Half Yearly Report

RNS Number : 6418V

Witan Investment Trust PLC

11 August 2015

 



WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

HIGHLIGHTS

·    During the first half of 2015, the Company's Net Asset Value ('NAV') total return was +5.5% compared with a benchmark return of +3.6% for the same period - a relative outperformance of 1.9%.

·    The share price total return was +5.8%, with the shares maintaining a premium to NAV.

·    A second interim quarterly dividend of 3.85p per ordinary share will be paid in September. Total dividends paid in respect of the period are 7.7p per ordinary share (2014: 7.2p).

FINANCIAL HIGHLIGHTS

Corporate key performance indicators
	(Unaudited) 30 June  2015	Change since 31 December 2014	(Unaudited) 30 June 2014	(Audited) 31 December 2014
Share price - ordinary share	788.5p	4.6%	706.5p	753.5p
Net asset value per ordinary share (debt at par value)	789.4p	3.8%	725.9p	760.3p
Net asset value per ordinary share (debt at market value)	782.2p	4.4%	717.5p	749.2p
Dividends per ordinary share	7.7p		7.2p	15.4p
Discount (debt at par value)	(0.1)%		(2.7)%	(0.9)%
Premium/(discount) (debt at market value)	0.8%		(1.5)%	0.6%
Share issues(A)	2.4%		0.0%	0.1%
On-going charges including performance fees(B)	0.48%		0.37%	0.96%
On-going charges excluding performance fees(B)	0.40%		0.38%	0.74%

(A)	The percentage of the ordinary share capital in issue at the previous year end that was issued during the period.
(B)	The total of the recurring operating and investment management costs (excluding the expenses of the subsidiary company) expressed as a percentage of the daily average net assets including debt at market value.

Performance
Total Returns to 30 June 2015	6 months return %	1 year return %	3 years return %	5 years return %
Total shareholder return (C)	5.8	13.9	86.4	112.2
Net asset value total return (D)	5.5	11.2	61.2	83.2
Benchmark (E)	3.6	6.8	43.4	66.3
FTSE All-Share Index(F)	3.0	2.6	36.9	66.6
FTSE World (ex UK) Index(F)	1.9	10.7	49.1	75.7

(C)	Source: Datastream.  The movement in the ordinary share price adjusted to include the notional reinvestment of dividends.
(D)	Source: Datastream/Witan.  The movement in the net asset value per share adjusted to include the notional reinvestment of dividends.
(E)	Source: Witan/FE Analytics.  The benchmark is 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%.
(F)	Source: Datastream.  See also FTSE International for conditions of use (www.ftse.com).

Page 2 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Other financial information
	(Unaudited) 30 June 2015	Change since 31 December 2014	(Unaudited) 30 June 2014		(Audited) 31 December 2014
Net assets	£1,532m	6.3%	£1,374m		£1,441m
Number of ordinary shares in issue	194,056,000	2.4%	189,301,000		189,561,000
Revenue return per ordinary share	10.91p		8.85p		15.88p
Gearing (G)	9.6%		8.8%		10.1%

(G) The difference between shareholders' funds and the total market value of the investments (including the face value of futures positions) expressed as a percentage of shareholders' funds.

PORTFOLIO INFORMATION

Portfolio by geographical classification as at 30 June 2015	%
United Kingdom*	41.7
North America	24.1
Continental Europe	17.6
Asia Pacific (ex Japan)	10.5
Japan	4.4
Latin America	0.6
Other	1.1
	----------
	100.0
	======

* underlying exposure 42.5% including index futures investment

Portfolio by sector breakdown as at 30 June 2015	%
Financials	26.6
Consumer Services	16.6
Industrials	14.4
Consumer Goods	12.3
Technology	7.5
Health Care	7.4
Open-ended Funds	5.1
Telecommunications	4.6
Oil & Gas	3.0
Basic Materials	1.7
Utilities	0.8
	----------
	100.0
	======

Page 3 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

INTERIM MANAGEMENT REPORT

Market background

2015 has been more eventful in economic and political terms than is suggested by the relatively small overall moves in global equity markets during the first half of the year. Buoyed by hopes of improving economic growth, markets showed strong gains during the first quarter, which were eroded in the second, as nerves were frayed by a renewed crisis over Greece's membership of the Euro currency area, by a sharp fall in the Chinese stock market and by the increased possibility that the US Federal Reserve would soon start raising interest rates (for the first time since 2006).

The year began with investors evaluating the impact of the halving of the oil price in late 2014. This fall led directly to lower inflation world-wide and to increased hopes that economic growth would be boosted in oil-consuming countries as the energy savings flowed through. In the event, growth was slow to pick up, partly for winter weather-related reasons in the US (similar to early 2014) and partly because the countries and companies hit by the fall in the oil price cut spending more rapidly than the beneficiaries spent the money they were saving on energy bills. This lull in growth appeared to be picking up by mid-year, with firmer than expected growth in developed economies (including Europe) outweighing relative weakness in China and other emerging economies.

A period of several months of falling retail prices helped fuel a rally in bond markets in early 2015, with yields reaching all-time lows and, in a number of economies, turning negative. The idea of lending your money to governments and having to pay them interest for the privilege began to lose any appeal as oil prices rallied off the lows and inflation rates bottomed out. Although bond yields remain very low by historic standards, volatility in bond markets has increased, which is thought-provoking for those accustomed to viewing bonds as a relatively safe part of investment portfolios.

As the half year ended, the possibility of Greece being forced to leave the Euro currency area prompted a rise in risk aversion, ensuring that equity markets finished June on a low note, despite the consensus amongst investors that Greece's economy was too small to have major effects elsewhere. Concern that one exit would cause other dominoes to fall was less acute than in the earlier Euro crisis of 2011-12, owing to a stronger European bank sector, the measures taken by other economies to stabilise their finances, the European Central Bank's range of measures to address financial market disruption and an improving growth backdrop across much of Europe.

Investment performance

The NAV total return (taking debt at market value) was +5.5%, which was 1.9% ahead of our equity benchmark's +3.6% return. The NAV total return (taking debt at par value) was 4.9%. The premium to NAV (taking debt at market value) was +0.8% at the end of June (end December: 0.6%), resulting in a share price total return of +5.8%.

8 of Witan's 11 external managers, together with the directly held portfolio, outperformed their respective benchmarks, while 3 underperformed during the period.

Page 4 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

INTERIM MANAGEMENT REPORT, continued

Portfolio changes

There were no changes to the appointed managers during the period, although allocations to Matthews in the Far East and Marathon in Europe were increased using available cash resources. Within the UK, some exposure was switched to managers with more stock picking exposure to mid cap and smaller companies. Within the direct holdings, the remaining holding in Electra Private Equity convertibles was sold into strength, while £21m was invested in the Apax Global Alpha private equity fund which listed on the London market in June. Advantage was taken of the (unwelcome) wider discount and lower price to add more cheaply to the existing position in BlackRock World Mining Trust.

After a period of significant relative strength in the Japanese market, the Polar Japan Growth OEIC holding and the position in Nikkei 225 index futures were both sold in the first quarter. Following the surprise Conservative win in the UK general election, a position of 1.5% was established in FTSE 100 futures, anticipating a more favourable policy environment for UK growth in coming years. This proved to be correct in relative terms but not yet in absolute terms, as the UK market's subsequent outperformance was insufficient to outweigh the general fall in markets during May and June.

Gearing

In April, the Company issued £21m of 20 year and £54m of 30 year fixed-interest debt at yields of 3.29% and 3.47% respectively. In the short term, the funds have been predominantly used to repay the Company's short-term borrowings of £55m but the issues also took account of the repayment of the Company's 8.5% Debenture stock due in October 2016. In the meanwhile, the size of the Company's short-term facility has been reduced from £70m to £25m, to reduce commitment costs. At the end of June, the drawn balance on this facility was nil.

The borrowing yields Witan secured are the lowest rates achieved in the sector for borrowing at such long maturities for many decades, if not in living memory. The Board believes that fixing borrowing costs at such low rates will benefit future shareholder returns. Following the issues, the Company has £185m of fixed-rate borrowings, which will reduce to £140m when the Debenture is repaid. The average interest rate paid on the Company's fixed-rate borrowings has declined from 7% (prior to the issue) to 5.6% and will fall further to 4.6% following repayment of the Debenture in 2016.

Taking account of cash balances and the face value of equity index futures, at the end of June gearing was 9.6%, slightly lower than the 2014 year-end figure of 10.1%.

Expenses

The ongoing charges figure ('OCF') for the six months was 0.40%, up from 0.38% for the first half of 2014. Including performance fees, the OCF was 0.48% for the first half of 2015, compared with 0.37% for the same period in 2014. These figures apply for the first half and are not annualised. The OCF for the whole of 2014 was 0.74% excluding performance fees and 0.96% including performance fees.

Page 5 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

INTERIM MANAGEMENT REPORT, continued

Within other operating expenses, there was a rise of £0.3m in payroll costs compared with the first half of 2014, owing to a strengthening of the Company's investment, operations and marketing resources. General expenses rose by £0.2m in the first half of the year. This was as a result of costs linked to value creation for shareholders (listing fees for the new Block listing facility and fees for advice on European tax reclaims) and depositary fees connected with the implementation of the Alternative Investment Fund Managers Directive ('AIFMD') in July 2014. These increases were partly offset by lower consultancy and legal fees.

Base management fees paid to external delegated managers were 18% higher than those in the first half of 2014, owing to increases in the assets under management in the managers' portfolios. There was a £1.2m accrual for performance fees due to the external delegated managers, compared with a reduction in accruals of £0.02m in the 2014 half year report. This reflects a stronger overall performance during the period by managers with performance-related fees.

Investment income

Gross revenue was 23% higher than in the first half of 2014, reflecting changes in holdings as well as underlying changes in portfolio dividends. The figures benefited from higher company pay-outs and from a weaker level of sterling than a year ago compared with the dollar, offset partly by strength relative to the euro. Expenses charged to revenue increased by 17%, due to higher market levels feeding through to investment management fees paid to external delegated managers, as well as a rise in regulatory costs following the introduction of the AIFMD mid-way through 2014. As a result of these factors, the Company's revenue earnings per share were 23% higher compared with the first half of 2014, at 10.91p.

Dividend

The Board's policy is that the first three interim dividends of the current financial year (paid in June, September and December) will, in the absence of unforeseen circumstances, be paid at the rate of one quarter of the total payment in respect of the previous year.

Accordingly, a second interim dividend of 3.85p per ordinary share, being one quarter of the total dividend paid in respect of 2014 (15.40p), will be paid on 18 September 2015 to shareholders on the register on 21 August 2015. This follows the first interim dividend of 3.85p per ordinary share paid on 18 June 2015.

The fourth payment (in March 2016) will be a balancing amount, reflecting the difference between the three quarterly dividends already paid and the payment decided for the full year. The full year's dividend is intended to be consistent with the Company's policy to increase the total annual dividend in real terms, ahead of inflation.

The Company has increased its dividend every year since 1974 (a 40 year record of increases), recognising the importance for its investors of a reliable and growing income.

Page 6 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

INTERIM MANAGEMENT REPORT, continued

The discount, share buybacks and issuance

Over the past year the rating at which Witan's shares have traded in the market has improved further, with a discount of 1.5% (taking debt at market value) in June 2014 moving to a premium of 0.8% at the end of June 2015. The shares have traded at a premium for much of 2015, which enabled the Company to issue 4.5m new shares during the period at a premium to NAV to meet investor demand in the market. This is beneficial to shareholders in several ways. The issuance itself is modestly accretive to NAV (+£0.3m in the first half of 2015), being made at a premium to NAV. The increased market liquidity is particularly helpful to investors contemplating more substantial investments and the increased size of the Company enables its fixed costs to be spread over a wider base. Whilst delivery of sound investment performance remains the principal focus of the Board, it has also always paid attention to discount-related issues. In the 15 years prior to 2013 the Company bought back a total of over 49% of the initial shares, so it is a positive contrast to have been able to expand the number of shares this year by 2.4% following the rerating of the Company's shares seen since 2012.

As stated in the half year report a year ago, the Company is pleased to have met its longstanding target of achieving a discount below 10% and clearly it is in shareholders' interests for Witan's shares to continue to be highly rated in the market. With this in mind, although no new discount target is set, the Company will, as in the past, be prepared to buy back shares taking account of prevailing market conditions, the level of the discount and the impact on the NAV per share. Similarly, where it is in shareholders' interests, the Company may issue shares at a premium to NAV.

Outlook

The developed world entered the second half of the year with economic growth improving and becoming more synchronised after the contrasting fortunes seen in recent years. The US and UK economies are growing at rates that have brought forward expectations that current near-zero interest rates will soon start to rise, although the authorities have been careful to reassure that the pace of tightening will be gradual. Within Europe, growth is unevenly distributed but, with the clear exception of Greece, generally at a faster pace than 2014.

The main areas of concern centre on emerging economies. China's economy has been slowing for some years, amid concerns that a period of excessive property and infrastructure investment had left its banks exposed to bad debts. This year has also seen the puffing up and bursting of a domestic stock market bubble, which risks undermining confidence in China's nascent financial markets. The jury is out on whether the authorities will be able to steer the economy towards a soft landing. Some other emerging economies have been hit by the weakness in oil and other commodity prices, as well as worries that they will suffer capital outflows if the US Federal Reserve tightens liquidity.

Page 7 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

INTERIM MANAGEMENT REPORT, continued

Despite the adjustment pains in some emerging economies and in parts of Europe, there appear to be more economic tailwinds than headwinds. Corporate earnings are improving, the effect of low oil prices should support consumer demand in oil-importing countries and liquidity trends remain positive, with central banks in Europe, Japan and a number of Asian economies easing policy, while rate increases in the US, and possibly the UK, seem likely to be very gradual. An environment of moderate economic growth and subdued inflation should favour equity investment, although there are few windfalls after the gains seen in recent years. This argues for selectivity, both in the markets and individual stocks invested in and in avoiding pockets of speculative excess, such as have occurred in government bond markets in early 2015 and more recently in the Chinese domestic market.

For and on behalf of the Board

Harry Henderson                                                                                  Andrew Bell

Chairman                                                                                              Chief Executive Officer

11 August 2015

Page 8 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

REGULATORY DISCLOSURES

Going concern

The assets of the Company consist mainly of securities that are readily realisable and, accordingly, the Company has adequate financial resources to continue in operational existence for the foreseeable future. Therefore, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements. In reviewing the position as at the date of this report, the Board has considered the guidance on this matter issued by the Financial Reporting Council.

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 any past related party transactions are contained in the Company's Annual Report for the year ended 31 December 2014.

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

• the appropriateness of the corporate objective and strategy

• operational and regulatory risks.

Information on these risks is given in the Strategic Report and in the Notes to the Financial Statements in the Company's Annual Report for the year ended 31 December 2014.

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  

Harry Henderson

Chairman

11 August 2015

Page 9 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Investment managers:  Assets under management and investment performance as at 30 June 2015

Investment Manager	Appointment date	% of Witan's funds under management at 30.06.15(1)	Performance in the half year (%)	Benchmark performance in the half year (%)	Performance since appointment  (%)(2)	Benchmark performance since appointment  (%)(2)
Artemis Investment Management (UK)	06.05.08	10.3	4.1	3.0	11.1	5.4
Heronbridge (UK)	17.06.13	6.7	9.0	3.0	13.0	6.7
Lindsell Train (UK)	01.09.10	10.6	6.9	3.0	18.9	9.7
Lansdowne Partners (Global)	14.12.12	10.1	5.1	(0.5)	27.2	11.5
MFS International (Global)	30.09.04	8.2	2.3	2.2	12.1	9.2
Pzena (Global)	02.12.13	9.2	2.1	2.2	7.4	9.2
Tweedy, Browne (Global)	02.12.13	3.0	1.5	2.2	6.7	9.2
Veritas Asset Management (Global)	11.11.10	12.1	4.2	2.1	12.5	9.5
Marathon Asset Management (Pan-Europe)	23.07.10	7.7	6.4	3.4	10.7	8.1
Matthews International Capital Management  (Asia Pacific inc. Japan)	20.02.13	11.1	10.4	6.6	7.8	5.1
Trilogy Global Advisors (Emerging Markets)	09.12.10	3.0	(3.9)	2.2	(3.8)	(0.2)
Witan Direct Holdings	19.03.10	8.0	4.4	3.6	8.9	7.7

Notes:

1	Percentage of Witan assets managed, excluding central cash balances.
2	Percentages are annualised where the appointment date was before 2014.
Source:  The WM Company.

Page 10 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Consolidated Statement of Comprehensive Income

	(Unaudited)   Half year ended   30 June 2015			(Unaudited)   Half year ended   30 June 2014			(Audited) Year ended 31 December 2014
	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	26,561	-	26,561	21,423	-	21,423	38,297	-	38,297
Other income	728	-	728	742	-	742	1,440	-	1,440
Gains on investments    held at fair value through profit    or loss (Note 2)	-	56,029	56,029	-	5,096	5,096	-	79,073	79,073
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Total income	27,289	56,029	83,318	22,165	5,096	27,261	39,737	79,073	118,810
Expenses
Management and performance    fees	(860)	(3,790)	(4,650)	(731)	(2,171)	(2,902)	(1,541)	(7,623)	(9,164)
Other expenses	(3,107)	(51)	(3,158)	(2,671)	(51)	(2,722)	(4,798)	(101)	(4,899)
	---------	---------	---------	---------	---------	---------	---------	---------	---------
Profit before finance costs    and taxation	23,322	52,188	75,510	18,763	2,874	21,637	33,398	71,349	104,747
Finance costs	(1,137)	(3,286)	(4,423)	(1,045)	(3,009)	(4,054)	(2,115)	(6,095)	(8,210)
	---------	---------	---------	---------	---------	---------	---------	---------	---------
Profit/(loss) before taxation	22,185	48,902	71,087	17,718	(135)	17,583	31,283	65,254	96,537
Taxation	(1,197)	-	(1,197)	(968)	-	(968)	(1,218)	-	(1,218)
	---------	---------	---------	---------	---------	---------	---------	---------	---------
Return attributable to equity shareholders	20,988	48,902	69,890	16,750	(135)	16,615	30,065	65,254	95,319
	=====	=====	=====	=====	=====	=====	=====	=====	=====
Earnings/(loss) per ordinary share (Note 3)	10.91p	25.42p	36.33p	8.85p	(0.07p)	8.78p	15.88p	34.47p	50.35p
	======	======	======	======	======	======	======	======	======

The total column of this statement represents the Group's Statement of Comprehensive Income, prepared in accordance with IFRSs as adopted by the European Union. 

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. 

The Group does not have any other comprehensive income and hence the total profit for the period, as disclosed above, is the same as the Group's total comprehensive income.

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

Page 11 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Consolidated Statement of Changes in Equity

		(Unaudited) Half year ended 30 June 2015
	Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2014	47,390	18,106	46,498	1,274,185	55,068	1,441,247
Total comprehensive income:  Profit for the period	-	-	-	48,902	20,988	69,890
Transactions with owners, recorded directly to equity:  Ordinary dividends paid	-	-	-	-	(16,176)	(16,176)
Issue of ordinary shares (note 5)	1,124	35,890	-	-	-	37,014
	----------	-----------	----------	-------------	-----------	------------
At 30 June 2015	48,514	53,996	46,498	1,323,087	59,880	1,531,975
	======	======	======	========	======	=======

		(Unaudited) Half year ended 30 June 2014
	Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2013	47,328	16,237	46,498	1,208,931	53,950	1,372,944
Total comprehensive income: (Loss)/profit for the period	-	-	-	(135)	16,750	16,615
Transactions with owners, recorded directly to equity:  Ordinary dividends paid	-	-	-	-	(15,334)	(15,334)
Buybacks of ordinary shares (note 5)	-	-	-	(69)	-	(69)
	----------	-----------	----------	-------------	-----------	------------
At 30 June 2014	47,328	16,237	46,498	1,208,727	55,366	1,374,156
	======	======	======	========	======	=======

		(Audited) Year ended 31 December 2014
	Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2013	47,328	16,237	46,498	1,208,931	53,950	1,372,944
Total comprehensive income:  Profit for the year	-	-	-	65,254	30,065	95,319
Transactions with owners, recorded directly to equity:  Ordinary dividends paid	-	-	-	-	(28,947)	(28,947)
Buybacks of ordinary shares (note 5)	-	-	-	(363)	-	(363)
Issue of ordinary shares (note 5)	62	1,869	-	363	-	2,294
	------------	------------	------------	-------------	---------	------------
At 31 December 2014	47,390	18,106	46,498	1,274,185	55,068	1,441,247
	=======	======	=======	========	=====	=======

Page 12 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Consolidated Balance Sheet

	(Unaudited) 30 June  2015 £'000	(Unaudited) 30 June 2014 £'000	(Audited) 31 December 2014 £'000
Non current assets
Investments held at fair value through profit or loss	1,654,063	1,455,689	1,552,278
	--------------	--------------	-------------
Current assets
Other receivables	9,971	8,234	6,931
Cash and cash equivalents	67,544	58,437	46,554
	--------------	--------------	-------------
	77,515	66,671	53,485
	--------------	--------------	-------------
Total assets	1,731,578	1,522,360	1,605,763
Current liabilities
Other payables	(14,643)	(10,800)	(9,088)
Bank loan	-	(27,000)	(45,000)
	--------------	--------------	-------------
	(14,643)	(37,800)	(54,088)
	--------------	--------------	-------------
Total assets less current liabilities	1,716,935	1,484,560	1,551,675
	--------------	--------------	-------------
Non current liabilities
At amortised cost:
8½ per cent. Debenture Stock 2016	(44,580)	(44,583)	(44,581)
6.125 per cent. Secured Bonds due 2025	(63,327)	(63,266)	(63,292)
3.29 per cent. Secured Notes due 2035	(20,860)	-	-
3.47 per cent. Secured Notes due 2045	(53,638)	-	-
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)
	--------------	--------------	-------------
	(184,960)	(110,404)	(110,428)
	--------------	--------------	-------------
Net assets	1,531,975	1,374,156	1,441,247
	========	========	========
Equity attributable to equity holders
Ordinary share capital (Note 5)	48,514	47,328	47,390
Share premium account	53,996	16,237	18,106
Capital redemption reserve	46,498	46,498	46,498
Retained earnings:
Other capital reserves	1,323,087	1,208,727	1,274,185
Revenue reserve	59,880	55,366	55,068
	--------------	--------------	-------------
Total equity	1,531,975	1,374,156	1,441,247
	========	========	========
Net asset value per ordinary share (Note 6)	789.45p	725.91p	760.31p
	========	========	========

Page 13 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Consolidated Cash Flow Statement

	(Unaudited) Half year ended 30 June 2015 £'000	(Unaudited) Half year ended 30 June 2014 £'000	(Audited) Year ended 31 December 2014 £'000
Operating activities
Profit before taxation	71,087	17,583	96,537
Interest paid	4,423	4,054	8,210
Gains on investments held at fair value through profit or loss	(56,029)	(5,096)	(79,073)
Net purchases of investments held at fair value through profit or loss	(43,973)	(11,392)	(38,165)
(Increase)/decrease in other receivables	(2,974)	95	(302)
Increase/(decrease) in other payables	859	(38)	956
Scrip dividends included in investment income	(617)	(595)	(1,200)
Net gain from futures contracts	1,470	275	6,413
	------------	------------	------------
Net cash (outflow)/inflow from operating    activities before interest and taxation	(25,754)	4,886	(6,624)
Interest paid	(4,157)	(4,023)	(8,149)
Tax on overseas income	(1,395)	(1,176)	(1,962)
Recovery of prior years' withholding tax	103	-	581
	------------	------------	------------
Net cash outflow from operating activities	(31,203)	(313)	(16,154)
	------------	------------	------------
Financing activities
Equity dividends paid	(16,176)	(15,334)	(28,947)
Issue of secured notes net of issue expenses	74,496	-	-
Buybacks of ordinary shares	-	(69)	(363)
Issue proceeds of ordinary shares	38,943	-	365
(Repayment)/drawdown of bank loans	(45,000)	17,000	35,000
	------------	------------	------------
Net cash inflow from financing activities	52,263	1,597	6,055
	------------	------------	------------
Increase/(decrease) in cash and cash equivalents	21,060	1,284	(10,099)
Cash and cash equivalents at the start of the period	46,554	57,532	57,532
Effect of foreign exchange rate changes	(70)	(379)	(879)
	------------	------------	------------
Cash and cash equivalents at the end of the period	67,544	58,437	46,554
	=======	=======	=======

Page 14 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Notes to the Financial Statements

1	Basis of preparation The condensed set of financial statements for the half year ended 30 June 2015 has been prepared on the basis of the accounting policies set out in the consolidated financial statements for the year ended 31 December 2014.
2	Transaction costs The gains on investments held at fair value through profit or loss include purchase transaction costs of £652,000 (half year ended 30 June 2014: £502,000; year ended 31 December 2014: £607,000) and sale transaction costs of £234,000 (half year ended 30 June 2014: £212,000; year ended 31 December 2014: £304,000). The purchase transaction costs comprise mainly stamp duty and commissions. The sale transaction costs comprise mainly commissions.
3	Earnings/(loss) per ordinary share The earnings per ordinary share figure is based on the net profit for the half year of £69,890,000 (half year ended 30 June 2014: £16,615,000; year ended 31 December 2014: £95,319,000) and on 192,359,094 ordinary shares (half year ended 30 June 2014: 189,304,589; year ended 31 December 2014: 189,302,044) 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 2015 £'000	(Unaudited) Half year ended 30 June 2014 £'000	(Audited) Year ended 31 December 2014 £'000
	Net revenue profit	20,988	16,750	30,065
	Net capital profit/(loss)	48,902	(135)	65,254
		--------------	--------------	--------------
	Net total profit	69,890	16,615	95,319
		========	========	========
	Weighted average number of ordinary shares in issue during the period	192,359,094	189,304,589	189,302,044
		Pence	Pence	Pence
	Revenue earnings per ordinary share	10.91	8.85	15.88
	Capital earnings/(loss) per ordinary share	25.42	(0.07)	34.47
		--------------	--------------	--------------
	Total earnings per ordinary share	36.33	8.78	50.35
		========	========	========
4	Interim dividend The Directors have declared a second interim dividend of 3.85p per ordinary share (2014: 3.6p), payable on 18 September 2015 to shareholders registered on 21 August 2015. The shares will be quoted ex-dividend on 20 August 2015. A first interim dividend of 3.85p (2014: 3.6p) was paid on 18 June 2015.

Page 15 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Notes to the Financial Statements (continued)

5	Ordinary share capital At 30 June 2015 there were 194,056,000 ordinary shares in issue (30 June 2014: 189,301,000; 31 December 2014: 189,561,000) and nil shares held in treasury (30 June 2014: 10,000; 31 December 2014: nil). During the half year ended 30 June 2015 the Company issued 4,495,000 of its own ordinary shares (half year ended 30 June: 10,000 bought back and held in treasury; year ended 31 December 2014: 51,000 bought back, held in treasury and subsequently reissued, and 250,000 issued). The proceeds of the share issues were £37,014,000 (half year ended 30 June 2014: cost of buybacks £69,000; year ended 31 December 2014: cost of buybacks £363,000 and proceeds of £2,294,000).
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 £1,531,975,000 (30 June 2014: £1,374,156,000; 31 December 2014: £1,441,247,000) and on 194,056,000 ordinary shares (30 June 2014: 189,301,000; 31 December 2014: 189,561,000), being the number of ordinary shares in issue at the period end.
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 Conduct Authority.
8	Financial Instruments
	Carrying amount versus fair values At the period end, the carrying value of financial assets and financial liabilities approximates their fair value with the exception of the non current liabilities as detailed below:
			Fair value £'000		Carrying amount £'000
	Financial liabilities measured at amortised cost: Non current liabilities Preference shares Debenture stock Secured bonds Fixed rate loan notes		1,389 48,118 79,059 70,429 198,995		2,555 44,580 63,327 74,498 184,960
	Financial instruments carried at fair value
	Fair value hierarchy
	The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used. The different levels are defined as follows:
	Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability.
	Financial assets and financial liabilities at fair value through profit or loss at 30 June 2015	Level 1 £'000		Level 2 £'000		Level 3 £'000	Total £'000
	Investments including derivatives:
	Equity securities designated at fair value through profit or loss	1,569,591		-		-	1,569,591
	Investments in other funds	-		84,472		-	84,472
	Derivatives (nominal exposure of £24,677,000)	(748)		-		-	(748)
	Total financial assets and liabilities carried at fair value	1,568,843		84,472		-	1,653,315

Page 16 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Notes to the Financial Statements (continued)

	There were no level 3 investments during the 6 months to 30 June 2015. There have been no transfers between levels of the fair value hierarchy during the period. Transfers between levels of fair value hierarchy are deemed to have occurred at the date of the event or change in circumstances that caused the transfer. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows: Level 1: valued using quoted prices in active markets for identical assets. Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1. Included in Level 2 are investments in Trilogy Emerging Markets Fund, Polar Capital Insurance Fund and iShares MSCI fund. Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data. The valuation techniques used by the Company are explained in the accounting policies in the year end accounts.
9	Segment reporting As detailed in the Company's Annual Report for the year ended 31 December 2014, 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: (i) its activity as an investment trust, which is the business of the parent company, and recorded in the accounts of that company; and (ii) the provision of alternative investment fund manager, executive and marketing management services and the management of savings schemes, which is the business of the subsidiary company, Witan Investment Services Limited, and recorded in the accounts of that company. The investment trust is managed by reference to a geographical benchmark, as detailed on page 1 above; the geographical allocation of the portfolio, as at 30 June 2015, is set out on page 2 above. The schedule on page 9 above 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 2015		Half year ended 30 June 2014		Year ended 31 December 2014
		Investment trust £'000	Management services £'000	Investment trust £'000	Management services £'000	Investment trust £'000	Management services £'000
	Revenue	26,711*	578	21,587*	578	38,635*	1,102
	Carrying amount of assets	1,530,670	1,305	1,373,073	1,083	1,440,053	1,194
	*The investment and other income of the parent company.

Page 17 of 17

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2015

Notes to the Financial Statements (continued)

10	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.
11	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 2015 and 30 June 2014 has been neither audited nor reviewed by the auditors. The figures and financial information for the year ended 31 December 2014 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 2014 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.
Financial report for the half year ended 30 June 2015 The financial report for the half year ended 30 June 2015 will be filed with the UK Listing Authority by 31 August 2015 and will be made available on the Company's website. Printed copies will be sent to shareholders in August 2015 and will be available thereafter from the Secretary at the Company's registered office, 14 Queen Anne's Gate, London SW1H 9AA.

For further information please contact:

Andrew Bell

Chief Executive Officer

Witan Investment Trust plc

Telephone:  [phone]

Hannah Philp

Director of Marketing

Witan Investment Trust plc

Telephone:  [phone]

Sara Neidle

Newgate Communications

Tel: [phone]

[e-mail]

-  ENDS -

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

 

END

 

 

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