Half Yearly Report

RNS Number : 4919X

Witan Investment Trust PLC

17 August 2009

 



WITAN INVESTMENT TRUST PLC

17 August 2009

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

HIGHLIGHTS

• During the six month period under review the Company's Net Asset Value total return was -0.59% compared with a benchmark return of -1.93% for the same period - a relative outperformance of 1.34%.

• Ten out of fourteen of the Company's manager mandates outperformed their respective benchmarks during the period.

• An interim dividend of 4.3p (2008: 4.3p) per ordinary share will be paid to shareholders on 11 September 2009.

• Gearing increased from 0% to 6% in February/March at the market low point.

• Increased allocations to Artemis & Marathon. New allocation to PIMCO Global Investment Grade Credit fund.

Page 2 of 16

WITAN INVESTMENT TRUST PLC 

Financial Report for the Half Year ended 30 June 2009

FINANCIAL HIGHLIGHTS

Corporate Key Performance Indicators
	(Unaudited) 30 June  2009	Change since 31 December 2008	(Unaudited) 30 June  2008	(Audited) 31 December 2008
Share price	344.5p	-1.9%	418.25p	351.0p
Net asset value per ordinary share     (debt at par value)	399.9p	-2.5%	478.1p	410.1p
Net asset value per ordinary share    (debt at fair value)	393.0p	-1.8%	476.4p	400.3p
Dividends per ordinary share	4.3p		4.3p	10.2p
Discount (debt at par value)	13.9%		12.5%	14.4%
Discount (debt at fair value)	12.3%		12.2%	12.3%
Share buy-backs (A)	0.5%		3.2%	4.0%
Total expense ratio including    performance fees(B)	0.62%		0.30%	0.71%
Total expense ratio excluding    performance fees (B)	0.37%		0.26%	0.58%
Number of private investors (C)	40,034		39,282	40,356

(A)	The percentage of the ordinary share capital in issue at the previous year end that was bought back during the period.
(B)	The total of the management fees and other administrative expenses (excluding the expenses of the subsidiary company) as a percentage of the average of shareholders' funds at the beginning and end of the period.
(C)	The sum of the number of accounts on the Company's register of members and the number of accounts in Witan Wealthbuilder and Jump.

Performance
Total Returns to 30 June 2009	6 months % return	1 year % return	3 years % return	5 years % return
Total shareholder return (D)	0.1	-15.1	-11.0	28.7
Net asset value total return (E)	-0.6	-14.0	-10.5	20.7
Benchmark	-1.9	-15.8	-11.8	20.2
FTSE All-Share Index	0.8	-20.5	-18.2	16.3
FTSE World (ex UK) Index	-5.4	-12.8	-7.4	19.3

(D)	The movement in the ordinary share price adjusted to include the notional reinvestment of dividends.
(E)	The movement in the net asset value per share adjusted to include the notional reinvestment of dividends.
(F)	Since 1 October 2007 the benchmark has been a composite of four indices: the FTSE All-Share Index 40%, the FTSE All-World North America Index 20%, the FTSE All-World Europe (ex UK) Index 20% and the FTSE All-World Asia Pacific Index 20%.  From 1 September 2004 to 30 September 2007 the benchmark comprised the FTSE All-Share Index 50% and the FTSE World (ex UK) Index 50%. Prior to 1 September 2004 the benchmark comprised the FTSE All-Share Index 60% and the FTSE World (ex UK) Index 40%.
(G)	Source: Datastream (except the net asset value total return over 6 months and 1 year).

Page 3 of 16

WITAN INVESTMENT TRUST PLC 

Financial Report for the Half Year ended 30 June 2009

OTHER FINANCIAL HIGHLIGHTS
	(Unaudited) 30 June 2009	Change since 31 December 2008	(Unaudited) 30 June 2008	(Audited) 31 December 2008
Net assets	£853 million	-3.0%	£1,034 million	£879 million
Number of ordinary shares in issue	213,234,054	-0.5%	216,282,439	214,398,654
Revenue return per ordinary share	7.10p		7.17p	11.60p
Gearing*	5.2%		-1.2%	0.1%

* The total market value of the investments less shareholders' funds as a percentage of shareholders' funds.

PORTFOLIO INFORMATION

Equity portfolio by geographical classification
United Kingdom	35.7%
North America	21.9%
Continental Europe	19.5%
Asia Pacific	21.1%
Other	1.8%
	----------
	100.0%
	======

Page 4 of 16

WITAN INVESTMENT TRUST PLC 

Financial Report for the Half Year ended 30 June 2009

INTERIM MANAGEMENT REPORT

Market Background

What appears a relatively small reduction in net asset value masks a volatile first half of 2009 during which investors first experienced substantial falls and then from late March a strong rally which petered out in June. Certain Governments and Central Banks have executed fiscal and monetary stimuli on a grand scale including new approaches such as quantitative easing - effectively printing money.  These actions have in particular been adopted in the US and UK to help to mitigate the severe effects of the credit crisis.  In equity markets a key feature has been the rebuilding of corporate balance sheets via rights issues.  This fund raising has generally been well accepted, with investors believing that a cash injection should improve a company's chances of survival and also position them advantageously when compared with competitors.  At the same time dividends have come under pressure as companies have sought to conserve cash - in some cases reducing and even passing scheduled distributions.

Investment Income

At Witan our Income Statement has not been immune from these factors and the level of dividend income in the first six months is down by 1.3% on last year - an improvement on our initial forecasts.  We have also benefited from the managers being significantly underweight the banking sector.  Overall total investment income, including interest received on cash deposits, has reduced by 19.3% largely due to the rapid and substantial fall in interest rates - although cash balances have also reduced as we have allocated more monies to the portfolio as mentioned below.  The average 3 month London Interbank Offered Rate (LIBOR) for the first six months of 2008 was 5.8% while for the first six months of 2009 it fell to 1.7%.

Portfolio Changes

During 2008 our significant cash balances nearly eliminated the gearing effect of our long term debt with effective gearing of only 0.1% at 31 December.  In response to the extreme stock market weakness in the early part of the year, we allocated new monies to two of our UK equity managers and also took a small tactical position in investment grade corporate bonds, as opposed to government bonds, via a fund managed by PIMCO.  The rationale was that with liquidity conditions improving significantly there was the prospect of enjoying a capital gain while collecting a relatively high and secure level of income. PIMCO is a well established and highly respected specialist bond manager based in the USA, with offices in London, and has been known to us for some years.  In fact credit markets have made a strong recovery and our investment returned 7.2% during the period under review.  Having been underweight the UK equity market during 2008 we added monies via Artemis and Marathon when the FTSE 100 Index dropped below the 4,000 level in late February. Both managers had demonstrated considerable outperformance since their appointment in 2008 and this has continued, with Artemis in particular nearly 10% ahead of the index in the first half of 2009. By the end of the first six months cash balances had reduced and effective gearing was 5.2%.

Page 5 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

INTERIM MANAGEMENT REPORT, continued

Investment Performance

The performance of our managers on a relative basis has been very good with 10 out of 14 mandates, representing some 71% of assets, beating their respective benchmarks. The most pleasing return has come from Southeastern which beat its benchmark by 5.8%. We have previously commented that Southeastern's style was out of favour and that value stocks were depressed. Its performance has rebounded strongly since late 2008. Wellington and Orbis likewise have posted strong returns. It is important to remember that multi-manager portfolios are a blend of styles and it is understandable to us that the managers which have underperformed in the period under review, in particular Comgest and MFS, have more defensive styles and in fact were key contributors to Witan's outperformance in 2008. However, we are not complacent and continually review the composition of the portfolio including the role of each manager within it.  In local currency terms our overweight stance towards international markets and underweight position in the UK was appropriate as the UK was the worst performing market in our benchmark during the period under review. However, the strength of Sterling reduced the returns from overseas markets to a considerable degree whereas in 2008 Sterling's weakness was a strong positive factor. Stock selection was positive, with particularly strong contributions from the regional managers in the UK, Europe, Japan and Australia. Overall, the net effect was a return ahead of the benchmark.

Expenses

As a result of the strong performance from managers referred to above there has been a significant increase in performance fees, with management and performance fees increasing from £1.2 million in the first half of last year to £3.2 million this year.  Other expenses/operating costs are very slightly down compared with last year.  Our Total Expense Ratio (TER) for the six months was 0.62%, up from 0.30% for the first half of 2008.  In addition to the significant increase in performance fees, the average shareholders' funds, on which the calculation is based, have reduced by 23.2% since the first half of last year.  Without performance fees the TERs are 0.37% for 2009 and 0.26% for 2008.

VAT

Following the VAT amounts recognized as receivable in the 2007 and 2008 accounts, a further amount of £1.2 million has recently been received from HM Revenue & Customs in respect of a claim relating to investment management fees for the period 1990 to 1996 and is included in these half year accounts as a refund of expenses. Interest receivable on this amount, estimated to be £0.8 million, has also been included, as other income. Further details are provided in Note 4 on page 14. These amounts have been excluded from the above analysis of expenses.

Finance Costs

In March we took up a special opportunity to buy back £30 million of our long term debt at a relatively low premium cost of £2 million. Although this involved a one-off charge to net assets, there was an immediate reduction in our annual interest bill of £1.9 million which is evidenced by the decrease in the half year finance charge from £4.90 million to £4.35 million.

Taxation

The tax charge element in the Income Statement has reduced compared with last year, largely as a result of recent changes in tax legislation relating to overseas dividends.

Page 6 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

INTERIM MANAGEMENT REPORT, continued

Dividend

For various reasons referred to above, the revenue earnings per share figure of 7.10p is only slightly less than last year. Your Board has decided that in the current environment the first interim dividend will be paid at the same rate as last year at 4.3p (2008: 4.3p) per ordinary share on Friday 11 September 2009 to shareholders registered on Friday 28 August 2009.  The shares will be quoted ex-dividend on 26 August 2009.  The Board is mindful that the dividend policy and the resulting level of distribution are two of the most important issues for shareholders.

Share Buy-backs

The level of share buy-backs has continued to reduce significantly compared with past years. Witan remains committed to its policy - although in the current market conditions it has been careful to exercise its discretion judiciously.

Jump Child Trust Fund

Growth within Witan's new savings plan, the Jump Child Trust Fund, has accelerated.  It is encouraging to note that in our 101st year we have hundreds of new young investors. Demand for Witan's other savings plans continues to be strong, despite the volatile market conditions.

Outlook

There may be some consolidation and even regression in stock markets over the summer months as markets have run up strongly over the second quarter and again more recently in July. However, given substantial cash balances on the sidelines, the historically low level of interest rates and comparatively few attractive alternatives for investors, we believe the greater risk lies in not being invested. Therefore, we will look to increase our effective gearing on any substantial market weakness.

Page 7 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

INTERIM MANAGEMENT REPORT, continued

Related Party Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company during the period.  Details of related party transactions are contained in the Company's Annual Report for the year ended 31 December 2008.

Principal Risks and Uncertainties

The principal risks and uncertainties associated with the Company's business can be divided into various areas:

• a fall in equity prices

• the application of investment strategy: country, currency, industrial sector, stock selection, choice of investment manager

• appropriateness of corporate objective and strategy

• operational and regulatory risks.

Information on these risks is given in the Business Review and in the Notes to the Accounts in the Company's Annual Report for the year ended 31 December 2008.  

In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review.

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34;

(b) the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the financial year); and

(c) the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

For and on behalf of the Board

Harry Henderson

Chairman

14 August 2009 

Page 8 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Assets under Management and Investment Performance as at 30 June 2009

Investment Manager	Value of Assets under Management £m at 30.06.09	% of Witan's Assets under Management at 30.06.09 (Note 2)	Performance in the period 01.01.09 to 30.06.09 (%)	Benchmark Performance 01.01.09 to 30.06.09 (%)	Performance in the period since inception to 30.06.09 (%) (annualised) (Note 3)	Benchmark Performance since inception to 30.06.09 (%) (annualised) (Note 3)
Southeastern Asset Management (Global)	131.2	14.3	1.7	-3.9	1.8(B)	4.2(B)
MFS International (Global)	93.2	10.2	-6.9	-3.9	6.2(B)	4.2(B)
Thomas White International (Global)	84.4	9.2	-5.9	-3.9	-12.5(D)	-13.1(D)
Henderson Global Investors (UK mainstream)	132.5	14.4	1.3	0.2	3.0(B)	2.7(B)
Henderson Global Investors (UK smaller)	35.6	3.9	17.0	27.1	4.4(A)	5.1(A)
Artemis Investment Management (UK)	73.9	8.1	10.0	0.8	-10.1(F)	-23.1(F)
Marathon Asset Management (UK)	66.1	7.2	2.5	0.8	-19.8(F)	-23.1(F)
Wellington Management Company (Europe)	71.4	7.8	-4.0	-6.8	4.0(B)	6.4(B)
Varenne Capital  (Europe including the UK)	23.4	2.5	-0.7	-5.2	-23.5(E)	-24.2(E)
Henderson Global Investors (USA)	53.9	5.9	-8.0	-8.2	1.6(A)	1.4(A)
Brandes Investment Partners (Japan)	73.1	8.0	-8.5	-10.2	5.6(B)	2.9(B)
Comgest (Asia Pacific excluding Japan)	54.5	5.9	9.8	19.8	-1.5(C)	-4.3(C)
Orbis Investment Management (Australasia)	12.9	1.4	19.1	10.8	-9.8(C)	-10.0(C)
PIMCO Europe (Fixed Interest)	10.7	1.2	not applicable		7.2(G)	7.1(G)

Notes:

1	The table shows investment performance for the periods from 1 January 2009 to 30 June 2009 and from inception to 30 June 2009.
2	The figures exclude the cash balances held centrally by Witan and the unquoted investments.
3	The investment managers were appointed with effect from the following dates:
	(A) from 31.08.04
	(B) from 30.09.04
	(C) from 31.07.07
	(D) from 28.09.07
	(E) from 30.04.08
	(F) from 06.05.08
	(G) from 02.04.09.
4	Source: The WM Company.

Page 9 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Consolidated Income Statement

	(Unaudited)   Half year ended   30 June 2009			(Unaudited)   Half year ended   30 June 2008			(Audited) Year ended 31 December 2008
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Investment income	17,891	-	17,891	18,128	-	18,128	29,577	-	29,577
Other income	1,598	-	1,598	4,921	-	4,921	8,185	-	8,185
Losses on investments held at fair  value through profit or loss	-	(19,286)	(19,286)	-	(153,608)	(153,608)	-	(297,614)	(297,614)
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Total income/(loss)	19,489	(19,286)	203	23,049	(153,608)	(130,559)	37,762	(297,614)	(259,852)
Expenses
Management and performance fees	(255)	(2,954)	(3,209)	(207)	(989)	(1,196)	(490)	(2,831)	(3,321)
Write-back of prior years' VAT (Note 4)	1,249	-	1,249	-	-	-	141	424	565
Other expenses	(2,664)	-	(2,664)	(2,668)	-	(2,668)	(5,045)	-	(5,045)
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Profit/(loss) before finance costs and taxation	17,819	(22,240)	(4,421)	20,174	(154,597)	(134,423)	32,368	(300,021)	(267,653)
Finance costs	(1,120)	(3,233)	(4,353)	(1,256)	(3,644)	(4,900)	(2,527)	(7,334)	(9,861)
	---------	---------	---------	---------	---------	---------	---------	---------	---------
Profit/(loss) before taxation	16,699	(25,473)	(8,774)	18,918	(158,241)	(139,323)	29,841	(307,355)	(277,514)
Taxation	(1,539)	364	(1,175)	(3,140)	1,960	(1,180)	(4,580)	2,878	(1,702)
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Profit/(loss) attributable to equity holders of the parent company	15,160	(25,109)	(9,949)	15,778	(156,281)	(140,503)	25,261	(304,477)	(279,216)
	======	======	======	======	======	======	======	======	======
Earnings/(loss) per ordinary share (Note 2)	7.10p	(11.76)p	(4.66)p	7.17p	(71.01)p	(63.84)p	11.60p	(139.86)p	(128.26)p
	======	======	======	======	======	======	======	======	======

The total column of this statement represent the Group's Income Statement, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of Witan Investment Trust plc, the parent company. There are no minority interests.

  Page 10 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Consolidated Statement of Changes in Equity

			(Unaudited) Half year ended 30 June 2009
		Ordinary share  capital £'000	Share premium £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2008		53,600	16,237	40,226	716,756	52,428	879,247
(Loss)/profit for the period		-	-	-	(25,109)	15,160	(9,949)
Ordinary dividend paid		-	-	-	-	(12,629)	(12,629)
Buy-backs of ordinary shares	(Note 5)	(291)	-	291	(3,970)	-	(3,970)
		----------	-----------	----------	-------------	-----------	------------
At 30 June 2009		53,309	16,237	40,517	687,677	54,959	852,699
		======	======	======	========	======	=======

			(Unaudited) Half year ended 30 June 2008
		Ordinary  share  capital £'000	Share premium £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2007		55,857	16,237	37,969	1,059,939	49,304	1,219,306
(Loss)/profit for the period		-	-	-	(156,281)	15,778	(140,503)
Ordinary dividend paid		-	-	-	-	(12,849)	(12,849)
Buy-backs of ordinary shares	(Note 5)	(1,786)	-	1,786	(31,917)	-	(31,917)
		----------	-----------	----------	-------------	-----------	------------
At 30 June 2008		54,071	16,237	39,755	871,741	52,233	1,034,037
		======	======	======	========	======	=======

			(Audited) Year ended 31 December 2008
		Ordinary  share  capital £'000	Share premium £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2007		55,857	16,237	37,969	1,059,939	49,304	1,219,306
(Loss)/profit for the year		-	-	-	(304,477)	25,261	(279,216)
Ordinary dividends paid		-	-	-	-	(22,137)	(22,137)
Buy-backs of ordinary shares	(Note 5)	(2,257)	-	2,257	(38,706)	-	(38,706)
		------------	------------	------------	-------------	---------	------------
At 31 December 2008		53,600	16,237	40,226	716,756	52,428	879,247
		=======	======	=======	========	=====	=======

Page 11 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Consolidated Balance Sheet

	(Unaudited) 30 June  2009 £'000	(Unaudited) 30 June 2008 £'000	(Audited) 31 December 2008 £'000
Non current assets
Investments held at fair value through profit or loss	896,927	1,021,317	880,013
	--------------	-------------	-------------
Current assets
Other receivables	12,830	16,238	19,830
Cash and cash equivalents	62,995	152,568	124,383
	--------------	-------------	-------------
	75,825	168,806	144,213
	--------------	-------------	-------------
Total assets	972,752	1,190,123	1,024,226
	--------------	-------------	-------------
Current liabilities
Other payables	(9,927)	(16,039)	(4,892)
	--------------	-------------	-------------
Total assets less current liabilities	962,825	1,174,084	1,019,334
	--------------	-------------	--------------
Non current liabilities
8½ per cent Debenture Stock 2016	(44,589)	(45,779)	(45,779)
6.125 per cent Secured Bonds due 2025	(62,982)	(91,713)	(91,753)
3.4 per cent cumulative preference shares of £1	(2,055)	(2,055)	(2,055)
2.7 per cent cumulative preference shares of £1	(500)	(500)	(500)
	--------------	-------------	--------------
	(110,126)	(140,047)	(140,087)
	--------------	-------------	--------------
Net assets	852,699	1,034,037	879,247
	========	========	========
Equity attributable to equity holders
Ordinary share capital	53,309	54,071	53,600
Share premium	16,237	16,237	16,237
Capital redemption reserve	40,517	39,755	40,226
Retained earnings:
Other capital reserves	687,677	871,741	716,756
Revenue reserve	54,959	52,233	52,428
	-------------	-------------	------------
Total equity	852,699	1,034,037	879,247
	========	========	========
Net asset value per ordinary share (Note 6)	399.9p	478.1p	410.1p
	========	========	========

  Page 12 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Consolidated Cash Flow Statement

	(Unaudited) Half  Year ended  30 June  2009 £'000	(Unaudited) Half  Year ended  30 June  2008 £'000	(Audited) Year ended   31 December  2008 £'000
Operating activities
Loss before taxation	(8,774)	(139,323)	(277,514)
Interest paid	4,327	4,836	9,664
Losses on investments held at fair value through profit or loss	19,286	153,608	297,614
Net (purchases)/sales of investments held at fair value through profit or loss	(32,054)	102,961	89,327
Decrease/(increase) in other receivables	6,631	(351)	150
Increase/(decrease) in other payables	5,327	(280)	1,037
Cash outflow from futures contracts	(89)	(2,544)	(5,934)
Scrip dividends included in investment income	-	(300)	(537)
	-----------	-----------	-----------
Net cash (outflow)/inflow from operating activities before interest and taxation	(5,346)	118,607	113,807
Interest paid	(4,327)	(4,836)	(9,664)
Amortisation of debt issue costs	39	40	80
Tax on overseas income	(1,124)	(1,435)	(1,633)
	----------	----------	------------
Net cash (outflow)/inflow from operating activities	(10,758)	112,376	102,590
	----------	----------	------------
Financing activities
Equity dividends paid	(12,629)	(12,849)	(22,137)
Buy-backs of ordinary shares	(4,376)	(31,144)	(39,264)
Buy-backs of secured bonds and debenture stock	(32,039)	(7,518)	(7,518)
	-----------	-----------	------------
Net cash outflow from financing activities	(49,044)	(51,511)	(68,919)
	-----------	-----------	------------
(Decrease)/increase in cash and cash equivalents	(59,802)	60,865	33,671
Cash and cash equivalents at the start of the period	124,383	88,394	88,394
Effect of foreign exchange rate changes	(1,586)	3,309	2,318
	------------	-----------	------------
Cash and cash equivalents at the end of the period	62,995	152,568	124,383
	=======	=======	=======

The gains on investments held at fair value through profit or loss include purchase transaction costs of £430,000 (half year ended 30 June 2008: £528,000; year ended 31 December 2008: £976,000) and sales transaction costs of £172,000 (half year ended 30 June 2008: £248,000; year ended 31 December 2008: £388,000).

  Page 13 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Notes to the Financial Statements

1	Basis of preparation  The condensed set of financial statements for the half year ended 30 June 2009 has been prepared on the basis of the accounting policies set out in the consolidated financial statements for the year ended 31 December 2008.
2	Earnings/(loss) per ordinary share The loss per ordinary share figure is based on the net loss for the half year of £9,949,000 (half year ended 30 June 2008: loss of £140,503,000; year ended 31 December 2008: loss of £279,216,000) and on 213,663,775 ordinary shares (half year ended 30 June 2008: 220,092,948; year ended 31 December 2008: 217,695,259), being the weighted average number of ordinary shares in issue during the period. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below.
		(Unaudited) Half year ended  30 June  2009 £'000	(Unaudited) Half year ended  30 June  2008 £'000	(Audited) Year ended 31 December 2008 £'000
	Net revenue profit	15,160	15,778	25,261
	Net capital loss	(25,109)	(156,281)	(304,477)
		--------------	--------------	--------------
	Net total loss	(9,949)	(140,503)	(279,216)
		========	========	========
	Weighted average number of  ordinary share in issue during the period	213,663,775	220,092,948	217,695,259
		Pence	Pence	Pence
	Revenue earnings per ordinary share	7.10	7.17	11.60
	Capital losses earnings per ordinary share	(11.76)	(71.01)	(139.86)
		--------------	--------------	--------------
	Total losses per ordinary share	(4.66)	(63.84)	(128.26)
		========	========	========

  Page 14 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Notes to the Financial Statements (continued)

3	Interim dividend The directors have declared an interim dividend of 4.30p (2008: 4.30p) per ordinary share, payable on Friday 11 September 2009 to shareholders registered on Friday 28 August 2009. The shares will be quoted ex-dividend on 26 August 2009.
4	Write-back of prior year's VAT on management fees Following a judgement of the European Court of Justice in June 2007, HM Revenue & Customs ('HMRC') accepted that the provision of investment management services to investment trust companies is VAT exempt and acknowledged its liability to pay claims in respect of VAT borne by investment trust companies. The Company recognised in the years ended 31 December 2007 and 2008 a total of £2,015,000, representing all the VAT on investment management fees borne by the Company in the period from 1 October 2000 to the point in 2007 from which VAT was no longer charged; this amount was received during the half year ended 30 June 2009. A further £1,249,000 has been recognised in the half year, as a reduction in expenses. This amount, which was received after 30 June 2009, represents all the VAT on investment management fees borne by the Company in the period from 1 January 1990 to 4 December 1996. Interest of £288,000 in respect of the period from 2000 to 2007 was received in the half year, of which £200,000 had been recognised in 2008. A further £806,000 has been recognised in the half year, as other income, in respect of interest for the period from 1990 to 1996; this amount had not been received at the date of this report.  The write-backs of VAT have been allocated between revenue and capital according to the allocation of the amounts originally paid; interest has been allocated to revenue. The Company may be able to recover VAT charged on investment management fees in the period from 1996 to 2000. However, the Board considers that currently the uncertainty is too great for any reasonable estimate to be made of what further amounts are recoverable.
5	Ordinary share capital At 30 June 2009 there were 213,234,054 ordinary shares in issue (30 June 2008: 216,282,439; 31 December 2008: 214,398,654). During the half year ended 30 June 2009 the Company bought 1,164,600 of its own issued ordinary shares in the market for cancellation (half year ended 30 June 2008: 7,144,060; year ended 31 December 2008: 9,027,845). The cost of the share buy-backs, including stamp duty, amounted to £3,970,000 (half year ended 30 June 2008: £31,917,000; year ended 31 December 2008: £38,706,000).
6	Net asset value per ordinary share The net asset value per ordinary share is based on the net assets attributable to the equity shareholders of £852,699,000 (half year ended 30 June 2008: £1,034,037,000; year ended 31 December 2008: £879,247,000) and on 213,234,054 (half year ended 30 June 2008: 216,282,439; year ended 31 December 2008: 214,398,654) ordinary shares, being the number of ordinary shares in issue at the period end.

  Page 15 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Notes to the Financial Statements (continued)

7	Subsidiary undertaking The Company has an investment in the issued ordinary share capital of its wholly owned subsidiary undertaking, Witan Investment Services Limited, which is registered in England and Wales, operates in the United Kingdom and is regulated by the Financial Services Authority.
8	Segment Reporting As detailed in the Company's Annual Report for the year ended 31 December 2008, geographical segments are considered to be the Group's primary reporting segment and business segments the secondary reporting segment. The Group has two business segments: its activity as an investment trust, which is the business of the parent company, and the business of the subsidiary company, Witan Investment Services Limited, which provides management services within the United Kingdom only. The investment trust is managed by reference to a geographical benchmark, as detailed on page 2; the geographical allocation of the equity portfolio, as at 30 June 2009, is set out on page 3.  The schedule on page 8 summarises the assets under management and investment performance relating to each investment manager. This information is updated and reviewed regularly for internal management purposes and is essential for assessing the structure of the overall portfolio and the performance of each investment manager.
		Half year ended 30 June 2009		Half year ended 30 June 2008		Year ended 31 December 2008
		Investment  trust £'000	Management services £'000	Investment trust £'000	Management services £'000	Investment trust £'000	Management services £'000
	Revenue from external customers	19,136*	353	22,604*	445	36,996*	766
	Carrying amount of assets	851,714	985	1,033,034	1,003	878,206	1,041
	*The investment and other income of the parent company.
9	Half year accounts  The condensed set of financial statements, forming the half year accounts, has been neither audited nor reviewed by the Company's auditors.
10	Comparative information The financial information contained in this half year financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the half years ended 30 June 2009 and 30 June 2008 has been neither audited nor reviewed by the auditors. The figures and financial information for the year ended 31 December 2008 are extracted from the latest published audited financial statements of the Company and do not constitute the statutory accounts for that year. The audited financial statements for the year ended 31 December 2008 have been filed with the Registrar of Companies. The report of the independent auditors on those accounts contained no qualification or statement under section 498(2) or section 498(3) of the Companies Act 2006.

Page 16 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2009

Notes to the Financial Statements (continued)

11

Financial report for the half year ended 30 June 2009 The financial report for the half year ended 30 June 2009 will be filed with the UK Listing Authority by 31 August 2009 and will be made available on the Company's website.  Printed copies will be sent to shareholders in September 2009 and will be available thereafter from the Secretary at the Company's registered office, 201 Bishopsgate, London EC2M 3AE.

For further information please contact:

Robert Clarke

Chief Executive Officer

Witan Investment Trust plc

Telephone: [phone]

James Frost

Marketing Director

Witan Investment Trust plc

Telephone: [phone]

Eleanor Mitchell or Hugo Mortimer-Harvey

Quill Communications

Telephone: [phone]

- ENDS -

 

END

 

 

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