Final Results

Merrill Lynch World Mining Tst PLC 14 February 2005 14 February 2005 MERRILL LYNCH WORLD MINING TRUST plc Preliminary announcement of results in respect of the year ended 31 December 2004 Performance to 31 December 2004 12 months 3 years 5 years (with net income reinvested) Undiluted net asset value per share +2.7% +110.8% +121.8% Ordinary share price +2.8% +140.6% +136.8% HSBC Global Mining Index* +4.4% +58.2% +61.8% *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 undiluted net asset value per share at 31 December 2004 was 242.85p (2003: 239.09p). • Increased earnings of 3.01p per share (2003: 1.73p), which includes the benefit of some investment trading. • The directors recommend the payment of an increased final dividend of 1.75p (2003: 1.70p) and have declared a special dividend of 0.75p, both payable on 31 March 2005 to shareholders on the register on 25 February 2005. • Bonus warrants become exercisable on 29 April 2005 at a share price of 219p compared to the price at going to press of 227.50p. The warrant price at this time is 10.50p. For further information please contact: Jonathan Ruck Keene, Managing Director Investment Trusts - 020 7743 2178 Graham Birch, Managing Director Natural Resources - 020 7743 2690 Nigel Webb, Director Media & Communications - 020 7743 5938 Merrill Lynch Investment Managers Or William Clutterbuck The Maitland Consultancy - 020 7379 5151 The Chairman, Peter Wilmot-Sitwell, comments: Commodity markets experienced a strong year in 2004 as the global economy continued to prosper, led in the main by China. In particular, metal prices surged in US dollar terms although the weakness of the currency served to reduce the benefits to sterling investors. Although the pace of economic expansion may well moderate during the year ahead, the outlook for demand growth in the metals and minerals sector continues to be encouraging. Once again China should help lead the way, with commodity prices predicted to strengthen further. We are hopeful that this will lead to the mining sector outperforming global equities generally. Your Company is fully invested to benefit from these conditions. Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch Investment Managers, the Investment Manager, notes: We believe that global economic growth in 2005 will be sufficiently robust to ensure that supply/demand balances in the metals and minerals markets remain favourable with positive implications for prices. If we are right about the pricing environment then many companies in the portfolio will report record earnings and cash flow. Given that balance sheets have already strengthened markedly during 2004 there is every likelihood that these strong cash flows will translate into higher dividends and more share-buybacks. There is also the possibility of additional 'corporate activity' providing further support for the market. We expect China to continue to be a key theme in the commodity markets. Although economists differ widely in their economic growth assumptions for China there is little doubt that its rank in the global economy will continue to increase. While it seems likely that demand growth will moderate from the high levels of recent years it should still be sufficient to support higher commodity prices across a broad front - especially the bulk commodities iron ore and coal. We expect to see a continuation of the uptrend in gold. Mine supply fell 4% in 2004 and is likely to fall further. Meanwhile investment demand is growing and central bank sales are likely to decline. This is a good environment for gold especially if the dollar weakens again and the Federal Reserve keeps rate rises on a slow track. Our portfolio strategy at the start of 2005 is three pronged: 1) Fully invested portfolio. Emphasis on companies with strong cashflow and the potential to lift returns to shareholders through higher dividends and share buybacks. 2) Emphasis on companies producing those commodities in short supply in China i.e. iron ore and coking coal. 3) Tactical investment in commodities. Overall we expect that the mining sector will resume its outperformance against broader global equities after the lull in 2004. CONSOLIDATED REVENUE STATEMENT for the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000 (audited) (audited) Income 12,672 7,657 Investment management fees (3,797) (2,969) Operating expenses (697) (705) ------- ------- Net return before finance costs and taxation 8,178 3,983 Interest payable and similar charges (1,817) (495) ------- ------- Return on ordinary activities before taxation 6,361 3,488 Taxation on ordinary activities (1,462) (672) ------- ------- Return on ordinary activities after taxation 4,899 2,816 Dividends in respect of equity shares (4,070) (2,768) ------- ------- Transfer to reserves 829 48 ==== ==== CONSOLIDATED STATEMENT OF TOTAL RETURN PER ORDINARY SHARE for the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 (audited) (audited) Earnings per ordinary share 3.01p 1.73p Capital return per ordinary share 3.25p 89.58p --------- --------- Total return per ordinary share 6.26p 91.31p ===== ===== --------- --------- Dividend per ordinary share 1.75p 1.70p ===== ===== Special dividend per ordinary share 0.75p - ===== ===== SUMMARISED CONSOLIDATED BALANCE SHEET as at 31 December 2004 31 December 31 December 2004 2003 £'000 £'000 (audited) (audited) Fixed assets Listed investments at mid-market valuation 414,349 419,488 Unlisted investments at directors' valuation 3,769 4,042 ---------- ---------- 418,118 423,530 ---------- ---------- Current assets Investments of subsidiary undertakings 4,886 3,513 Debtors 2,145 1,254 ---------- ---------- 7,031 4,767 Creditors - amounts falling due within one year (29,707) (39,043) ---------- ---------- Net current liabilities (22,676) (34,276) ---------- ---------- Total assets less current liabilities 395,442 389,254 Provision for liabilities and charges (85) (10) ---------- ---------- Net assets 395,357 389,244 ====== ====== Capital and reserves Share capital 8,140 8,140 Capital redemption reserve 22,779 22,779 Other capital reserves 154,776 149,492 ---------- ---------- 185,695 180,411 Special reserve 203,244 203,244 Revenue reserve 6,418 5,589 ---------- ---------- Total equity shareholders' funds 395,357 389,244 ====== ====== Net asset value per ordinary share - undiluted 242.85p 239.09p ====== ====== Net asset value per ordinary share - diluted 238.87p - ====== ====== SUMMARISED CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 (audited) (audited) Net cash flow from operating activities 7,824 2,519 Returns on investments and servicing of finance: Interest paid on overdraft facility (1,817) (495) Taxation paid (261) (1,122) Capital expenditure and financial investment: Purchase of fixed asset investments (121,186) (127,945) Proceeds from the sale of fixed asset investments 131,609 90,006 Exchange (loss)/gain on foreign currency transactions (46) 1,035 --------- --------- Net cash inflow/(outflow) from capital expenditure and financial investment 10,377 (36,904) --------- --------- Equity dividends paid (2,768) (3,419) --------- --------- Cash inflow/(outflow) before financing 13,355 (39,421) --------- --------- Financing: Warrant issue costs (305) - --------- --------- Net cash outflow from financing (305) - --------- --------- Increase/(decrease) in cash in the period 13,050 (39,421) ===== ===== RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 December 31 December 2004 2003 (audited) (audited) Net return before finance costs and taxation 8,178 3,983 Net sales/(purchases) of investments by subsidiary undertakings 2,131 (1,035) (Increase)/decrease in debtors (382) 11 Increase in creditors 2,013 525 Tax on investment income included within gross income (612) (464) Profit on investments by subsidiary undertakings (3,504) (501) ------- ------- Net cash flow from operating activities 7,824 2,519 ==== ==== 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 2004. 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 2004 2003 £'000 £'000 (audited) (audited) Income from investments: Dividends: UK listed 1,446 1,232 Overseas listed 7,367 5,836 -------- -------- 8,813 7,068 -------- -------- Interest receivable and other income: Deposit interest and other income 355 88 Profit on investments by subsidiary undertakings 3,504 501 -------- -------- 3,859 589 -------- -------- Total income 12,672 7,657 ===== ===== 4. Dividend The directors are recommending a final dividend of 1.75p per share (2003: final dividend of 1.70p per share) and have declared a special dividend of 0.75p per share. The dividends will be paid on 31 March 2005 to the shareholders on the register of members at the close of business on 25 February 2005. The shares will be quoted ex-dividend on 23 February 2005. 5. Investment management fees Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000 (audited) (audited) Investment management fees 3,631 2,821 Irrecoverable VAT thereon 166 148 ------- ------- 3,797 2,969 ==== ==== 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 Year ended Year ended 31 December 31 December 2004 2003 £'000 £'000 (audited) (audited) Custody fee 209 297 Administration fee 225 174 Auditor's remuneration: - audit services 17 17 - non-audit services (interim review and taxation compliance) 14 14 Registrar's fee 40 23 Directors' emoluments 74 70 Charitable donation - 5 Other administrative costs 118 105 ----- ----- 697 705 === === 7. Ordinary shares 31 December 31 December 2004 2003 The number of ordinary shares in issue during and at the end of the period on which the net asset value per ordinary share was calculated was: 162,800,000 162,800,000 The number of warrants in issue at the end of the period was: 32,559,564 - Share price 218.00p 217.00p 8. Gearing ratio. As at 31 December 2004 the ratio of borrowings to net assets was 6.0% (2003: 8.8%). 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 2003, which have been filed with the Registrar of Companies. The report of the auditor for the years ended 31 December 2003 and 2004 contain no qualification or statement under section 237(2) or (3) of the Companies Act 1985. The 2004 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 Thursday 17 March 2005 at 2.30pm. 14 February 2005 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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