Final Results

Merrill Lynch World Mining Tst PLC 05 February 2003 FOR IMMEDIATE RELEASE 5 February 2003 MERRILL LYNCH WORLD MINING TRUST plc Preliminary announcement of results in respect of the year ended 31 December 2002 • The Company was one of the best performing investment trusts in 2002 and it received 'The Specialist Investment Trust of the Year' award from both Investment Week and Investment Trusts magazines. Performance to 31 December 2002 12 months 3 years 5 years (with net income reinvested) Net asset value per share +27.4% +34.0% +119.4% Ordinary share price +40.1% +37.9% +145.9% HSBC Global Mining Index* -3.6% -6.8% +33.4% MSCI World Index -27.6% -42.1% -8.2% *capital only, 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. • The net asset value per share at 31 December 2002 was 149.48p. • The overweighting of gold mining company shares in the portfolio continued to be a substantial contributor to the material outperformance against benchmark. • Earnings of 2.52p per share were less than last year's high level of 3.82p per share (which was due to that year's exceptional level of income from the platinum companies in the portfolio) but, nonetheless, are higher than in previous years. The directors recommend the payment of an increased final dividend of 1.60p per share and have declared a special dividend of 0.50p per share, both payable on 23 April 2003 to those shareholders on the register on 14 February 2003. For further information please contact: Ian Barby - 020 7743 5224 - 020 7743 2690 Graham Birch - 020 7743 5938 Nigel Webb Merrill Lynch Investment Managers or William Clutterbuck The Maitland Consultancy - 020 7379 5151 The Chairman, Peter Wilmot-Sitwell, comments: '2002 was a successful year for the Company, and it was one of the best performing investment trusts over the period. In this context, we were particularly pleased to receive 'The Specialist Investment Trust of the Year' award from both Investment Week and Investment Trusts magazines. In the twelve months to 31 December 2002, the Company's net asset value per share increased by 27.4% (in sterling terms and with net income reinvested), ending 2002 at 149.48p. This compares with a 3.6% fall in its benchmark index (capital only) and a 27.6% fall in world equities, as measured by the MSCI World Index (with net income reinvested). The overweighting of gold mining company shares in the portfolio continued to be a substantial contributor to the material outperformance against benchmark. 'Shareholders have the opportunity to vote on the continuation of the Company at each Annual General Meeting. Given the success of this year's activity, and our belief that the Company is well placed to outperform broader equity markets again in 2003, we hope that you will vote in favour of this proposal. Also, your Company still remains one of the very few ways in which investors can gain exposure to a diversified mining portfolio. 'It is the Company's policy for directors to retire at the first Annual General Meeting ('AGM') after they reach the age of 70, and generally not seek re-election. Lionel Stopford Sackville, who has been a director of the Company and Chairman of the Audit and Management Engagement Committee since its launch in 1993, will be retiring from the Board at the forthcoming AGM, having attained this age. We thank him for his valuable contribution to the Company.' Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch Investment Managers, the Investment Manager, notes: 'The global stockmarket remains in a state of shock following three consecutive years of falling share prices. As we stated in the interim report, sentiment is going to take a long time to recover, and we believe that investors will continue to focus on sectors with transparent business activities and good cash generative characteristics. Not only does the mining sector fit this profile, but it is also a cyclical sector that can benefit from the eventual rebound in economic activity, whenever this occurs. 'With so much economic and political turmoil evident, gold might again enjoy favourable pricing conditions. If this proves to be the case then the Company's gold share portfolio could provide more good returns. 'Overall, we believe that the mining sector is poised to continue its outperformance against the broader world equity markets.' CONSOLIDATED REVENUE STATEMENT for the year ended 31 December 2002 Year ended Year ended 31 December 31 December 2002 2001 £'000 £'000 (audited) (audited) Income 8,484 11,650 Investment management fees (2,278) (1,938) Operating expenses (586) (494) ------- ------- Net revenue before finance costs and taxation 5,620 9,218 Interest payable and similar charges (329) (383) ------- ------- Revenue on ordinary activities before taxation 5,291 8,835 Taxation on ordinary activities (1,181) (2,401) ------- ------- Revenue on ordinary activities after taxation 4,110 6,434 Dividends in respect of equity shares (3,419) (5,148) ------- ------- Transfer to revenue reserve 691 1,286 ==== ==== CONSOLIDATED STATEMENT OF TOTAL RETURN PER ORDINARY SHARE for the year ended 31 December 2002 Year ended Year ended 31 December 31 December 2002 2001 (audited) (audited) Calculated on weighted average shares: Earnings per ordinary share 2.52p 3.82p Capital return per ordinary share 30.28p 7.85p --------- --------- Total return per ordinary share 32.80p 11.67p ===== ===== Calculated on actual shares: Earnings per ordinary share 2.52p 3.87p Capital return per ordinary share 30.33p 7.95p --------- --------- Total return per ordinary share 32.85p 11.82p ===== ===== Final dividend per ordinary share 1.60p 1.45p Special dividend per ordinary share 0.50p 1.70p --------- --------- Total dividend per ordinary share 2.10p 3.15p ===== ===== SUMMARISED CONSOLIDATED BALANCE SHEET as at 31 December 2002 31 December 31 December 2002 2001 £'000 £'000 (audited) (audited) Fixed assets Listed investments at mid-market valuation 239,830 191,619 Unlisted investments at directors' valuation - 695 ---------- ---------- 239,830 192,314 ---------- ---------- Current assets Investments of subsidiary undertakings 2,131 2,002 Debtors 164 8,659 Cash 6,569 9,850 ---------- ---------- 8,864 20,511 Creditors - amounts falling due within one year (5,327) (15,972) ---------- ---------- Net current assets 3,537 4,539 ---------- ---------- Total assets less current liabilities 243,367 196,853 Provision for liabilities and charges (17) (127) ---------- ---------- Net assets 243,350 196,726 ====== ====== Capital and reserves Share capital 8,140 8,302 Capital redemption reserve 22,779 22,617 Other capital reserves 3,646 (45,729) ---------- ---------- 34,565 (14,810) Special reserve 203,244 206,686 Revenue reserve 5,541 4,850 ---------- ---------- Total equity shareholders' funds 243,350 196,726 ====== ====== Net asset value per ordinary share 149.48p 118.48p ====== ====== SUMMARISED CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2002 Year ended Year ended 31 December 31 December 2002 2001 (audited) (audited) Net cash flow from operating activities 5,503 9,520 Returns on investment and servicing of finance: Interest paid on overdraft facility (329) (383) Taxation paid (1,347) (1,002) Capital expenditure and financial investment: Purchase of fixed asset investments (84,921) (81,508) Proceeds from the sale of fixed asset investments 86,558 104,914 Exchange loss on foreign currency transactions (154) (269) Equity dividends paid (5,149) (2,197) Purchase of ordinary shares (3,442) (3,786) --------- --------- (Decrease)/increase in cash in the period (3,281) 25,289 ===== ===== RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 December 31 December 2002 2001 (audited) (audited) Net return before finance costs and taxation 5,620 9,218 Net sales of investments by subsidiary undertakings 1,230 1,605 Decrease/(increase) in debtors 259 (159) Increase/(decrease) in creditors 106 (142) Tax on investment income included within gross income (271) (466) Profit on investments by subsidiary undertakings (1,441) (536) ------- ------- Net cash flow from operating activities 5,503 9,520 ==== ==== NOTES TO THE PRELIMINARY RESULTS 1. Principal activity The principal activity of the Company is that of an investment trust company within the meaning of section 842 of the Income and Corporation Taxes Act 1988. The principal activity of its two subsidiary undertakings, Merrill Lynch Gold Limited and World Mining Investment Company Limited, 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 2002. Income and operating expenses have been accrued in accordance with the same principles used in the preparation of the previous year's financial statements. The taxation charge has been calculated by applying an estimate of the annual effective tax rate to the profit for the period. 3. Income Year ended Year ended 31 December 31 December 2002 2001 £'000 £'000 (audited) (audited) Income from investments: Dividends: UK listed 810 752 Overseas listed 6,118 10,244 -------- -------- 6,928 10,996 -------- -------- Interest receivable and other income: Deposit interest and other income 115 118 Profit on investments by subsidiary undertakings 1,441 536 -------- -------- 1,556 654 -------- -------- Total income 8,484 11,650 ===== ===== 4. Dividend The directors are recommending an increased final dividend of 1.60p per share and have declared a special dividend of 0.50p per share (2001: final dividend of 1.45p per share plus a special dividend of 1.70p per share). The dividends will be paid on 23 April 2003 at the close of business on 14 February 2003. The shares will be quoted ex-dividend on 12 February 2003. 5. Investment management fees Year ended Year ended 31 December 31 December 2002 2001 £'000 £'000 (audited) (audited) Investment management fees 2,243 1,850 Irrecoverable VAT thereon 35 88 ------- ------- 2,278 1,938 ==== ==== The investment management fee is levied quarterly, based on the gross assets on the last day of the quarter. All investment management fees are charged to revenue. 6. Operating expenses £'000 £'000 (audited) (audited) Custody fee 236 195 Administration fee 139 114 Auditor's remuneration: - audit services 17 17 - non-audit services (interim review and taxation compliance) 14 14 Registrar's fee 24 22 Directors' emoluments 73 56 Other administrative costs 83 76 ----- ----- 586 494 === === 7. Ordinary shares 31 December 31 December 2002 2001 The weighted average number of ordinary shares in issue during each period, on which the return per ordinary share was calculated, was: 163,068,062 168,244,008 The actual number of ordinary shares in issue at the end of the period on which the net asset value per ordinary share was calculated was: 162,800,000 166,045,461 Share price 131.75p 96.50p 8. Gearing ratio. As at 31 December 2002 the ratio of borrowings to net assets was nil (31.12.2001 : nil). 9. 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. 10. The figures set out above have been reported upon by the auditor. The comparative figures are extracts from the audited financial statements of Merrill Lynch World Mining Trust plc for the year ended 31 December 2001, which have been filed with the Registrar of Companies. The report of the auditor for the years ended 31 December 2001 and 2002 contain no qualification or statement under section 237 (2) or (3) of the Companies Act 1985. The 2002 annual report will be filed with the Registrar of Companies after the Annual General Meeting. 11. 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 12. The Annual General Meeting of the Company will be held at 33 King William Street, London EC4R 9AS on Wednesday 19 March 2003 at 2.30pm. 5 February 2003 33 King William Street London EC4R 9AS This information is provided by RNS The company news service from the London Stock Exchange
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