Interim Results

Brunner Investment Trust PLC 12 July 2006 For immediate release 12 July 2006 THE BRUNNER INVESTMENT TRUST PLC ANNOUNCEMENT OF INTERIM RESULTS For the six months ended 31 May 2006 Highlights • Earnings per ordinary share of 6.05p, up 29.6%. • Net Asset Value per ordinary share of 470.8p, up 4.2% in the period, versus 3.4% for the benchmark index. • Dividend per share 4.0p. Interim Results The Trust outperformed its benchmark in the first half of its financial year with the Net Asset Value increasing by 4.2% compared with an increase in the composite benchmark of 3.4%. Net Asset Value A summary of the results for the six months ended 31 May 2006 is set out below. The Net Asset Value attributable to each Ordinary Share at 31 May 2006 was 470.8p. This compares with 451.7p at 30 November 2005, an increase of 4.2% over the period. The capital return on the benchmark index (60% FTSE All-Share, 40% FTSE World Index- £) was 3.4% over the period. Earnings Earnings in the six months to 31 May 2006 were 6.05p per Ordinary Share (2005: 4.67p). Interim Dividend The Board has declared an interim dividend of 4.0p net (2005: 3.6p) per Ordinary Share payable on 24 August 2006 to holders on the Register of Members at the close of business on 28 July 2006. Share Buy Backs During the period under review the Company purchased 893,500 Ordinary Shares for cancellation. In the period since 31 May 2006, a further 62,500 Ordinary Shares have been purchased for cancellation. Investment Review The first half of the financial year was set against a backdrop of increasing volatility within global equity markets and latterly a period of profit-taking as investors shifted their focus towards more defensive sectors. Adverse inflation data in the US triggered the initial weakness in May, before a series of global sell-offs became self sustaining as investors reflected on concerns that inflation was more of a threat than many commentators had previously thought. In May, the US Fed raised interest rates for a sixteenth consecutive time - a move which had been widely anticipated but which was accompanied by the comment that 'further policy firming may yet be needed to address inflation risks'. Subsequently, in June, the Federal Open Market Committee raised its target for the Federal Funds Rate by a further 25 basis points to 5.25%. Recovery in Europe remains on track and the European Central Bank, having raised its benchmark interest rate for the first time in five years in December, raised the rate a further 0.25% to 2.5% in March, as an improving economic sentiment survey indicated positive growth momentum. In Germany, the IFO Business Climate Index fell in May, although this was after having risen continuously for the 5 previous months. In France, consumer spending remained strong despite weak consumer confidence data and a subdued job market. In the UK, economic growth is currently at the lower range of trend growth, suggesting spare capacity has not been fully utilised. Nonetheless expectations are for a further modest rise in interest rates later this year. Consumer spending remains on an improving trend, with the Confederation of British Industry noting its gauge of retail sales for April was at its highest level since February 2005. In Japan, the economy remains on an improving trend, although monetary policy tightening has contributed to disappointing returns from Japanese equities this year. Elsewhere in the Far East, continuing growth in China and intra-regional trade has underpinned company profits in the region. In this period, performance came from a diversified selection of stocks with significant contributions from Man Group, the UK hedge fund group, which increased by 32%, and Hong Kong Exchange, the operator of the main financial exchange in Hong Kong, which was up by 74%. Vallourec, a French steel producer specialising in the supply of piping for use in the oil sector, and Atlas Copco, in the Industrials sector, were also strong performers. Shares in the mining companies, Rio Tinto and BHP Billiton, also contributed to the performance, despite profit-taking towards the end of the period. On a less positive note, Carnival was disappointing with difficult trading and high oil prices affecting sentiment. This holding has now been sold. Outlook Given the prevailing market environment we continue to monitor closely the risks inherent within the portfolio, which remains diversified across major sectors and regions. Despite recent market movements, we believe that we remain in an environment where equities in general remain reasonably valued and that inflationary concerns are unlikely to prompt a disproportionate and potentially destabilising increase in interest rates. Whilst we expect that volatility will remain within markets in the near term, and that we will see some further modest tightening of monetary policy in most regions, equities have the capacity to deliver another positive year for investors in 2006. Keith Percy Chairman Enquiries: For further information, please contact: RCM (UK) Limited Simon White Head of Investment Trusts Tel: 020 7065 1539 SUMMARY OF UNAUDITED RESULTS INCOME STATEMENT for the six months ended 31 May 2006 Revenue Capital Total £'000s £'000s £'000s (Note 2) Net gains on investments at fair value - 10,648 10,648 Income from Investments 4,020 - 4,020 Other Income 397 - 397 Investment management fee (230) (537) (767) Expenses of administration (199) (7) (206) Net Return before finance costs and taxation 3,988 10,104 14,092 Finance costs: interest payable and similar charges (714) (1,601) (2,315) Return on ordinary activities before taxation 3,274 8,503 11,777 Taxation Overseas taxation (117) - (117) UK taxation (163) 163 - Return attributable to Ordinary Shareholders 2,994 8,666 11,660 Return per Ordinary Share (Note 1) (basic and diluted) 6.05p 17.51p 23.56p BALANCE SHEET as at 31 May 2006 £'000s Investments held at fair value through profit or loss 273,023 Net Current Assets 10,124 Total Assets less Current Liabilities 283,147 Creditors-Amounts falling due after one year (52,115) Total Net Assets 231,032 Called Up Share Capital 12,267 Capital Redemption Reserve 3,733 Capital Reserves: Realised 172,129 Unrealised 32,066 Revenue Reserve 10,837 Shareholders' Funds 231,032 Net Asset Value per Ordinary Share 470.8p The net asset value is based on 49,069,338 Ordinary Shares in issue SUMMARY OF UNAUDITED RESULTS INCOME STATEMENT for the six months ended 31 May 2005 Revenue Capital Total (restated) (restated) (restated) £'000s £'000s £'000s (Note 2) Net gains on investments at fair value - 11,484 11,484 Income from Investments 3,472 - 3,472 Other Income 402 - 402 Investment management fee (197) (458) (655) Expenses of administration (210) - (210) Net Return before finance costs and taxation 3,467 11,026 14,493 Finance costs: interest payable and similar charges (707) (1,598) (2,305) Return on ordinary activities before taxation 2,760 9,428 12,188 Taxation Overseas taxation (133) - (133) UK taxation (190) 190 - Return attributable to Ordinary Shareholders 2,437 9,618 12,055 Return per Ordinary Share (Note 1) (basic and diluted) 4.67p 18.44p 23.11p BALANCE SHEET as at 31 May 2005 £'000s (restated) Investments held at fair value through profit or loss 236,336 Net Current Assets 16,477 Total Assets less Current Liabilities 252,813 Creditors-Amounts falling due after one year (52,180) Total Net Assets 200,633 Called Up Share Capital 12,912 Capital Redemption Reserve 3,088 Capital Reserves: Realised 160,736 Unrealised 13,959 Revenue Reserve 9,938 Shareholders' Funds 200,633 Net Asset Value per Ordinary Share 388.0p The net asset value is based on 51,708,416 Ordinary Shares in issue SUMMARY OF UNAUDITED RESULTS INCOME STATEMENT for the year ended 30 November 2005 Revenue Capital Total (restated) (restated) (restated) £'000s £'000s £'000s (Note 2) Net gains on investments at fair value - 43,599 43,599 Income from Investments 6,566 - 6,566 Other Income 801 - 801 Investment management fee (410) (956) (1,366) Expenses of administration (301) (16) (317) Net Return before finance costs and taxation 6,656 42,627 49,283 Finance costs: interest payable and similar charges (1,419) (3,203) (4,622) Return on ordinary activities before taxation 5,237 39,424 44,661 Taxation Overseas taxation (217) - (217) UK taxation (289) 289 - Return attributable to Ordinary Shareholders 4,731 39,713 44,444 Return per Ordinary Share (Note 1) (basic and diluted) 9.21p 77.36p 86.57p BALANCE SHEET as at 30 November 2005 £'000s (restated) Investments held at fair value through profit or loss 260,383 Net Current Assets 17,463 Total Assets less Current Liabilities 277,846 Creditors-Amounts falling due after one year (52,147) Total Net Assets 225,699 Called Up Share Capital 12,491 Capital Redemption Reserve 3,509 Capital Reserves: Realised 164,055 Unrealised 35,226 Revenue Reserve 10,418 Shareholders' Funds 225,699 Net Asset Value per Ordinary Share 451.7p The net asset value is based on 49,962,838 Ordinary Shares in issue RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the six months ended 31 May 2006 Called Up Preference Capital Capital Capital Revenue Total Share Share Redemption Reserve Reserve Reserve Capital Capital Reserve Realised Unrealised £'000s £'000s £'000s £'000s £'000s £'000s £'000s Six months ended 31 May 2006 Net Assets at 30 November 2005 as previously stated 12,491 450 3,509 164,055 35,226 7,820 223,551 Reclassification of 5% Cumulative Preference Stock as a long term creditor - (450) - - - - (450) Dividends on Ordinary Shares not recognised as a current liability - - - - - 2,598 2,598 Net Assets at 30 November 2005 (restated) 12,491 - 3,509 164,055 35,226 10,418 225,699 Adjustment to record investments at bid value - - - - (216) - (216) Revenue Return - - - - - 2,994 2,994 Shares repurchased during the period (224) - 224 (3,536) - - (3,536) Dividends on Ordinary Shares - - - - - (2,575) (2,575) Capital Return - - - 11,610 (2,944) - 8,666 Net Assets at 31 May 2006 12,267 - 3,733 172,129 32,066 10,837 231,032 Six months ended 31 May 2005 Net Assets at 30 November 2004 as previously stated 13,102 450 2,898 159,387 7,931 7,497 191,265 Reclassification of 5% Cumulative Preference Stock as a long term creditor - (450) - - - - (450) Dividends on Ordinary Shares not recognised as a current liability - - - - - 2,411 2,411 Net Assets at 30 November 2004 (restated) 13,102 - 2,898 159,387 7,931 9,908 193,226 Revenue Return - - - - - 2,437 2,437 Shares repurchased during the period (190) - 190 (2,241) - - (2,241) Dividends on Ordinary Shares - - - - - (2,407) (2,407) Capital Return - - - 3,590 6,028 - 9,618 Net Assets at 31 May 2005 12,912 - 3,088 160,736 13,959 9,938 200,633 (restated) RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 30 November 2005 Continued Called Up Preference Capital Capital Capital Revenue Total Share Share Redemption Reserve Reserve Reserve Capital Capital Reserve Realised Unrealised £'000s £'000s £'000s £'000s £'000s £'000s £'000s Year ended 30 November 2005 Net Assets at 30 November 2004 as previously stated 13,102 450 2,898 159,387 7,931 7,497 191,265 Reclassification of 5% Cumulative Preference Stock as a long term creditor - (450) - - - - (450) Dividends on Ordinary Shares not recognised as a current liability - - - - - (4,221) (4,221) Net Assets at 30 November 2004 (restated) 13,102 - 2,898 159,387 7,931 9,908 193,226 Revenue Return - - - - - 4,731 4,731 Shares repurchased during the period (611) - 611 (7,750) - - (7,750) Dividends on Ordinary Shares - - - - - (4,221) (4,221) Capital Return - - - 12,418 27,295 - 39,713 Net Assets at 30 November 12,491 - 3,509 164,055 35,226 10,418 225,699 2005 (restated) SUMMARY OF UNAUDITED RESULTS CASH FLOW STATEMENT Six Months to Six Months to Year to 31 May 31 May 30 November 2006 2005 2005 £'000s £'000s £'000s Net cash inflow from operating activities 2,973 2,823 6,037 Servicing of finance Interest paid (2,336) (2,326) (4,663) Dividends paid on Preference Stock (11) (11) (23) Net cash outflow from servicing of finance (2,347) (2,337) (4,686) Financial investment Purchases of fixed asset investments (83,882) (78,663) (181,836) Sales of fixed asset investments 83,909 76,566 189,667 Net cash inflow (outflow) from investing activities 27 (2,097) 7,831 Equity dividends paid (2,575) (2,407) (4,221) Net cash inflow (outflow) before financing (1,922) (4,018) 4,961 Financing Purchase of Ordinary Shares for cancellation and (3,536) (2,241) (7,750) held in treasury Decrease in cash (5,458) (6,259) (2,789) BRUNNER INVESTMENT TRUST plc TOP 20 HOLDINGS AS AT 31 MAY 2006 Valuation % of 31 May 2006 Total Principal Activities £'000s Assets* Treasury Stock 4.5% 07/03/2007 24,956 8.81 UK Government Bond GlaxoSmithKline 11,275 3.98 Pharmaceuticals BP 11,235 3.97 Oil and Gas Royal Dutch Shell 'B' shares 10,631 3.75 Oil and Gas HSBC 7,470 2.64 Banking Rio Tinto 6,014 2.12 Mining BHP Billiton 5,816 2.05 Mining Vodafone 5,676 2.00 Mobile Telecommunication Royal Bank of Scotland 5,655 2.00 Banking Barclays 5,335 1.88 Banking HBOS 5,056 1.79 Banking BG 4,029 1.42 Oil & Gas BAE Systems 3,945 1.39 Aerospace and Defence Xstrata 3,823 1.35 Mining Sage 3,783 1.34 Software & Computer Services Cobham 3,726 1.32 Aerospace and Defence Spectris 3,561 1.26 Electronic & Electrical Equipment Informa 3,491 1.23 Media and Entertainment Astrazeneca 3,165 1.12 Pharmaceuticals Reuters 2,952 1.04 Media and Entertainment 131,594 46.46 * Total assets are stated net of current liabilities PORTFOLIO ANALYSIS AS AT 31 MAY 2006 % United Kingdom 54.31 North America 15.08 Europe 10.37 Japan 4.32 Pacific Basin 3.15 Other 0.31 Cash and fixed interest 12.46 Total 100.00 NOTES Note 1 The return per Ordinary Share is based on a weighted average number of shares in issue 49,481,205 (31 May 2005: 52,168,537; 30 November 2005: 51,334,348). Note 2 The total column of this statement is the profit and loss account of the Company. All revenue and capital items derive from continuing operations. No operations were acquired or discontinued in the period. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the Income Statement. Included in the cost of investments are transaction costs on purchases which amounted to £348,154 (31 May 2005 - £296,958; 30 November 2005 - £617,290) and transaction costs on sales which amounted to £147,761 (31 May 2005- £151,881; 30 November 2005 - £343,202). Note 3 Investments are designated as held at fair value through profit or loss in accordance with FRS 26 'Financial Instruments: Measurement'. Listed investments are valued at bid market prices. This represents a change in accounting policy. However, in accordance with the exemption conferred by paragraph 108D of FRS 26, comparatives have not been restated. In prior periods listed investments were valued at mid market prices. As a consequence the adoption of bid prices on 1 December 2005 decreased the value of listed investments by £215,910 to £260,167,513. Note 4 In accordance with FRS21 'Events After the Balance Sheet Date', the final dividend payable on Ordinary Shares is recognised as a liability when approved by shareholders. Interim dividends are recognised only when paid. This is a change in accounting policy and results in a restatement of the prior year creditors and a consequential increase in the prior year Net Asset Value. Dividends paid on Ordinary Shares in respect of earnings for each period are as follows: Six months to Six months to Year to 31 May 31 May 30 November 2005 2006 2005 £'000s £'000s £'000s Interim dividend 3.60p paid 25 August 2005 - - 1,814 Final dividend 5.20p paid 24 March 2006 (2005 - 2,575 2,407 2,407 4.60p) 2,575 2,407 4,221 Dividends payable at the period end are not recognised as a liability under FRS 21 'Events after the Balance Sheet Date'. Details of these dividends are set out below. Six months to Six months to Year to 31 May 31 May 30 November 2005 2006 2005 £'000s £'000s £'000s Interim dividend 4.0p payable 24 August 2006 (2005: 3.60p) 1,962 1,862 - Final dividend 5.20p - - 2,598 The interim and final dividend above is based on the number of shares in issue at the period end. However, the dividend payable will be based on the number of shares in issue on the record date and will reflect any purchases or cancellations of shares by the Company settled subsequent to the period end. Note 5 Preference Stock - Following the introduction of FRS 25 'Financial Instruments: Disclosure and Presentation', the 5% Cumulative Preference Stock is now classified as a liability as the rights of the stockholders to receive dividend payments are not calculated by reference to the Company's profits. This is a change of accounting policy and prior year net assets have been restated accordingly. Restatement of opening balances As previously stated Restated 31 May 2005 Adjustment 31 May 2005 £'000s £'000s £'000s Fixed Assets Investments 236,336 - 236,336 Net Current Assets 14,615 1,862 1 16,477 Total Assets less Current Liabilities 250,951 1,862 252,813 Less: Creditors-amounts falling due after one year (51,730) (450) 3 (52,180) Total Net Assets 199,221 1,412 200,633 Capital and Reserves Called up Share Capital: Ordinary 12,912 - 12,912 : Preference 450 (450) 3 - Capital Redemption Reserve 3,088 - 3,088 Capital Reserves: Realised 160,736 - 160,736 Unrealised 13,959 - 13,959 Revenue Reserve 8,076 1,862 1 9,938 Shareholders' Funds 199,221 1,412 200,633 Net asset value per Ordinary Share 384.4p 3.6p 388.0p Notes (continued) As previously stated Restated 30 November Adjustment 30 November 2005 £'000s 2005 £'000s £'000s Fixed Assets Investments 260,383 - 260,383 Net Current Assets 14,865 2,598 2 17,463 Total Assets less Current Liabilities 275,248 2,598 277,846 Less: Creditors-amounts falling due after one year (51,697) (450) 3 (52,147) Total Net Assets 223,551 2,148 225,699 Capital and Reserves Called up Share Capital: Ordinary 12,491 - 12,491 : Preference 450 (450) 1 - Capital Redemption Reserve 3,509 - 3,509 Capital Reserves: Realised 164,055 - 164,055 Unrealised 35,226 - 35,226 Revenue Reserve 7,820 2,598 2 10,418 Shareholders' Funds 223,551 2,148 225,699 Net asset value per Ordinary Share 446.5p 5.2p 451.7p 1 Represents the effect of not recognising the interim dividend (FRS 21). 2 Represents the effect of not recognising the final dividend (FRS 21). 3 Represents the effect of recognising the 5% Cumulative Preference Stock holding as a creditor due after more than one year (FRS 25). Note 6 The interim statement has neither been audited nor reviewed by the Company's auditors. The financial information for the year ended 31 October 2005 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies and restated by reference to the changes in accounting policies detailed above. The auditor's report on those accounts was unqualified and did not contain a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. The interim report will be sent to shareholders in mid July 2006 and will be available to members of the public from the Company's registered office at 155 Bishopsgate, London EC2M 3AD. This information is provided by RNS The company news service from the London Stock Exchange

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