Final Results

City of London Investment Trust PLC 08 September 2004 7 September 2004 THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Total Returns 30 June 2004 30 June 2003 • Net asset value per ordinary share ("NAV") +17.8% -11.1% • FTSE All-Share Index +16.9% -9.7% • Ordinary share price +3.2% -9.0% Dividend (per share) 8.33p 8.07p Extracts from the Chairman's Statement:- Performance Having produced a very good return in the first half of the period under review, UK equities made more modest progress during the second six months against a background of increases in interest rates and a rising oil price. City of London's net asset value total return for the twelve months was 17.8% which was ahead of the FTSE All-Share Index by 0.9%. The outperformance was a result of good stock selection and a positive contribution from gearing. In common with other investment trusts, City of London's share price discount to net asset value widened during the course of the year. Whilst this led to a more disappointing share price total return it is still in positive territory at 3.2%. The current lower than usual demand for investment trusts provides investors with the opportunity to purchase shares on a lower valuation and on historically high dividend yields. - MORE - THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Share Buy Back and Gearing We seek permission from shareholders at each Annual General Meeting to buy back up to 14.99% of the company's shares. The directors only use this authority when it results in an increase in the net asset value per ordinary share and is in the interest of shareholders as a whole. We also take into account the source of funds to finance a buy back and the effect on revenue and gearing. Although no shares were repurchased during the year ended 30 June 2004, we have bought in since that date 1.4 million shares taking advantage of the wider discount. As a result the net asset value has been enhanced for the remaining shareholders. This year gearing made a positive contribution to our performance compared to a negative contribution in the previous year. Dividends Dividends remain at the heart of our investment approach because we believe that, in general, growing dividends are a key feature of investment success in the UK. We are proud that City of London has increased its dividend every year since 1966. A fourth interim dividend of 2.12p was paid on 31 August 2004, making a net dividend for the year of 8.33p. This is an increase of 3.2% over the previous year. For the year to 30 June 2005, the Board is forecasting a minimum increase of 1.8% in the company's total net dividend to 8.48p, payable at the new quarterly rate of 2.12p. - MORE - THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Expenses The investment management fee and other non interest expenses were around 0.61% of the company's average assets for the year. This includes a fee for outperformance paid to our investment manager, Henderson Global Investors. This fee rate is very competitive compared with most other equity savings vehicles. Excluding the performance fee, total expenses amounted to 0.49% of shareholders funds. Savings City of London sets out to be an attractive and straight forward long-term savings vehicle for private investors. As well as investing directly, shares can be purchased through the City of London Alliance Trust Pension, the Henderson Investment Trust Share Plan and the Henderson ISA. Outlook The UK financial markets have gone some way to adjusting from exceptionally low interest rates to a more normal level. The effect on the UK consumer will be more gradual and remains a key consideration for domestically generated corporate profits. The high oil price provides a further challenge. Structural selling pressure from UK life assurance companies and pension funds switching out of equities remain a concern but can also throw up opportunities in the UK's open system of corporate ownership, with undervalued companies being taken over. -MORE- THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 The valuation of UK equities seems attractive with the dividend yield of the FTSE All-Share Index rising from 3.1% to 3.2% since I last wrote to shareholders six months ago. We are encouraged by this summer's interim dividend increases from UK companies. Large companies, in which the Trust is principally invested, continue to offer a significantly better dividend yield than medium sized and smaller companies. Annual General Meeting Shareholders are invited to the Annual General Meeting which will take place on Friday 22 October at 4 Broadgate, London EC2M 2DA. The meeting will start at 3.00 pm and will include a presentation from the portfolio manager. Tea and light refreshments will be provided. S M de Zoete 7 September 2004 - MORE - THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Statement of Total Return (incorporating the revenue account) for the year ended 30 June 2004 Unaudited Audited Year ended 30 June 2004 Year ended 30 June 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital - 57,718 57,718 - (63,399) (63,399) gains/(losses) from investments Income from fixed asset 20,050 - 20,050 18,657 - 18,657 investments Other interest receivable 212 - 212 170 - 170 and similar income ---------- ------------ ---------- ---------- ---------- ---------- Gross revenue and capital 20,262 57,718 77,980 18,827 (63,399) (44,572) gains/(losses) Management and performance (896) (1,220) (2,116) (426) (994) (1,420) fees Other administrative (489) - (489) (526) - (526) expenses ---------- ------------ ---------- ---------- ----------- ---------- Net return/(loss) on ordinary activities before interest payable and 18,877 56,498 75,375 17,875 (64,393) (46,518) taxation Interest payable (1,282) (2,991) (4,273) (1,339) (3,125) (4,464) ---------- ------------ ---------- ---------- ----------- ---------- Net return/(loss) on ordinary activities before taxation 17,595 53,507 71,102 16,536 (67,518) (50,982) Taxation on net return on (122) - (122) (81) - (81) ordinary activities ---------- ------------ ---------- ----------- ----------- ---------- Net return/(loss) on ordinary activities after taxation 17,473 53,507 70,980 16,455 (67,518) (51,063) Dividends: Preference and preferred (190) - (190) (190) - (190) ordinary stocks ---------- ------------ ---------- ----------- ----------- ---------- Net return/(loss) 17,283 53,507 70,790 16,265 (67,518) (51,253) attributable to the ordinary shares ---------- ------------ ---------- ----------- ----------- ---------- Dividends: Ordinary shares Three interim payments of (13,029) - (13,029) (12,373) - (12,373) 2.07p (2003: 2.00p) Fourth interim payment of (4,427) - (4,427) (4,343) - (4,343) 2.12p (2003: 2.07p) ---------- ------------ ---------- ----------- ----------- ---------- (17,456) - (17,456) (16,716) - (16,716) ---------- ------------ ---------- ----------- ----------- ---------- Transfer (from)/to reserves (173) 53,507 53,334 (451) (67,518) (67,969) ====== ======= ====== ====== ====== ====== Return/(loss) per ordinary 8.24p 25.50p 33.74p 7.87p (32.66)p (24.79)p share (note 1) ====== ======= ====== ====== ====== ====== The revenue columns of this statement represent the revenue accounts of the Company. - MORE - THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Balance Sheet at 30 June 2004 Unaudited Audited 30 June 30 June 2004 2003 £'000 £'000 Fixed asset investments Listed at market value in the United Kingdom 483,901 440,922 AIM quoted investment at market value 2,000 - Listed at market value overseas 14,347 9,753 Investment in FTSE 100 Index future (6,706) - Investment in subsidiary undertakings 347 347 ------------ ------------- 493,889 451,022 ------------ ------------- Current assets Debtors 9,920 2,113 Cash at bank 7,928 2,599 ------------ ------------- 17,848 4,712 ------------ ------------- Creditors: amounts falling due within one year (9,139) (6,470) ------------ ------------- Net current assets/(liabilities) 8,709 (1,758) ------------ ------------- Total assets less current liabilities 502,598 449,264 Creditors: amounts falling due after more than one year (46,000) (46,000) ------------ ------------- Total net assets 456,598 403,264 ======= ======= Capital and reserves Called up share capital 54,539 54,539 Share premium account 35,309 35,309 Other capital reserves 356,052 302,545 Revenue reserve 10,698 10,871 ------------ ------------- Shareholders' funds (including non-equity interests 456,598 403,264 of £2,086,000) ======= ======= Net asset value per ordinary share (note 2) 216.63p 191.21p ======= ======= -MORE- THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Cash Flow Statement for the year ended 30 June 2004 Unaudited Audited 2004 2004 2003 2003 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 17,775 15,386 Servicing of finance Debenture interest paid (4,265) (4,265) Bank and loan interest paid (8) (193) Dividends paid on preference and preferred ordinary stocks (190) (190) ---------- ---------- Net cash outflow from servicing of finance (4,463) (4,648) Taxation Withholding and income tax recovered 51 7 ---------- ---------- Net tax recovered 51 7 Financial investment Cash paid under future contracts (79) - Purchases of investments (36,916) (40,065) Sales of investments 46,330 43,778 ---------- ---------- Net cash inflow from financial investment 9,335 3,713 Equity dividends paid (17,372) (16,478) ----------- ---------- Net cash inflow/(outflow) before financing 5,326 (2,020) Financing Net cash outflow from loans - (214) Proceeds from issue of ordinary shares - 4,742 ---------- ---------- Net cash inflow from financing - 4,528 ---------- ---------- Increase in cash 5,326 2,508 ====== ====== -MORE - THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 Notes: 1. Return/(loss) per Ordinary Share Revenue return per ordinary share is based on earnings attributable to the ordinary shares of £17,283,000 (2003: £16,265,000) and on the weighted average number of ordinary shares in issue during the year of 209,813,762 (2003: 206,745,219). Capital gain per ordinary share is based on net capital gains for the year of £53,507,000 (2003 losses: £67,518,000) and on the weighted average number of ordinary shares in issue during the year of 209,813,762 (2003: 206,745,219). 2. Issued Share Capital There were 209,813,762 ordinary shares of 25p in issue at 30 June 2004 (30 June 2003: 209,813,762) for the purpose of calculating the net asset value per ordinary share. 3. Share Buy-Backs During the year the Company made no purchases in the market for cancellation of its own issued ordinary shares. Since the year end 1,400,000 ordinary shares were purchased for cancellation at a total cost of £2,597,000. As at the date of this report there were 208,413,762 ordinary shares in issue. 4. Share Allotments During the year no ordinary shares were issued by the Company. 5. 2004 Accounts The preliminary figures for the year ended 30 June 2004 are compiled from an extract of the latest accounts and do not constitute statutory accounts as defined by section 240 of the Companies Act 1985. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 6. 2003 Accounts The preliminary announcement is prepared on the same basis as set out in the 2003 accounts. The figures and financial information for the year ended 30 June 2003 are compiled from an extract of the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. 7. Annual Report The full annual report and accounts will be posted to shareholders in September 2004 and copies will be available thereafter from the Secretary at the Company's Registered Office, 4 Broadgate, London EC2M 2DA. The Annual General Meeting will be held on Friday 22 October 2004 at 3.00 pm. - MORE- THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Preliminary Results for the year ended 30 June 2004 The 40 largest equity investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows : Valuation at Valuation at 30 June 2004 30 June 2004 £'000 £'000 BP 32,386 Anglo American 5,358 HSBC 31,160 Wolseley 5,130 Shell Transport & Trading 22,854 Legal & General 5,087 GlaxoSmithKline 20,534 Smith & Nephew 5,045 Vodafone 19,199 Rio Tinto 4,972 Royal Bank of Scotland 16,674 Next 4,625 Barclays 15,502 Kingfisher 4,554 British American Tobacco 13,886 Slough Estates 4,488 Lloyds TSB 12,953 Bovis Homes 4,479 HBOS 12,285 Allied Domecq 4,235 AstraZeneca 10,886 Boots 4,231 Diageo 10,781 Prudential 4,033 Land Securities 10,141 Scottish Power 3,988 Tesco 9,585 Imperial Tobacco 3,861 Aviva 7,966 BPB 3,679 BT 6,650 Reckitt Benckiser 3,450 Unilever 6,140 Gallaher 3,332 National Grid Transco 6,021 Rodamco Europe 3,331 Scottish & Southern Energy 5,793 Tomkins 3,294 Johnston Press 5,552 BOC 3,231 These investments represent 72.23% of the portfolio. - ENDS - For further information please contact : Job Curtis Portfolio Manager, The City of London Investment Trust plc Telephone: 020 7818 4367 Stephen Westwood Head of Investment Trusts, Henderson Global Investors Telephone: 020 7818 5517 or Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222 This information is provided by RNS The company news service from the London Stock Exchange

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