b) the interim management report includes a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and c) the interim management report includes a fair review of the information required by Disclosure and Transparency Rules 4.2.8R (disclosure of related party transactions and changes therein). By order of the Board Peter Mackay Chairman 27 February 2008 PACIFIC HORIZON INVESTMENT TRUST PLC Interim Management Report In the six months to 31 January 2007 the net asset value per share fell by 7.3% to 154.77p. Over the same period the MSCI All Country Far East ex Japan Index fell by 5.2% in sterling terms. There was significant divergence in the performance of regional markets over the period in sterling. India, Indonesia, Malaysia and the Philippines were the best performing markets with returns of 19.0%, 14.1%, 10.7% and 6.6% respectively. This contrasts with falls of 16.3% and 15.6% in Korea and Taiwan which together make up a large part of the comparative index. Although less exposed to these markets, fund performance was impacted by stock specific issues, most notably in Korea where previous star performers were hurt by global concerns. Chinese and Hong Kong shares exhibited extreme volatility during the period. The Hong Kong market rose by 3.8% whilst the Chinese focused H share index fell by 4.0%. Singapore fell by 6.3%. The Hong Kong economy continued to strengthen throughout the first half of the year, as lowered interest rates at a time of improving economic strength and a pick up in inflation led to a resurgence in retail and property spending and a pick up in growth at the banks. The Company benefited from the strong performance of real estate agent Midland Holdings, property conglomerate Cheung Kong and Hang Seng Bank. The listed stock exchanges also continued their strength of the previous year. Chinese shares listed in Hong Kong had a very volatile six months. The announcement that Chinese retail investors would be able to invest directly in Hong Kong led to a strong bounce in August and the beginnings of a bubble in terms of both sentiment and valuations. This was subsequently deflated on the back of rising credit concerns, uncertainty over the extent and implementation of the Chinese policy and general valuations of Chinese shares. In spite of our having begun to raise cash through the sale of highly valued Chinese names and having bought downside protection in the form of put options on the H share index, performance was weakened by stock specific issues. Downside protection remains in place as at the end of the interim period. Taiwanese technology stocks were generally out of favour and continued to get cheaper, whilst domestic oriented stocks showed some strength on hopes for closer ties with China after the upcoming elections. However, the links to the global cycle through large export markets in both Taiwan and Korea were responsible for the poor performance of some stocks in these markets. This included holdings in technology stocks Hon Hai and TSMC, shipbuilders such as Samsung Heavy and Hyundai Mipo and conglomerate Samsung Corp. This was in part offset by the stronger performance of stocks in the ASEAN region, including palm oil plantations, Bursa Malaysia and Bakrie and Brothers. Outlook The outlook for the markets for the Asia-Pacific region in the short term remains uncertain. Though the long term drivers of economies and stockmarkets remain in place, there are continued risks of spill over effects from credit concerns and weakening economies in the developed world. A more widespread reduction in liquidity resulting from general de-leveraging is also likely to provide a headwind for markets in the coming PACIFIC HORIZON INVESTMENT TRUST PLC Interim Management Report (Ctd) period. The prevention of exchange rate appreciation in many Asian countries is further adding to the volatility. Imbalances between interest rates and inflation are likely to continue to put pressure on policy, most notably in China where the potential for currency appreciation appears greatest. In spite of these short term concerns, there remain areas of reasonable valuation in some of the more out of favour markets and sectors. The Company remains ungeared and expects to be able to take advantage of opportunities that could be thrown up by further weakness in markets. Risks and Uncertainties The Company's main risk is investment risk. The risk of permanent loss of capital can be mitigated by prudent diversification but it cannot be eliminated altogether by this means. The Company's focus on the markets of one region of the world imposes limits on the diversification of economic and political risk. From time-to-time the Company may purchase options on market indices to limit losses in the event of a large fall in markets but there is no guarantee that this will offset losses suffered on stocks held in the portfolio. Other risk factors that can be identified are detailed in note 10. By Order of the Board Baillie Gifford & Co 27 February 2008 PACIFIC HORIZON INVESTMENT TRUST PLC INCOME STATEMENT (unaudited) for the six months ended for the six months ended for the year ended 31 January 2008 31 January 2007 31 July 2007 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Realised gains on - 13,725 13,725 - 7,853 7,853 - 12,679 12,679 investments Unrealised (losses)/ gains on investments - (22,765) (22,765) - 5,687 5,687 - 33,917 33,917 Currency (losses)/gains - (3) (3) - 68 68 - 13 13 Income from investments and interest receivable 1,450 - 1,450 1,302 - 1,302 3,031 3,031 Investment management (679) - (679) (459) - (459) (1,052) - (1,052) fee Other administrative (146) - (146) (121) - (121) (270) - (270) expenses Net return before finance costs and taxation 625 (9,043) (8,418) 722 13,608 14,330 1,709 46,609 48,318 Finance costs of - - - (103) - (103) (103) - (103) borrowings Net return on ordinary activities before taxation 625 (9,043) (8,418) 619 13,608 14,227 1,606 46,609 48,215 Tax on ordinary (176) - (176) (172) - (172) (482) - (482) activities Net return on ordinary activities after taxation 449 (9,043) (8,594) 447 13,608 14,055 1,124 46,609 47,733 Net return per ordinary share (note 4) 0.58p (11.60p) (11.02p) 0.58p 17.68p 18.26p 1.45p 60.17p 61.62p Note: Dividend paid per ordinary share (note 5) - - 1.10p The total column of this statement is the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. PACIFIC HORIZON INVESTMENT TRUST PLC BALANCE SHEET (unaudited) At 31 January At 31 January At 31 July 2008 2007 2007 £'000 £'000 £'000 FIXED ASSETS Investments held at fair value through profit or loss 117,282 94,863 128,845 CURRENT ASSETS Debtors 614 834 288 Cash and short term deposits 3,597 1,534 1,718 4,211 2,368 2,006 CREDITORS Amounts falling due within one year (note 6) (829) (806) (721) NET CURRENT ASSETS 3,382 1,562 1,285 TOTAL ASSETS LESS CURRENT LIABILITIES 120,664 96,425 130,130 PROVISIONS FOR LIABILITIES AND CHARGES Deferred taxation (38) (26) (53) 120,626 96,399 130,077 CAPITAL AND RESERVES Called-up share capital 7,794 7,794 7,794 Share premium 2,615 2,615 2,615 Special distributable reserve 13,233 13,233 13,233 Capital redemption reserve 17,964 17,964 17,964 Capital reserves 76,223 52,265 85,266 Revenue reserve 2,797 2,528 3,205 EQUITY SHAREHOLDERS' FUNDS 120,626 96,399 130,077 NET ASSET VALUE PER ORDINARY SHARE 154.77p 123.69p 166.90p ORDINARY SHARES IN ISSUE (note 7) 77,937,002 77,937,002 77,937,002 PACIFIC HORIZON INVESTMENT TRUST PLC RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (unaudited) For the six months ended 31 January 2008 Called-up Share Special Capital Revenue Equity share premium distributable reserves reserve shareholders' capital reserve Capital funds £'000 redemption £'000 £'000 £'000 £'000 reserve £'000 £'000 Shareholders' funds at 1 August 2007 7,794 2,615 13,233 17,964 85,266 3,205 130,077 Net return on ordinary activities after taxation - - - - (9,043) 449 (8,594) Shares issued in the period (note 7) - - - - - - - Dividends paid during the period (note 5) - - - - - (857) (857) Shareholders' funds at 31 January 2008 7,794 2,615 13,233 17,964 76,223 2,797 120,626 For the six months ended 31 January 2007 Called-up Share Special Capital Revenue Equity share premium distributable reserves reserve shareholders' capital reserve Capital funds £'000 redemption £'000 £'000 £'000 £'000 reserve £'000 £'000 Shareholders' funds at 1 August 2006 7,649 965 13,233 17,964 38,657 2,922 81,390 Net return on ordinary activities after taxation - - - - 13,608 447 14,055 Shares issued in the period (note 7) 145 1,650 - - - - 1,795 Dividends paid during the period (note 5) - - - - - (841) (841) Shareholders' funds at 31 January 2007 7,794 2,615 13,233 17,964 52,265 2,528 96,399 For the year ended 31 July 2007 Called-up Share Special Capital Revenue Equity share premium distributable reserves reserve shareholders' capital reserve Capital funds £'000 redemption £'000 £'000 £'000 £'000 reserve £'000 £'000 Shareholders' funds at 1 August 2006 7,649 965 13,233 17,964 38,657 2,922 81,390 Net return on ordinary activities after taxation - - - - 46,609 1,124 47,733 Shares issued in the period (note 7) 145 1,650 - - - - 1,795 Dividends paid during the period (note 5) - - - - - (841) (841) Shareholders' funds at 31 July 2007 7,794 2,615 13,233 17,964 85,266 3,205 130,077 PACIFIC HORIZON INVESTMENT TRUST PLC CONDENSED CASH FLOW STATEMENT (unaudited) Six months to Six months to Year to 31 January 2008 31 January 31 July 2007 2007 £'000 £'000 £'000 Net cash inflow from operating activities 621 653 1,486 Net cash outflow from servicing of finance - (192) (192) Total tax paid - - (357) Net cash inflow from financial investment 2,115 4,567 4,275 Equity dividend paid (note 5) (857) (841) (841) NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 1,879 4,187 (4,371) Proceeds from issue of shares (note 7) - 1,795 1,795 Net cash outflow from bank loans - (7,408) (7,408) INCREASE/(DECREASE) IN CASH 1,879 (1,426) (1,242) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT) Increase/(decrease) in cash in the period 1,879 (1,426) (1,242) Net cash outflow from bank loans - 7,408 7,408 Exchange movement on bank loans - 173 173 MOVEMENT IN NET FUNDS IN THE PERIOD 1,879 6,155 6,339 Net funds/(debt) at start of the period 1,718 (4,621) (4,621) NET FUNDS AT END OF THE PERIOD 3,597 1,534 1,718 RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES Net return on ordinary activities before finance costs and taxation (8,418) 14,330 48,318 Losses/(gains) on investments - securities 9,040 (13,540) (46,596) Currency losses/(gains) 3 (68) (13) Changes in debtors and creditors 45 108 96 Realised currency loss (3) (105) (160) Overseas tax suffered (46) (72) (159) NET CASH INFLOW FROM OPERATING ACTIVITIES 621 653 1,486 PACIFIC HORIZON INVESTMENT TRUST PLC THIRTY LARGEST EQUITY* HOLDINGS at 31 January 2008 (unaudited) Market % of value total £'000 assets+ Name Country Business Morgan Stanley HSCEI Put Option Hong Kong Financial instrument 5,567 4.6 Bakrie and Brothers Indonesia Holding company 4,115 3.4 Pacific Basin Shipping Hong Kong Shipping company 4,019 3.3 China Infrastructure Machinery Holdings Hong Kong Infrastructure machinery manufacturer 3,872 3.2 CNPC Hong Kong Hong Kong Oil and gas exploration and production 3,332 2.8 Samsung Corporation Korea Construction and trading company 2,973 2.5 Taiwan Semiconductor Manufacturing Taiwan Semiconductor equipment manufacturer 2,939 2.4 SFA Engineering Korea Engineering company 2,888 2.4 Singapore Exchange Singapore Stock exchange 2,866 2.4 Li & Fung Hong Kong Supply chain management 2,860 2.4 Hang Seng Bank Hong Kong Banking services 2,508 2.1 Hon Hai Precision Industries Taiwan Electronic manufacturing services company 2,266 1.9 Hong Kong Exchanges and Clearing Hong Kong Stock exchange 2,249 1.9 Samsung Heavy Industries Korea Shipbuilder 2,235 1.9 China Shenhua Energy China Coal producer 2,197 1.8 Thoresen Thai Agencies Thailand Shipping company 2,193 1.8 Hang Lung Properties Hong Kong Real estate developer 2,136 1.8 Sime Darby Berhad Malaysia Holding company 2,120 1.8 Reliance Industries India Petrochemical manufacturer 2,091 1.7 Daewoo Shipbuilding and Marine Korea Shipbuilder 1,893 1.6 ASM Pacific Technology Hong Kong Semiconductor equipment manufacturer 1,861 1.5 PT Telekomunikasi Indonesia Diversified telecommunications provider 1,731 1.4 Ayala Corp Philippines Holding company 1,730 1.4 IOI Malaysia Palm oil producer and refiner 1,730 1.4 Vietnam Growth Fund Vietnam Vietnam investment fund 1,719 1.4 Parkson Holdings Malaysia Department store owner and operator 1,655 1.4 Midland Holdings Hong Kong Real estate management 1,606 1.3 Gome Electrical Appliances Hong Kong Consumer electronic retailer 1,564 1.3 Shun Tak Holdings Hong Kong Diversified Macau based conglomerate 1,543 1.3 Tian An China Investment Hong Kong Property developer and manager 1,538 1.3 73,996 61.4 All stocks are listed overseas. * Includes options on equity indices. + Total assets less current liabilities and deferred tax. PACIFIC HORIZON INVESTMENT TRUST PLC DISTRIBUTION OF ASSETS (unaudited) At 31 January 2008 At 31 January At 31 July % 2007 2007 % % Equities*: Hong Kong and China 35.4 32.6 34.8 Korea 15.2 14.0 19.1 Taiwan 11.2 14.2 11.6 Singapore 11.0 12.5 12.2 Indonesia 6.1 5.1 4.6 Malaysia 5.7 4.9 5.4 India 5.5 1.1 2.9 Thailand 3.1 8.7 4.2 Philippines 2.1 2.4 2.4 Vietnam 1.9 2.9 1.9 Total equities 97.2 98.4 99.1 Net liquid assets 2.8 1.6 0.9 Total assets + 100.0 100.0 100.0 + Total assets less current liabilities and deferred tax. * Includes options on equity indices. PACIFIC HORIZON INVESTMENT TRUST PLC NOTES TO THE CONDENSED FINANCIAL STATEMENTS (unaudited) 1. The condensed set of financial statements have been prepared on the basis of the same accounting policies as set out in the Company's Annual Financial Statements at 31 July 2007 and in accordance with the ASB's Statement 'Half-Yearly Financial Reports' and have not been audited or reviewed by the Auditors pursuant to the Auditing Practices Board Guidance on 'Review of Interim Financial Information'. 2. The financial information contained within this half-yearly financial report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 July 2007 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditors' Report on those accounts was not qualified and did not contain statements under the section 237(2) or (3) of the Companies Act 1985. 3. The management agreement is terminable on not less than 12 months' notice, or on shorter notice in certain circumstances. The fee in respect of each quarter is 0.25% of the total assets less current liabilities of the Company on the last day of that quarter. Six months to 31 Six months to Year to January 2008 31 January 31 July £'000 2007 2007 £'000 £'000 4. Net return per ordinary share Revenue return on ordinary activities after 449 447 1,124 taxation Capital return on ordinary activities after (9,043) 13,608 46,609 taxation Total return (8,594) 14,055 47,733 Weighted average number of ordinary shares in issue 77,937,002 76,994,339 77,461,796 Net return per ordinary share is based on the above totals of revenue and capital and the weighted average number of ordinary shares in issue during each period. There are no dilutive or potentially dilutive shares in issue. 5. Dividends Amounts recognised as distributions in the period: Previous year's final dividend of 1.10p (2006 - 1.10p) paid 29 October 2007 857 841 841 No interim dividend will be declared. 6. The Company had no borrowings at 31 January 2008, 31 January 2007 or 31 July 2007. 7. The Company has authority to allot shares under section 80 of the Companies Act 1985. In the six months to 31 January 2008 no shares were issued. In the six months to 31 January 2007 and the year to 31 July 2007 a total of 1,450,000 ordinary shares of 10p each fully paid were issued for cash amounting to £1,795,000. The Company has authority to buy back its ordinary shares. The authority was last renewed at the Annual General Meeting in October 2007. In the six months to 31 January 2008 no ordinary shares were bought back. As a result, at 31 January 2008, the Company's authority to buy back shares remains unchanged at 11,682,756 ordinary shares. PACIFIC HORIZON INVESTMENT TRUST PLC NOTES TO THE CONDENSED FINANCIAL STATEMENTS (unaudited) (Ctd) 8. During the period, transaction costs on purchases amounted to £70,000 (31 January 2007 - £52,000; 31 July 2007 - £104,000) and transaction costs on sales amounted to £88,000 (31 January 2007 - £58,000; 31 July 2007 - £116,000). 9. None of the views expressed in this document should be construed as advice to buy or sell a particular investment. 10. Risks and uncertainties The principal risks and uncertainties facing the Company are detailed in the Interim Management Report. Other risks facing the Company include the following; currency risk (investments are subject to movements in exchange rates), gearing risk (the use of borrowing can magnify the impact of falling markets), the risk that the discount can widen and regulatory risk (that the loss of investment trust status or a breach of the UKLA Listing Rules could have adverse financial consequences and cause reputational damage). These risks are monitored and assessed by the Managers and reported on regularly to the Board and the Audit Committee. 11. The Half-Yearly Financial Report is available at www.pacifichorizon.co.uk and will be posted to shareholders on or around 8 March 2008. This information is provided by RNS The company news service from the London Stock Exchange

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