Final Results
Merrill Lynch World Mining Tst PLC
5 February 2001
FOR IMMEDIATE RELEASE 5 February 2001
MERRILL LYNCH WORLD MINING TRUST plc
Preliminary announcement of results in respect of the year ended 31 December
2000
* The Company changed its name from Mercury World Mining Trust plc to
Merrill Lynch World Mining Trust plc on 29 December 2000.
Over the year to 31 December 2000 the Company has outperformed its benchmark,
albeit in a falling market.
Performance to 31 December 12 months (with net income 12 months (capital
2000 reinvested) only)
Net asset value -5.3% -7.5%
Ordinary share price -7.9% -9.2%
HSBC Global Mining Index* N/A -10.6%
*adjusted for exchange rates relative to sterling.
Performance based on mid-market values with net income reinvested on
ex-dividend date.
Source: Merrill Lynch Investment Managers, Datastream.
* Revenue for the year, after tax, was 1.63p per share, compared with
1.00p per share in 1999.
* The Board has declared a final dividend for the year of 1.30p per share
(1999, 1.20p per share).
For further information please contact:
Dr Graham Birch - 020 7743 2690
Ian Barby - 020 7743 5224
Mark Johnson - 020 7743 2300
Merrill Lynch Investment Managers
The Chairman, Peter Wilmot-Sitwell, comments:
'After an excellent 1999, the year 2000 proved to be a volatile period for
mining equities, as they succumbed to doubts about continued global economic
growth. The net outcome was a disappointing fall of 11% for the sector.
Against this difficult background, I am glad to say the Company has
outperformed, with its net asset value per share and its share price declining
by only 5% and 8% respectively.
'As you will know, a resolution for the continuation of the Company is put to
shareholders at each Annual General Meeting, and we hope you will again vote
in favour of this proposal. This Company is one of the few vehicles which
enable investors to obtain a diversified exposure to the mining sector and
thereby performs an important function.
'Lord Vinson, who has been a director of the Company since its launch in 1993,
will be retiring from the Board at the forthcoming Annual General Meeting and
we offer him our thanks for his valuable contribution to the development of
the Company.
'As soon as is practicable after the AGM, your Board will seek to appoint
another director.'
Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch
Investment Managers, the Investment Manager, notes:
'We expect the early part of 2001 to be the weakest for metals as the adverse
cyclical effects of a cooling US economy are seen in the global markets.
Thereafter, the supply side discipline we have already seen should be a
supportive factor and metal shortages should re-emerge, especially in
aluminium and copper. The low level of inventories in LME warehouses implies
that if these shortages do occur, they will quickly translate into market
tightness and upward price pressure may be evident under such a scenario.
'Most base metals and diversified mining shares de-rated during 2000 and are
now trading on even more attractive P/E ratios and yields than at the same
stage last year. The good earnings transparency and solid asset value present
in the sector are attractive features and the scope for further de-rating
seems limited. Although high absolute returns may again prove elusive, the
Company's portfolio is well positioned to achieve respectable performance in
comparison with the broad equity markets.'
CONSOLIDATED REVENUE STATEMENT for the year ended 31 December 2000
Year ended Year ended
31 December 31 December
2000 1999
£'000 £'000
(audited) (audited)
(restated)
Note
Income 4 7,970 6,430
Less:
Investment management fees 6 (1,918) (2,147)
Operating expenses 7 (504) (560)
------- -------
Net return before finance costs and taxation 5,548 3,723
Finance costs (1,550) (1,027)
------- -------
Revenue on ordinary activities before taxation 3,998 2,696
Taxation (1,059) (458)
------- -------
Revenue on ordinary activities after taxation 2,939 2,238
Dividend 5 (2,198) (2,218)
------- -------
Transfer to revenue reserve 741 20
==== ====
CONSOLIDATED STATEMENT OF TOTAL RETURN PER ORDINARY SHARE
for the year ended 31 December 2000
Year ended Year ended
31 December 31 December
2000 1999
(audited) (audited)
Calculated on weighted average shares:
Earnings per ordinary share 1.63p 1.00p
Capital return per ordinary share (10.33p) 51.02p
--------- --------
Total return per ordinary share (8.70p) 52.02p
===== =====
Calculated on period end shares:
Earnings per ordinary share 1.73p 1.17p
Capital return per ordinary share (10.94p) 60.11p
--------- --------
Total return per ordinary share (9.21p) 61.28p
===== =====
Dividend per ordinary share 1.30p 1.20p
===== =====
SUMMARISED CONSOLIDATED BALANCE SHEET
as at 31 December 2000
31 December 31 December
2000 1999
£'000 £'000
(audited) (audited)
Fixed assets
Investments at valuation 202,114 249,412
---------- ----------
Current assets
Investments of subsidiary undertakings 2,926 1,880
Debtors 893 359
------- -------
3,819 2,239
------- -------
Creditors - amounts falling due within one year
Bank overdraft 15,439 24,918
Other creditors 4,406 3,307
-------- --------
19,845 28,225
-------- --------
Net current liabilities (16,026) (25,986)
--------- ---------
Total assets less current liabilities 186,088 223,426
Provision for liabilities and charges 66 29
--------- ---------
Net assets 186,022 223,397
====== ======
Capital and reserves
Share capital 8,505 9,548
Capital redemption reserve 22,414 21,371
Other capital reserves (58,933) (40,319)
--------- ---------
(28,014) (9,400)
Special reserve 210,472 229,974
Revenue reserve 3,564 2,823
--------- ---------
Total equity shareholders' funds 186,022 223,397
====== ======
Net asset value per ordinary share 109.36p 116.99p
====== ======
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2000
Year ended Year ended
31 December 31 December
2000 1999
(audited) (audited)
Net cash inflow from operating activities 3,790 1,672
Returns on investment and servicing of
finance (1,550) (1,027)
Taxation refunded 17 938
Capital expenditure and financial investment:
Purchase of fixed asset investments (109,184) (66,815)
Proceeds from the sale of fixed asset
investments 138,111 155,996
Exchange movements on foreign currency
transactions 15 (295)
Equity dividends paid (2,218) (5,010)
Buy-back of ordinary shares (19,502) (121,682)
Continuation and share tender costs - (690)
--------- ----------
Increase/(decrease) in cash 9,479 (36,913)
===== ======
RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES
Year ended Year ended
31 December 31 December
2000 1999
(audited) (audited)
(restated)
Operating profit 5,548 3,723
Net purchases of investments by subsidiary
undertakings (299) (1,588)
(Increase)/decrease in debtors (110) 548
(Decrease)/increase in creditors (67) 48
Tax on investment income included within
gross income (709) (767)
Profit on investment dealing by subsidiary
undertakings (573) (292)
------- ------
Net cash inflow from operating activities 3,790 1,672
==== ====
NOTES ON THE PRELIMINARY RESULTS
1. Principal activity
The principal activity of the Company is that of an investment trust within
the meaning of section 842 of the Income and Corporation Taxes Act 1988.
The principal activity of its two subsidiary undertakings is investment
dealing.
2. Basis of preparation
The preliminary financial statements have been prepared on the basis of the
accounting policies set out in the Company's financial statements at 31
December 2000. Income and operating expenses have been accrued in accordance
with the same principles used in the preparation of the previous year's
financial statements, subject to note 3 below.
3. Taxation
The financial information contained in this preliminary statement follows the
requirements of Financial Reporting Standard (FRS) 16 'Current Tax' to show
franked investment income net of related tax credits. In addition, 'avoir
fiscal' on French dividends is now classed as a tax credit and not a
withholding tax and as such reduces the tax charge rather than increasing
income. The figures for income and taxation in respect of prior periods have
been restated accordingly. These changes have no effect on the net income or
net assets previously reported for those periods.
4. Income Year ended Year ended
31 December 31 December
2000 1999
£'000 £'000
(audited) (audited)
(restated)
Income from investments:
UK listed 626 402
Overseas listed 6,769 5,665
------- -------
7,395 6,067
------- -------
Interest received and other income:
Deposit interest - 69
Profit on investment dealing by subsidiary
undertakings 573 292
Other income 2 2
------- -------
575 363
------- -------
Total 7,970 6,430
==== ====
5. Dividend
The directors have declared a final dividend of 1.30p per share (1999: 1.20p).
The dividend will be paid on 23 April 2001 to shareholders on the register of
members at the close of business on 16 February 2001. The shares will be
quoted ex-dividend on 14 February 2001.
6. Investment management fees Year ended Year ended
31 December 31 December
2000 1999
£'000 £'000
(audited) (audited)
Investment management fees 1,848 2,056
Irrecoverable VAT thereon 70 91
------- -------
1,918 2,147
==== ====
All investment management fees are charged to revenue.
7. Operating expenses £'000 £'000
(audited) (audited)
Custody fee 194 207
Administration fee 114 122
Directors' emoluments 62 58
Registrars' fee and other administrative
expenses 134 173
----- -----
504 560
=== ===
8. Ordinary shares
31 December 31 December
2000 1999
The weighted number of ordinary shares in
issue during each period, on which the return
per ordinary share was calculated, was: 180,199,129 224,955,622
The number of ordinary shares in issue at the
end of the period was: 170,099,852 190,949,852
Share price 91.50p 100.75p
9. Gearing ratio - % of NAV.
As at 31 December 2000 the ratio of borrowings to net assets was 8.3%
(31.12.1999 : 11.2%).
10. Publication of non-statutory accounts
The financial information contained in this preliminary statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985
11. The figures set out above have been reported upon by the auditors. The
comparative figures are extracts from the audited financial statements of
Merrill Lynch World Mining Trust plc for the year ended 31 December 1999,
which have been filed with the Registrar of Companies. The report of the
auditors for the years ended 31 December 1999 and 2000 contain no
qualification or statement under section 237(2) or (3) of the Companies Act
1985.
The 2000 annual report will be filed with the Registrar of Companies after the
Annual General Meeting.
12. Copies of the annual report will be sent to members shortly and will be
available from the registered office, c/o The Company Secretary, Merrill Lynch
World Mining Trust plc, 33 King William Street, London EC4R 9AS. This report
will also be available on the Merrill Lynch Investment Manager's website at
www.mlim.co.uk/its
13. The Annual General Meeting of the Company will be held at Merchant
Taylors' Hall, 30 Threadneedle Street, London EC2 on Wednesday 21 March 2001
at 2.30pm.
5 February 2001
33 King William Street
London EC4R 9AS