Final Results

MAJEDIE INVESTMENTS PLC 20 November 2003 PRELIMINARY ANNOUNCEMENT OF RESULTS for the year ended 30 September 2003 Financial Highlights (per ordinary share) Year ended Year ended % change 30 September 30 September 2003 2002 Net asset value 246.6p 238.1p +3.6 Share price 198.0p 187.5p +5.6 Dividends 8.45p 8.15p +3.7 Earnings 7.52p 9.97p -24.6 Performance (total return per ordinary share) Year ended Year ended 30 September 30 September 2003 2002 Investment portfolio return (total assets) +9.7% -14.5% Net asset value +7.4% -21.4% Share price +10.5% -20.3% Benchmark +17.8% -21.5% Sources: Majedie; The WM Company; benchmark is 70% FTSE All-Share Index + 30% FTSE World ex UK Index. Dividend The proposed final dividend of 5.25p will be paid on 30 January 2004 to shareholders on the register at the close of business on 16 January 2004. Chairman's Statement Twelve months ago I reported on a financial year which had seen a large fall in stock market values. The effect of this on the portfolio had been significantly reduced through investment in defensive stocks and sectors and the holding of a large cash balance to reduce our effective gearing. For much of the financial year ended 30 September 2003 the Board continued to be cautious and the defensive stance in sector weightings and in stock selection was maintained. This was the main reason for the underperformance against the benchmark return of 17.8%, Majedie Investments' net assets having increased by 7.4% on a total return basis. In the longer term context of the last four years since the Investment Director joined the Company, the underlying investment performance of the portfolio of total assets has fallen 6.2% less than the benchmark. The element of portfolio gearing provided by our long term debentures has been a drag on results in recent years and, as markets fell, the Board took steps to prevent effective gearing reaching unacceptably high levels by requiring cash or bonds to be held to offset part of the debentures. With the recovery in markets in this current year net gearing has been of some benefit, even allowing for the fact that total assets include around £15m in cash deposits as a partial offset of our £ 39m of debentures. These cash or bond holdings will be an on-going element of our total assets in the near term, though I hope that in time stock markets will recover to levels that allow us to utilise our debenture gearing in full. Meanwhile the invested assets portfolio will be managed in relation to our 70/ 30 benchmark leaving out of account any cash or bonds held specifically to offset part of the fixed gearing. Our new fund management subsidiary, Majedie Asset Management, has been established with some considerable success. Total costs of £3.6m included, as planned, £1.5m relating to the new business. In last year's annual report we referred to the effect of these costs on our operating results during the initial period while the new business establishes its revenue base. This is part of the down-payment on our investment in the new company. Nevertheless Majedie Asset Management has got away to a flying start since FSA approval was received last December and recorded £150.7m of assets under management as at 30 September 2003. Furthermore the investment performance achieved since launch has been strong. These achievements both represent a considerable improvement on our original estimates and bode well for the future. Group revenue return before tax for the year was £3.6m compared with the previous year's £5.3m. This reduction results from the planned increase in the cost base of the new business referred to above and a reduction in income from the investment trust portfolio - down from £7.2m last year to £6.7m in the year just ended. Nevertheless we are proposing a dividend of 5.25p per share, which, added to the interim of 3.2p gives a total of 8.45p per share: an increase of 3.7% over the previous year. Further details regarding the management of the portfolio of investments and the analysis of business performance will be provided in the Annual Report which will be sent to shareholders on 5 December 2003. I am confident that in the current climate of modest stock market recovery from the ravages of the past three years, the Company is well placed to face the future. Following the early success in establishing Majedie Asset Management, we will continue to look for business development opportunities which will complement our current businesses and build on our existing capabilities. I would like to conclude by warmly thanking my colleagues on the boards of both Majedie Investments and Majedie Asset Management, and all the staff, for their unstinting support and hard work in the course of a year which has at times been highly challenging. Henry S Barlow Chairman 19 November 2003 For further information please contact Robert Clarke, Managing Director on 020 7645 8711; e-mail: rec@majedie.co.uk CONSOLIDATED STATEMENT OF TOTAL RETURN for the year ended 30 September 2003 Notes Year ended 30 September Year ended 30 September 2003 2002 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Net realised losses on (6,350) (6,350) (12,987) (12,987) sales Increase /(decrease) in 15,010 15,010 (22,473) (22,473) unrealised depreciation Total capital return on 8,660 8,660 (35,460) (35,460) investments Dividends and interest 6,671 6,671 7,180 7,180 Other income 71 71 25 25 Gross revenue and capital 6,742 8,660 15,402 7,205 (35,460) (28,255) return Administrative expenses (2,346) (1,226) (3,572) (1,143) (1,340) (2,483) Return on ordinary 4,396 7,434 11,830 6,062 (36,800) (30,738) activities before finance costs and taxation Finance costs (813) (2,437) (3,250) (812) (2,437) (3,249) Return on ordinary 3,583 4,997 8,580 5,250 (39,237) (33,987) activities before taxation Taxation on ordinary (77) (77) (102) (102) activities Return on ordinary 3,506 4,997 8,503 5,148 (39,237) (34,089) activities after taxation Minority interest 1 421 421 69 69 Return attributable to 3,927 4,997 8,924 5,217 (39,237) (34,020) equity shareholders Dividends 2 (4,413) (4,413) (4,250) (4,250) Transfer (from)/to (486) 4,997 4,511 967 (39,237) (38,270) reserves Basic and diluted return 7.52p 9.51p 17.03p 9.97p (74.55)p (64.58)p per ordinary share 3 The revenue column of this statement is the consolidated profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. CONSOLIDATED BALANCE SHEET Notes 30 30 September September 2002 2003 £000 £000 Fixed assets: Intangible assets 458 458 Tangible assets 450 378 Investments 4 152,779 147,474 153,687 148,310 Current assets: Debtors 1,278 3,505 Cash at bank and on 17,372 16,530 deposit 18,650 20,035 Creditors: Amounts 3,742 4,001 falling due within one year Net current assets 14,908 16,034 Total assets less 168,595 164,344 current liabilities Creditors: Amounts 39,382 39,370 falling due after more than one year Net assets 129,213 124,974 Called up share capital 5,253 5,253 Share premium account 785 785 Capital redemption 56 56 reserve Capital reserve - 76,587 86,600 realised Capital reserve - 21,146 6,136 unrealised Revenue reserve 25,577 26,063 Equity shareholders' 129,404 124,893 funds Minority interest 1 (191) 81 129,213 124,974 Net asset value per 246.6p 238.1p share 5 CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 September 2003 30 September 30 September 2003 2002 £000 £000 Operating activities Cash received from investments 6,283 6,442 Interest received 797 237 Cash payments (3,850) (2,003) Net cash inflow from operating 3,230 4,676 activities Servicing of finance Interest paid (3,237) (3,237) Net cash outflow from servicing of (3,237) (3,237) finance Taxation Tax recovered 17 76 Capital expenditure and financial investment Purchases of investments (58,073) (71,807) Sales of investments 63,220 84,074 Purchases of tangible assets (218) (348) Sales of tangible assets 9 - Net cash inflow from capital 4,938 11,919 expenditure and financial investment Equity dividends paid (4,256) (4,188) Cash inflow before financing 692 9,246 Financing Ordinary shares purchased for - (546) cancellation Minority interest purchase of shares 150 150 in subsidiary Net cash inflow/(outflow) from 150 (396) financing Increase in cash in the year 842 8,850 NOTES 1 Majedie Asset Management Limited Majedie Asset Management Limited was incorporated on 24 May 2002. Majedie Investments PLC owns 70% of the equity of the company. The results for the year ended 30 September 2003 amount to a loss of £1,404,000 and are included within Return on ordinary activities before finance costs and taxation (2002: loss of £231,000) The minority interest figure disclosed on the Statement of Total Return represents 30% of the company's loss from ordinary activities after taxation. The minority interest figure disclosed on the Consolidated Balance Sheet relates to 30% of the net assets attributable to the company's ordinary shareholders having taken into account the rights attaching to preference shares and creditors. 2 Dividends Following the granting of further share options to directors and employees on 22 November 2002 under the Majedie Investments PLC Discretionary Share Option Scheme 2000, the total number of options granted by the Company is 469,023 and the total shareholding of the Majedie Investments PLC Incentive Trust is 301,409 ordinary shares. The shares will be held by the trust until the relevant options are exercised or until they lapse and are included on the balance sheet as an asset of the Company according to UITF 13: Accounting for ESOP Trusts. The trust has waived its rights to receive dividends from the Company and therefore the total dividend included in the Statement of Total Return has been reduced accordingly. 3 Calculation of returns per ordinary share Basic return per ordinary share is based on 52,226,591 ordinary shares (2002: 52,342,057), being the weighted average number of shares in issue having adjusted for the shares held by the employee incentive trust referred to above. Basic returns per ordinary share are based on the return on ordinary activities after taxation attributable to equity shareholders, excluding any unrealised appreciation/(depreciation) in respect of the Company's own shares held in the employee incentive trust referred to above. There is no dilution to the basic return per ordinary share shown for the years ended 30 September 2002 and 2003 since the share options referred to above would, if exercised, be satisfied by the shares already held by the employee incentive trust. 4 Fixed Asset Investments Listed fixed asset investments are stated at market value except for the own shares held in the employee incentive trust as referred to in note 2. The shares held by the trust under option are stated at the lower of market value and exercise price. The value of these shares included within the fixed asset investments amounts to £594,000 (2002: £565,000). 5 Net Asset Value per ordinary share The net asset value per share has been calculated in accordance with the principles of Financial Reporting Standard No 14: Earnings per Share, i.e. after deducting the carrying value of the shares held by the employee incentive trust from net assets and the number of shares in question from the shares in issue at the year end. 6 Financial Information for the years ended 30 September 2003 and 2002 The preliminary figures for the year ended 30 September 2003 are an extract from the Company's latest accounts, prepared under the same accounting standards and policies, consistently applied, as the audited financial statements for the year ended 30 September 2002. The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 September 2003 or 2002, but is derived from those accounts. Statutory accounts for 2002 have been delivered to the Registrar of Companies, and those for 2003 will be delivered following the Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985. ANNUAL REPORT The annual report and accounts will be sent to shareholders on 5 December 2003 from which time copies will be available to the public at the Company's registered office: 1 Minster Court, Mincing Lane, London EC3R 7ZZ. ANNUAL GENERAL MEETING The Annual General Meeting will be held at 12.15pm on Wednesday 14 January 2004 at the London Underwriting Centre, 3 Minster Court, Mincing Lane, London EC3R 7DD. DIVIDEND The proposed final dividend of 5.25p per share will be paid on 30 January 2004 to shareholders on the register at the close of business on 16 January 2004. NOTES FOR EDITORS Majedie Investments PLC is a self managed investment trust with total assets under management of over £160 million. The Company's objective is to maximise total shareholder return over the long term whilst increasing dividends by more than the rate of inflation. The Company's benchmark is 70% FTSE All-Share Index and 30% FTSE World ex UK Index (sterling) on a total return basis. The Majedie Share Plan is a straightforward and low cost way of investing in Majedie shares with a minimum lump sum of £250, or on a regular monthly basis with £25 or more. The Majedie Corporate ISA provides a tax efficient way of investing or saving in Majedie shares at extremely low cost. There is no initial or annual management fee. Both maxi and mini ISAs are available with a minimum lump sum investment of £500 or £50 per month for direct debit subscribers.

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