Half-yearly Report

Manchester & London Investment Trust plc ("MLIT" or the "Company") ANNOUNCEMENT OF THE UNAUDITED INTERIM GROUP RESULTS For the six months ended 31 January 2009 The Directors announce the unaudited interim group results for the six months ended 31 January 2009. The key highlights for the period: - Net Asset Value per share has decreased by 8.9 per cent to 311.4p, which compares with a fall of 24.4 per cent in our benchmark over the period. - Whilst there was a loss on the capital account of 28.9p per share, the revenue earnings per share were 6.0p. - The Directors have declared an interim dividend of 4.5p per share to be paid on 24 April 2009 to all shareholders on the Register at the close of business on 27 March 2009. Shareholders will note an increase in the interim dividend from 2.5p (2008) to 4.5p. This increase has been undertaken to provide a more equally balanced division between the interim and final dividend at the request of a number of shareholders. Therefore this increase should not be construed as a signal that the aggregate annual dividend will be higher for 2009. Chairman's Statement Half Year Results and Dividend The global financial outlook has continued to deteriorate since I wrote to shareholders in October 2008 and, regrettably, I cannot yet see any light at the end of the economic and financial tunnels, apart from the introduction (to the US and UK) of the untried financial experiment known as quantitative easing ("QE"). Against this background, I am pleased to report that our assets and earnings have been reasonably maintained when compared with our benchmark, the FTSE All-Share Index. This has been achieved by holding an overweight position in cash together with a high proportion of assets in multi-national FTSE 100 stocks which are very marketable. Nevertheless, shareholders will note that cash balances as at 31st January this year were lower than at the year end on 31st July 2008; this apparent contradiction of policy reflects our belief that the next phase of the current crisis could see a further deterioration in the market. Shareholders will also note an increase in the interim dividend from 2.5p to 4.5p. This increase has been undertaken to provide a more equally balanced division between the interim and final dividend at the request of a number of shareholders. Therefore this increase should not be construed as a signal that the aggregate annual dividend will be higher for 2009. A Period of Market Turbulence After a quiet start to the current financial year, by the end of August the market showed no doubt that the prime trend had changed with a vengeance, the FTSE All-Share Index falling from 2868 on 29th August to 1931 by the end of October. Since then (over a period of four months) it has moved sideways within a range of 1890 - 2320; opinion is divided as to whether this uneasy movement reflects the bottom of the market. Our policy is to keep an open mind with a reluctance to commit further funds until a clearer picture emerges. The trigger for the deterioration in global markets stems from the Lehman Bros' collapse, and the speed of the decline in interest rates is unprecedented since the foundation of the Bank of England in 1694. Whilst our investment thinking is based on fundamentals, it is interesting to note that the "chartist" theory is the longer the index remains in a tight range, the more violent will be the break-out when it comes, irrespective of whether it is up or down. Either way, we remain cautious until the outlook is clearer. On a more prosaic note, I can confirm that net returns received as a result of takeover bids for stocks held, amounted to £137,000 for our TDG holding of 567,500 shares, and also a sum of £388,000 resulting from the EDF bid for British Energy. Notwithstanding the excessive payment scandals in the higher echelons of UK banking, there are few positive signs of a solution to the current problems. There appears to be limited inter-bank lending, and Governments still seem to be paralysed by events despite the recent Davos gathering to pool ideas and produce the formation of a solution. In any event, this will have to be adaptable to the US financial system from whence the troubles emanated. The UK Government has, after a period of hesitation, now taken the plunge and introduced QE, which is their latest "buzz phrase" for controlled inflation; whether it is that easy to control is another matter as, once the genie is out of the bottle, it is difficult to put it back inside. Nevertheless, the prospect of a bout of inflation could mitigate the risk of a further deterioration of share prices. As yet, we have not entered into any borrowing agreements with our bankers, but we are likely to negotiate an appropriate facility in the near future in the event of inflation re-emerging. The Portfolio As referred to earlier in this report, we are holding 16 per cent of our assets in cash, despite the fact that it is difficult to obtain a satisfactory return because of the near zero level of interest rates. We have, however, generated a reasonable return from the money markets. Our equity assets all have potential for capital appreciation, despite the uncertainties. Our largest holding is still PZ Cussons plc which has recovered well from a fall late last year and now represents 19 per cent of our assets. The company is uniquely positioned with 57 per cent of its profits being earned in Nigeria and Indonesia and, despite uncertainties, these are both high growth areas for the foreseeable future despite the political history. We are also of the opinion that Microsoft will make another approach to acquire the Yahoo search engine division despite the breakdown of negotiations last year. Other substantial holdings are Tesco plc, Vodafone Group plc, Syngenta AG (fertilisers and agricultural chemicals), Friends Provident plc (new management) and Mouchel Group plc, all of which are relatively protected from recessionary factors, although not immune. Outlook This "bear" market is unusual, which is why the authorities have not yet been able to find a solution. Whilst the consensus opinion seems to be that the cause has been a banking collapse brought about by reckless and profligate lending, the creation of replacement funds using the QE formula for introducing them as a replacement for that which has been "lost", is proving extremely difficult. As mentioned earlier, the solution will have to be mutually acceptable not only to the US but also other major trading nations (excluding, as yet, the EU countries). Whatever the solution(s), it will take much longer to recover from this crisis, and it will be interesting to see how, and in what form, the financial world re-emerges. In the meantime, and because of the QE experiment, we have become fully invested on the basis that we are likely (but not certainly) to find that the next problem will be inflation. P H A Stanley Chairman 10 March 2009 For enquiries: Manchester & London Investment Trust plc Kevin Kaye Company Secretary Tel: 0161 242 8246 Midas Investment Management Limited Mark Sheppard Tel: 020 7225 1836 Notes: Trust Performance At At Percentage 31st January 31st July Increase / 2009 2008 (Decrease) Net assets attributable to Equity 43,434 47,669 (8.9) Shareholders (£'000) Net asset value per Ordinary 25p share (p) 311.4 341.8 (8.9) FTSE Actuaries All-Share Index 2,078.9 2,749.2 (24.4) The price and net asset value per share is published daily in the Investment Companies Sector of the Financial Times. Ten Largest Investments As at 31st January 2009 % of Portfolio Valuation Sector £'000 PZ Cussons plc 8,363 19.93 Personal Goods Mouchel Group plc 4,591 10.94 Support Services Syngenta AG 2,818 6.72 Pharmaceutical & Biotechnical Yahoo! Inc (Ordinary stock) 2,266 5.40 IT Consultancy & Other Services Aberdeen Asset Management plc 2,154 5.13 Financial Services Vodafone plc 1,945 4.63 Mobile Telecommunications Friends Provident plc 1,929 4.60 Life Insurance Smiths Group plc 1,591 3.79 Aerospace & Defence BT Group plc 1,505 3.59 Fixed Line telecommunications Premier Oil plc 1,219 2.90 Oil & Gas Producers Consolidated Income Statement For the six months ended 31st January 2009 (Unaudited) (Unaudited) (Audited) 6 months ended 6 months ended Year ended 31st January 2009 31st January 2008 31st July 2008 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment Income 775 - 775 1,149 - 1,149 1,244 - 1,244 Trading Income 169 - 169 - - - 576 - 576 Gains Gains on investments at fair value - (3,739) (3,739) - 1,192 1,192 - (4,407) (4,407) Total Income 944 (3,739) (2,795) 1,149 1,192 2,341 1,820 (4,407) (2,587) Expenses Management fee (35) (68) (103) (59) (121) (180) (78) (146) (224) Transaction costs - (216) (216) - (107) (107) - (382) (382) Other operating (72) - (72) (104) - (104) (175) - (175) expenses Finance costs (3) - (3) (55) - (55) (5) - (5) Total expenses (110) (284) (394) (218) (228) (446) (258) (528) (786) Profit before tax 834 (4,023) (3,189) 931 964 1,895 1,562 (4,935) (3,373) Taxation - - - - - - (117) - (117) Profit attributable to 834 (4,023) (3,189) 931 964 1,895 1,445 (4,935) (3,490) Equity shareholders Earnings per 5.98 (28.85) (22.87) 6.67 6.91 13.58 10.36 (35.38) (25.02) ordinary share (p) Consolidated Statement of Changes in Equity For the six months ended 31st January 2009 Unaudited Six months ended 31st January 2009 Capital Capital Share Share Other Reserve Reserve Retained Capital Premium Reserves Unrealised Realised Earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 2008 3,487 9,921 (79) 6,684 24,035 3,621 47,669 Profit for the period - - - - - (3,189) (3,189) Transfer of capital profits - - - (2,189) (2,413) 4,602 - Ordinary dividend paid - - - - - (1,046) (1,046) 3,487 9,921 (79) 4,495 21,622 3,988 43,434 Unaudited Six months ended 31st January 2008 Capital Capital Share Share Other Reserve Reserve Retained Capital Premium Reserves Unrealised Realised Earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 2007 3,487 9,921 (79) 12,485 23,169 3,571 52,554 Profit for the period - - - - - 1,895 1,895 Transfer of capital profits - - - 533 431 (964) - Ordinary dividend paid - - - - - (1,046) (1,046) 3,487 9,921 (79) 13,018 23,600 3,456 53,403 Audited Six months ended 31st July 2008 Capital Capital Share Share Other Reserve Reserve Retained Capital Premium Reserves Unrealised Realised Earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 2007 3,487 9,921 (79) 12,485 23,169 3,571 52,554 Profit for the period - - - - - (3,490) (3,490) Transfer of capital profits - - - (5,801) 866 4,935 - Ordinary dividend paid - - - - - (1,395) (1,395) 3,487 9,921 (79) 6,684 24,035 3,621 47,669 Consolidated Balance Sheet As at 31st January 2009 (Unaudited) (Unaudited) (Audited) 31st January 31st January 31st July 2009 2008 2008 £'000 £'000 £'000 Non-current Assets Investments held at fair value through profit or loss 34,992 48,702 31,246 Current Assets Trade and other receivables 1,681 2,315 812 Cash and cash equivalents 6,973 3,073 15,836 8,654 5,388 16,648 Current Liabilities Trade and other payables (212) (687) (225) Net current Assets 8,442 4,701 16,423 Net Assets 43,434 53,403 47,669 Capital and Reserves Called-up share Capital 3,487 3,487 3,487 Share Premium 9,921 9,921 9,921 Capital reserve - realised 21,622 23,600 24,035 Capital reserve - unrealised 4,495 13,018 6,684 Goodwill reserve (79) (79) (79) Retained earnings 3,988 3,456 3,621 Total equity shareholders' funds 43,434 53,403 47,669 Net Asset Value per share (pence) 311.4 382.9 341.8 Ordinary shares - fully diluted Consolidated Cash Flow Statement As at 31st January 2009 (Unaudited) (Unaudited) (Audited) 31st January 31st January 31st July 2009 2008 2008 £'000 £'000 £'000 Operating activities Operating (loss)/profit (3,189) 1,950 (3,490) Gains/(Losses) on investments 4,318 (1,192) 4,407 Financing costs 3 (55) 5 (Increase)/Decrease in receivables (869) (2,207) (704) (Decrease)/Increase in payables (13) (50) (512) Net cash inflow/(outflow) from 250 (1,554) (294) operating activities Investing activities Purchase of investments (49,207) (13,687) (48,939) Sale of investments 41,143 15,691 62,800 Net cash (outflow)/inflow from (8,064) 2,004 13,861 investing activities Financing activities Interest paid on borrowings (3) - (5) Equity dividends paid (1,046) (1,046) (1,395) Net cash (outflow)/inflow from (1,049) (1,046) (1,400) financing (Decrease)/Increase in cash and (8,863) (596) 12,167 cash equivalents Cash and cash equivalents at 15,836 3,669 3,669 start of period Cash and cash equivalents at end 6,973 3,073 15,836 of period Notes to the Group Results Six months ended 31st January 2009 1 Accounting policies The interim report has been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies are consistent with the preceding annual accounts. The results are based on unaudited Group consolidated accounts prepared under the historical cost basis except where IFRS require an alternative treatment. 2 Comparative information The financial information contained in this interim report does not constitute statutory accounts and that relating to the six month periods to 31st January 2009 and 31st January 2008 has not been audited. The financial information for the year ended 31st July 2008 has been extracted from the latest published audited accounts which have been filed with the Registrar of Companies and prepared under IFRS. The report of the auditors on those accounts contained no qualification or statement under Section 237 (2) or (3) of the Companies Act 1985. 3 Significant accounting policies Investments held at fair value through profit or loss are initially recognised at fair value. As the entity's business is investing in financial assets with a view to profiting from their total return in the form of interest dividends or increases in fair value, listed equities and fixed income securities are designated as fair value through profit or loss on initial recognition. The entity manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the group is provided internally on this basis to the entity's key management personnel. After initial recognition, investments, which are classified as at fair value through profit and loss, are measured at fair value. Gains or losses on investments designated as at fair value through profit or loss are included in net profit or loss as a capital item, and material transaction costs on acquisition and disposal of investments are expensed and included in the capital column of the income statement. For investments that are actively traded in organised financial markets, fair value is determined by reference to the Stock Exchange quoted market bid prices or last traded prices, depending upon the convention of the exchange on which the investment is quoted, at the close of business on the balance sheet date. In respect of unquoted investments, or where the market for a financial investment is not active, fair value is established by using an appropriate valuation technique. Where no reliable fair value can be estimated for such unquoted equity instruments, they are carried at cost, subject to any provision for impairment. Investments in subsidiary companies are held at directors' valuation. All purchases and sales of investments are recognised on the trade date i.e. the date that the group commits to purchase or sell an asset. Dividend income from investments is recognised as income when the shareholders' rights to receive payment has been established, normally the ex-dividend date. When special dividends are received, the underlying circumstances are reviewed on a case by case basis in determining whether the amount is capital, or income, or a mixture of both, in nature. Amounts recognized as income will form part of the company's distribution.

Companies

Manchester & London Investment Trust (MNL)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today