Final Results

Edinburgh Worldwide Inv Trust PLC 01 December 2006 EDINBURGH WORLDWIDE INVESTMENT TRUST plc Results for the year to 31 October 2006 Over the year Edinburgh Worldwide's share price rose by 17% and net asset value per share increased by 15%. By comparison, the benchmark index (MSCI All Countries Index in sterling terms) rose by 11%. The investment focus remains long term and the approach taken is to choose shares on a global basis on their merits alone rather than by reference to the composition of the benchmark. Baillie Gifford has been managing Edinburgh Worldwide for three years and over that period the share price has risen by 79%, NAV per share by 55% and the Benchmark by 34% â€¢ Gearing. During the period equity gearing was increased on market weakness with additions being made to existing holdings on setbacks. The current level is likely to be maintained unless market sentiment changes significantly. â€¢ Earnings and Dividend. Earnings per share fell from 2.26p to 1.67p. A final dividend of 1.50p is being recommended to give an unchanged total for the year of 2.00p. Edinburgh Worldwide's objective is capital growth and achieving income is not a consideration when selecting investments. In future the level of the dividend is likely to equate roughly with the level of earnings. â€¢ Second half. In the second half of the year net asset value fell by 3% while the Benchmark fell by 2%. â€¢ Investments. There are 39 equity investments in the portfolio of which 19 have been held since the portfolio was reorganised in November 2003. During the year two holdings were taken over: Golden West (Californian mortgage lender) and McCarthy & Stone (retirement home builder). Notable sales were: ABB (power generation and automation equipment), BMW (automobiles), Imperial Tobacco, Wellpoint (managed care operator), BHP Billiton (mining) and Dell (computer manufacturer). New holdings were taken in Banco Itau (Brazilian bank), Essilor (lens manufacturer), Getty Images (internet based picture library) Infosys (Indian IT outsourcer), Straumann (Swiss dental company) and Yamada Denki (Japan's largest electronic retailer). â€¢ Outlook. The Managers continue to find what they view as attractive long term investment opportunities. Past performance is no guarantee of future performance. Edinburgh Worldwide aims to achieve long term capital growth by investing in stock markets throughout the world. The Trust has total assets of Â£150 million (before deduction of loans of Â£26 million). Edinburgh Worldwide is managed by Baillie Gifford & Co, the Edinburgh based fund management group with over Â£47 billion under management and advice as at 30 November 2006. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. This is because the share price is determined by the changing conditions in the relevant stockmarkets in which the Company invests and by the supply and demand for the Company's shares. Investment in investment trusts should be regarded as medium to long-term. You can find up to date performance information about Edinburgh Worldwide on the Baillie Gifford website at www.bailliegifford.com. 1 December 2006 - ends - For further information please contact: Mark Urquhart, Manager, Edinburgh Worldwide Investment Trust plc 0131 275 2070 Robert O'Riordan, Marketing Manager Baillie Gifford & Co 07730 412007 Mike Lord, Director, Broadgate Marketing 020 7726 6111 EDINBURGH WORLDWIDE INVESTMENT TRUST plc Chairman's Statement This has been another satisfactory year for your Company: the share price rose by 17.0% and net asset value (NAV) per share by 14.8%. In comparison, the MSCI All Countries World Index (the benchmark against which performance is measured) rose by 11.4%. As the Managers invest for the long term, performance over several years is probably more telling. Currently, the picture here is good too: over 3 years (when the current Managers assumed responsibility) the share price is up by 79.3% and the NAV up by 55.5% while our benchmark is only 33.8% higher. It is also worth noting that at one point during the year the shares actually traded at a small premium, before slipping back to a discount in single figures at the time of the spring market correction. Investment The Managers choose shares on a global basis for their long term attractions. These investments are positioned in a relatively concentrated portfolio of about 40 publicly traded equities. The average holding period of companies in the portfolio is likely to be at least 5 years. Those holdings which have been held continuously since the portfolio was reorganised in November 2003 when Baillie Gifford assumed control are marked as such later in the report. The results of this approach are, to date, very encouraging. However I must again reiterate that past performance should not be taken a as guide to future performance and also point out that because there is little resemblance between this portfolio and the index against which it is measured, there will inevitably be periods, when performance lags the index. Shares in Edinburgh Worldwide are really only suitable for those investors who share the Board's and the Managers' long time horizons. Investing in markets at times of increased volatility requires both verve and nerve. The Managers have displayed both in this period. Gearing into equities, which had declined naturally as markets rose over the past two and a half years, was increased when markets suffered a setback earlier this calendar year; a number of holdings were increased taking advantage of falls in share prices driven by short term market concerns. Earnings and Dividend Shares are not chosen for their income generation capability and this year's earnings per share fell from 2.26p to 1.67p. As well as being unsuitable for short term investors, Edinburgh Worldwide should not be held by those with a preference for income. That said, we are recommending a final dividend of 1.50p which will give an unchanged total for the year of 2.00p. The shortfall compared to earnings is being taken from the revenue reserve which has been built up over the years to stand at 1.51p per share at 31 October 2005 after providing for the 2005 final dividend. EDINBURGH WORLDWIDE INVESTMENT TRUST plc Chairman's Statement (Ctd) The Board is recommending a maintained dividend this year as it realises that private investors like a predictable income stream. Over the past three years Edinburgh Worldwide's earnings have been boosted by a number of special dividends that may not be repeated and our current forecast is for a decrease in earnings in 2007. The revenue reserve is unlikely to be used to supplement earnings in future. Edinburgh Worldwide's objective is capital growth so it is logical that going forward the level of dividend per share will equate roughly with the level of earnings per share. Treasury Shares We are seeking to renew the powers to hold any shares which may be bought back in treasury with a view to re-issuing later but only at a premium. While no shares were bought back last year, we consider this a useful tool to have at our disposal in the event of an imbalance in, or a time lag, between the supply and demand for our shares. Performance Fee A performance fee of Â£79,000 is payable to the Managers this year due to their out performance of the agreed benchmark. Details of the fee arrangement and the calculation are included within the Annual Report. Outlook The Managers continue to find investment opportunities which they view as attractive over the long term and we intend maintaining gearing at around current levels unless market sentiment changes significantly. Annual General Meeting The Annual General Meeting will be held at 12 noon on Thursday, 1 February 2007 in Discovery Point, Dundee, I do hope you will come. You will have the opportunity to meet the Board and to listen to a short presentation by Mark Urquhart, the partner at Baillie Gifford who manages our investments, on the investment approach and the portfolio's progress. David A Coltman Chairman EDINBURGH WORLDWIDE INVESTMENT TRUST plc The following is the unaudited preliminary statement for the year to 31 October 2006 which was approved by the Board on 30 November 2006. The Board of Edinburgh Worldwide Investment Trust plc is recommending to the Annual General Meeting of the Company to be held on 1 February 2007 the payment of a final dividend of 1.50p (1.50p last year) per ordinary share making 2.00p (2.00p last year) for the year ended 31 October 2006. INCOME STATEMENT For the year ended For the year ended 31 October 2006 31 October 2005 (unaudited) (audited) Revenue Capital Total Revenue Capital Total Restated+ Restated+ Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Gains on investments - 16,264 16,264 - 26,795 26,795 Currency gains/(losses) - 1,751 1,751 - (243) (243) Income (note 2) 2,116 - 2,116 2,379 - 2,379 Investment management fee (note 3) (253) (841) (1,094) (179) (1,474) (1,653) Other administrative expenses (399) - (399) (359) - (359) Net return before finance costs and taxation 1,464 17,174 18,638 1,841 25,078 26,919 Finance costs of borrowings (382) (1,146) (1,528) (395) (1,183) (1,578) Return on ordinary activities before taxation 1,082 16,028 17,110 1,446 23,895 25,341 Tax on ordinary activities (265) 135 (130) (341) 184 (157) Return on ordinary activities after taxation 817 16,163 16,980 1,105 24,079 25,184 Return per ordinary share (note 4) 1.67p 32.98p 34.65p 2.26p 49.13p 51.39p * The total column of this statement is the profit and loss account of the Company. + Various changes in accounting policies, as described in note 1, have had the cumulative effect of increasing reported net assets by Â£628,000 for the year ended 31 October 2005. All revenue and capital items in this statement derive from continuing operations. A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. EDINBURGH WORLDWIDE INVESTMENT TRUST plc BALANCE SHEET At 31 October 2006 At 31 October 2005 (unaudited) (audited) Restated+ Â£'000 Â£'000 FIXED ASSETS Investments held at fair value 148,870 136,800 CURRENT ASSETS Debtors 1,629 454 Cash and short term deposits 3,934 305 5,563 759 CREDITORS Amounts falling due within one year (4,335) (1,698) NET CURRENT ASSETS/(LIABILITIES) 1,228 (939) TOTAL ASSETS LESS CURRENT LIABILITIES 150,098 135,861 CREDITORS Amounts falling due after more than one year (note 6) (26,062) (27,825) 124,036 108,306 CAPITAL AND RESERVES Called-up share capital 2,450 2,450 Share premium 82,180 82,180 Special reserve 35,220 35,220 Capital reserve - realised (34,132) (45,920) Capital reserve - unrealised 37,004 32,629 Revenue reserve 1,314 1,477 EQUITY SHAREHOLDERS' FUNDS 124,036 108,036 NET ASSET VALUE PER ORDINARY SHARE 253.11p 220.46p + See note 1. DISTRIBUTION OF ASSETS (unaudited) At 31 October 2006 At 31 October 2005 Restated+ % % Equities: United Kingdom 1.8 7.3 Continental Europe 24.3 18.3 North America 35.0 40.4 Japan 5.5 3.1 Asia Pacific 4.6 4.5 Emerging Markets 23.8 19.1 Total equities 95.0 92.7 Sterling denominated bonds 0.8 1.0 US$ denominated bonds 2.2 4.8 Yen denominated bonds 1.2 2.2 Net current assets/(liabilities) 0.8 (0.7) Total assets (before deduction of loan) 100.0 100.0 + See note 1. EDINBURGH WORLDWIDE INVESTMENT TRUST plc RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (unaudited) Called-up Share Special Capital Capital Revenue Equity share premium reserve reserve - reserve - reserve shareholders' capital realised unrealised funds Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Shareholders' funds at 1 November 2005 as previously reported 2,450 82,180 35,220 (45,920) 32,736 742 107,408 Prior year adjustments: Revaluation of investments at bid prices - - - - (107) - (107) Reversal of provision of final dividend - - - - - 735 735 Shareholders' funds at 1 November 2005 as restated 2,450 82,180 35,220 (45,920) 32,629 1,477 108,036 Return on ordinary activities after taxation - - - 11,788 4,375 817 16,980 Dividends paid during the year - - - - - (980) (980) Shareholders' funds at 31 October 2006 2,450 82,180 35,220 (34,132) 37,004 1,314 124,036 Called-up Share Special Capital Capital Revenue Equity share premium reserve reserve - reserve - reserve shareholders' capital realised unrealised funds Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Shareholders' funds at 1 November 2004 as previously reported 2,450 82,180 35,220 (44,457) 7,182 617 83,192 Prior year adjustments: Revaluation of investments at bid prices - - - - (95) - (95) Reversal of provision of final dividend - - - - - 833 833 Shareholders' funds at 1 November 2004 as restated 2,450 82,180 35,220 (44,457) 7,087 1,450 83,930 Return on ordinary activities after taxation - - - (1,463) 25,542 1,105 25,184 Dividends paid during the year - - - - - (1,078) (1,078) Shareholders' funds at 31 October 2005 2,450 82,180 35,220 (45,920) 32,629 1,477 108,036 EDINBURGH WORLDWIDE INVESTMENT TRUST plc SUMMARISED CASH FLOW STATEMENT For the year ended For the year ended 31 October 2006 31 October 2005 (unaudited) (audited) Â£'000 Â£'000 Â£'000 Â£'000 NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (note 8) (82) 1,475 NET CASH OUTFLOW FROM SERVICING OF FINANCE (1,554) (1,564) TOTAL TAX PAID (128) (158) FINANCIAL INVESTMENT Acquisitions of investments (35,655) (26,528) Disposals of investments 42,040 27,633 Realised currency loss (12) (22) NET CASH INFLOW FROM FINANCIAL INVESTMENT 6,373 1,083 EQUITY DIVIDENDS PAID (980) (1,078) INCREASE/(DECREASE) IN CASH 3,629 (242) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Increase/(decrease) in cash in the period 3,629 (242) Exchange movement on bank loans 1,763 (221) MOVEMENT IN NET DEBT IN THE YEAR 5,392 (463) NET DEBT AT 1 NOVEMBER (27,520) (27,057) NET DEBT AT 31 OCTOBER (22,128) (27,520) EDINBURGH WORLDWIDE INVESTMENT TRUST plc PORTFOLIO AND EQUITY PERFORMANCE at 31 October 2006 (unaudited) Fair value Fair value % of Performance+ 2005 Â£'000 total Restated++ assets Â£'000 Name Business Absolute Relative % % Atlas Copco* Engineering 7,009 4.7 51.1 32.6 4,541 Moody's* Bond rating agency 6,684 4.5 16.0 1.8 6,421 Canon* Printers, copiers and cameras 5,939 4.0 45.0 27.2 4,156 CVRD Iron ore mining 5,895 3.9 13.9 (0.1) 4,616 Gazprom* Gas exploration and production 5,874 3.9 68.9 48.2 5,208 SAP* Business software 5,501 3.7 8.8 (4.5) 2,890 Petrobras* Oil exploration and production 5,337 3.5 31.9 15.7 4,136 Porsche* Luxury automobiles 5,230 3.5 51.2 32.7 3,486 Pulte Homes American house builder 5,069 3.4 (23.2) (32.6) 2,486 Samsung Electronics* Electronics manufacturer 4,815 3.2 14.3 0.3 4,245 eBay Internet auction 4,437 2.9 (24.4) (33.6) 2,400 Infosys Technologies Software company 4,147 2.8 35.5** 33.7** - Lukoil* Oil exploration and production 4,065 2.7 35.6 19.0 5,381 Sandvik Engineering 3,942 2.6 21.5 6.6 2,581 Teva Pharmaceuticals* Generic drugs manufacturer 3,805 2.5 (19.2) (29.1) 3,878 Microsoft* Software products 3,577 2.4 4.9 (7.9) 3,452 Hermes* Luxury goods 3,532 2.4 34.8 18.3 2,391 HDFC Mortgage bank 3,414 2.3 42.1 24.7 2,719 Banco Itau Retail and commercial bank 3,251 2.2 22.1** 14.4** - Carnival Cruise ship operator 3,186 2.1 (6.6) (18.0) 2,585 Ericsson* Telecommunications equipment 3,121 2.1 9.5 (3.9) 2,898 VCA Antech Animal hospitals and diagnostics 3,056 2.0 16.3 2.1 2,333 Omnicom* Advertising agency 2,995 2.0 14.5 0.5 2,016 Straumann Dental implants 2,903 1.9 (10.3)** (10.9)** - Whole Foods Market Organic food chain 2,874 1.9 (15.3) (25.7) 3,498 Essilor Opthalmology 2,860 1.9 (3.2)** (2.7)** - Pool Swimming pool supplies 2,822 1.9 6.5 (6.5) 2,129 Progressive Ohio* Auto insurance 2,789 1.9 (22.5) (31.9) 3,595 Wolseley* Builders' merchant 2,755 1.8 10.5 (3.1) 2,559 Iron Mountain Document management services 2,539 1.7 3.4 (9.2) 1,980 M&T Bank* Retail banking 2,487 1.7 6.7 (6.3) 2,659 Walgreen* Pharmacy chain 2,384 1.6 (10.3) (21.3) 2,670 Amazon.com Online retailer 2,354 1.5 (11.4) (22.2) 2,023 L'Oreal Personal care 2,295 1.5 23.6 8.5 1,626 Yamada Denki Consumer electronics retailer 2,256 1.5 6.2** (0.1)** - William Wrigley* Chewing gum manufacturer 2,095 1.4 (11.5) (22.3) 2,415 Zhejiang Expressway Toll-road operator 2,089 1.4 10.8 (2.8) 1,860 Getty Images Internet based image library 1,768 1.2 (48.5)** (48.1)** - Patterson Companies Dental products and supplies 1,428 0.9 (26.1) (35.1) 1,920 Total Equities 142,579 95.0 EDINBURGH WORLDWIDE INVESTMENT TRUST plc PORTFOLIO AND EQUITY PERFORMANCE (Ctd) at 31 October 2006 (unaudited) Fair value % of total Â£'000 assets Name Total Equities (brought forward) 142,579 95.0 Fixed Interest Sterling denominated bonds Safeway 5.875% 2007 626 0.4 AMP Group Finance 7.125% 2019 562 0.4 1,188 0.8 US$ denominated bonds HSBC Bank USA 3.875% 2009 558 0.4 Old Mutual 8% 2008 547 0.4 Inmarsat 7.625% 2008/12 541 0.4 AIG 5.625% 2007 525 0.3 Golden West 4.125% 2007 514 0.3 Household Fin Corp 7% 2012 281 0.2 Deutsche Telecom 3.875% 2008 256 0.2 3,222 2.2 Yen denominated bonds Toyota Motor Corp 0.75% 2008 986 0.6 HBOS Treasury Services 0.8% 2008 895 0.6 1,881 1.2 Total Fixed Interest 6,291 4.2 Total Investments 148,870 99.2 Net Liquid Assets 1,228 0.8 Total Assets at Fair Value (before deduction of loan) 150,098 100.0 + Absolute and relative performance has been calculated over the period 1 November 2005 to 31 October 2006. Absolute performance is in sterling terms; relative performance is against MSCI All Countries World Index in sterling terms. ++ See note 1. * Held since November 2003 when Baillie Gifford & Co were appointed as Investment Managers and Secretaries to the Company. ** Figures relate to part-period returns. Past performance is no guarantee of future performance. (Source: Baillie Gifford & Co, StatPro) EDINBURGH WORLDWIDE INVESTMENT TRUST plc NOTES 1. A number of new UK Financial Reporting Standards have been introduced with which the Company must comply this year. These standards are part of the UK convergence programme with International Accounting Standards and as such have required most UK listed companies to restate prior year figures to reflect the new accounting treatment. The financial statements for the year to 31 October 2006 have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 October 2005 except as detailed below: a) investments have been valued at fair value through profit or loss in accordance with FRS 26 'Financial Instruments: Measurement'. The effect is to move from a mid price to a bid price basis of valuation, resulting in a reduction in the value of investments and unrealised capital reserves of Â£112,000 (2005- Â£107,000); b) in compliance with FRS 21 'Events after the Balance Sheet Date', dividends declared after the period end are no longer treated as a liability at the period end. The effect is to reduce creditors and increase revenue reserves by Â£735,000 (2005 - Â£735,000); c) the implementation of FRS 25 and the revision of the Statement of Recommended Practice ' Financial Statements of Investment Trust Companies' (SORP) in 2005 has resulted in changes in the presentation of total returns. Previously dividend distributions in respect of a year were disclosed on the Statement of Total Return and the revenue column of that statement was deemed to be the profit and loss account of the Company. We now present an Income Statement which does not show the distribution in respect of equity shares and, whilst it still shows information on capital and revenue returns, it is the total column which is regarded as the profit and loss account of the Company. Dividend distributions are now shown in the Reconciliation of Movements in Shareholders' Funds and in the Notes to the Accounts. The overall effect of these changes on shareholders' funds and reserves is detailed below: 31 October 2006 31 October 2005 Â£'000 Â£'000 Effect on shareholders' funds: Investments (112) (107) Creditors: dividends payable 735 735 623 628 Effect on reserves: Capital reserve - unrealised (112) (107) Revenue reserve 735 735 623 628 31 October 2006 31 October 2005 Â£'000 Â£'000 2. Income Income from investments and interest receivable 2,090 2,354 Other income 26 25 2,116 2,379 3. The investment management fee includes an investment performance fee of Â£79,000 (2005 - Â£890,000). EDINBURGH WORLDWIDE INVESTMENT TRUST plc NOTES (Ctd) 31 October 2006 31 October 2005 Restated Â£'000 Â£'000 4. Return per ordinary share Revenue return 1.67p 2.26p Capital return 32.98p 49.13p Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of Â£817,000 (2005 - Â£1,105,000), and on 49,004,319 ordinary shares, being the number of ordinary shares in issue during each year. Capital return per ordinary share is based on the net capital gain for the financial year of Â£16,163,000 (2005 - Â£24,079,000), and on 49,004,319 ordinary shares, being the number of ordinary shares in issue during each year. 2006 2005 2006 2005 Restated Restated Â£'000 Â£'000 5. Ordinary dividends Amounts recognised as distributions in the period: Previous year's final (paid 2 February 1.50p 1.70p 735 833 2006) Interim (paid 6 July 2006) 0.50p 0.50p 245 245 2.00p 2.20p 980 1,078 We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 842 of the Income and Corporation Taxes Act 1988 are considered. The revenue available for distribution by way of dividend for the year is Â£817,000 (2005 - Â£1,105,000). 2006 2005 2006 2005 Â£'000 Â£'000 Dividends paid and proposed in the period: Interim dividend per ordinary share (paid 6 July 2006) 0.50p 0.50p 245 245 Proposed final dividend per ordinary share (payable 2 February 2007) 1.50p 1.50p 735 735 2.00p 2.00p 980 980 If approved the final dividend will be paid on 2 February 2007 to all shareholders on the register at the close of business on 12 January 2007. The ex-dividend date is 10 January 2007. 6. The loan includes US$31,250,000, Y1,313,200,000 and Â£3,800,000 drawn down under a multi-currency loan facility with ING Bank N.V. (2005 - US$31,250,000, Y1,313,200,000 and Â£3,800,000). The loan is due for repayment in July 2008. 7. At the Annual General Meeting on 30 January 2006 the Company renewed its authority to purchase shares in the market, in respect of 7,345,747 ordinary shares (equivalent to 14.99% of its issued share capital at that date). No shares were bought back during the year to 31 October 2006 or 2005. At 31 October 2006 the Company had authority to buy back 7,345,747 ordinary shares. EDINBURGH WORLDWIDE INVESTMENT TRUST plc NOTES (Ctd) 31 October 2006 31 October 2005 Restated Â£'000 Â£'000 8. Reconciliation of net revenue before finance costs and taxation to net cash (outflow)/inflow from operating activities Net return on ordinary activities before finance costs and taxation 18,638 26,919 Gains on investments - securities (16,264) (26,795) Currency (gains)/losses (1,751) 243 Changes to debtors and creditors (778) 967 Amortisation of fixed income book cost 73 141 (82) 1,475 9. The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 October 2006. The financial information for 2005 is derived from the statutory accounts for 2005 and restated as disclosed in note 1. The accounts have been delivered to the Registrar of Companies. The Auditors have reported on the 2005 accounts, their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2006 are unaudited and will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 10. None of the views expressed in this document should be construed as advice to buy or sell a particular investment. This information is provided by RNS The company news service from the London Stock Exchange

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