Final Results

Merrill Lynch UK Inv Tst PLC 11 November 2002 11 November 2002 MERRILL LYNCH UK INVESTMENT TRUST plc PRELIMINARY ANNOUNCEMENT OF RESULTS in respect of the year ended 30 September 2002 • The directors propose a final dividend of 17.0p (net) per ordinary share (2001: 20.0p), making a total ordinary dividend payment for the year of 25.5p (net) per ordinary share (2001: 30.0p). • Net Asset Value per share ('NAV') has fallen by 26.2% (with net income reinvested) to 585.59p, compared with a 20.8% fall in the FTSE All-Share Index. • The effective level of gearing was reduced from 26.8% at the beginning of the year to around 15% from June 2002. Nevertheless, performance was affected by the high level of long term borrowing; 3.9% of the 5.4% under-performance was attributable to gearing. • Share price down 34.5% to 455.00p (with net income reinvested). Contacts: Ian Barby Managing Director, Investment Trusts 020 7743 5224 Nigel Webb, Public Relations Merrill Lynch Investment Managers 020 7743 5938 William Clutterbuck The Maitland Consultancy 020 7379 5151 The Chairman, Mr Richard Oldfield, commented: 'The unreliability of most forecasts has been well illustrated in the last two years: no-one, neither optimist nor pessimist, could have predicted that the US economy would have a recession in the first nine months of 2001 and then, after a calamitous terrorist event, show growth thereafter. We are therefore reluctant to try to make forecasts. There are certainly many dark clouds, economic and political. But markets often do a very good job of discounting such difficulties. It is a truism that the point at which a bear market ends is the moment of maximum gloom. We cannot safely say that we have reached that point, but the level of valuations of many UK companies - low price-earnings ratios and dividend yields higher than bond or cash yields - is attractive and increases the probability of satisfactory returns in the future. 'The last two years have been very bad for our shareholders. Nothing is certain, but our feeling is that the Company will do much better for shareholders, in terms both of rising net asset value and a narrowing of the share price discount to that net asset value, over the next two or three years.' Commenting on the outlook, Merrill Lynch Investment Managers Limited, noted: 'The UK market offers good value in some areas, both relative to historic measures and to other asset classes such as bonds. Meanwhile the UK economy continues to be supported by low interest rates and unemployment as well as strong consumer confidence. However the outlook for the global economy remains uncertain, with recent data suggesting continuing weakness. This is likely to continue to put pressure on corporate earnings, while concerns over the potential for war in the Middle East and further corporate scandals are still likely to affect investors' risk appetites. This would suggest that defensive shares may continue to perform well over the next year. The fund will continue to follow the approach of looking for investment opportunities amongst high quality companies, with good cash generation characteristics, strong management and a high degree of earnings visibility.' CONSOLIDATED REVENUE ACCOUNT for the year ended 30 September 2002 Year ended Year ended 30 September 30 September 2002 2001 £'000 £'000 (audited) (audited) Income (Note 4) 3,786 4,043 Investment management fees (Note 5) (179) (233) Operating expenses (187) (246) Net return before finance costs and taxation 3,420 3,564 Finance costs (761) (761) Return from ordinary activities before taxation 2,659 2,803 Taxation on ordinary activities - (65) Return on ordinary activities after taxation 2,659 2,738 Dividends in respect of non-equity shares (12) (12) Revenue attributable to equity shareholders 2,647 2,726 Dividends in respect of equity shares (Note 3) (3,420) (4,228) Transfer from reserve (773) (1,502) TOTAL RETURN PER ORDINARY SHARE for the year ended 30 September 2002 2002 2002 2001 2001 (audited (audited (audited (audited weighted) actual) weighted) actual) Earnings per ordinary share 19.39p 19.80p 19.33p 19.34p Capital return per share (229.42p) (234.28p) (368.54p) (368.76p) Total Return per ordinary share (210.03p) (214.48p) (349.21p) (349.42p) Dividends per ordinary share 25.50p 25.50p 30.00p 30.00p SUMMARISED CONSOLIDATED BALANCE SHEET as at 30 September 2002 30 September 30 September 2002 2001 £'000 £'000 (audited) (audited) Fixed assets Listed investments at market valuation 90,486 148,573 Unlisted investments at directors' valuation 83 89 90,569 148,662 Current assets Debtors 526 5,248 Cash and cash funds 30,230 7,905 30,756 13,153 Creditors: amounts falling due within one year (3,249) (6,282) Net current assets 27,507 6,871 Total assets less current liabilities 118,076 155,533 Creditors: amounts falling due after one year (39,540) (39,518) Net assets 78,536 116,015 Capital and reserves Called-up share capital 6,935 7,297 Share premium 1,258 1,258 Other capital reserves 66,961 103,305 Revenue reserve 3,382 4,155 Total shareholders' funds 78,536 116,015 Total shareholders' funds are attributable to: Equity shareholders 78,286 115,765 Non-equity shareholders 250 250 78,536 116,015 Net asset value per ordinary share 585.59p 821.40p CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 September 2002 Year ended Year ended 30 September 30 September 2002 2001 £'000 £'000 (audited) (audited) Net cash flow from operating activities 2,946 2,928 Net cash outflow from servicing of finance (2,985) (3,034) Purchase of fixed asset investments (83,602) (258,371) Proceeds from the sale of fixed asset investments 115,318 265,990 Equity dividends paid (3,966) (4,228) Purchase of ordinary shares (5,386) (871) Increase in cash 22,325 2,414 RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES 30 September 30 September 2002 2001 £'000 £'000 (audited) (audited) Net return before finance costs and taxation 3,420 3,564 Investment management and performance fees capitalised (534) (690) Net purchases of investments by subsidiary undertaking - (248) Decrease in accrued income 154 377 Decrease in creditors (94) (446) Tax on investment income included within gross income - (17) Loss on investment dealing by subsidiary undertaking - 388 Net cash flow from operating activities 2,946 2,928 Notes 1. Principal activity The principal activity of the Company is that of an investment trust within the meaning of section 842 of the Income and Corporation Taxes Act 1988. 2. Basis of preparation The preliminary financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments, and are in accordance with section 230 of, and schedule 4 to, the Companies Act 1985 and with applicable accounting standards and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' ('SORP'), except for the treatment of the management fee, as detailed in the Annual Report. 3. Dividend The preliminary results were approved by the Board on 11 November 2002. The Directors will recommend to shareholders at the Annual General Meeting to be held on 16 December 2002 a final dividend of 17.0p (2001: 20.0p) per ordinary share to be paid on 20 December 2002 to ordinary shareholders on the register of members at the close of business on 22 November 2002. The final dividend cost has been based on the number of shares in issue on 8 November 2002. 4. Income 2002 2001 £'000 £'000 Income from investments: Dividends: - UK listed 3,103 4,103 - Overseas listed 2 73 Interest bearing: - UK listed 9 69 3,114 4,245 Interest receivable and other income: Deposit and cash fund interest 672 186 Loss on investment dealing by subsidiary undertaking - (388) 672 (202) Total income 3,786 4,043 5. Investment management fee Revenue Capital Total 2002 2001 2002 2001 2002 2001 £'000 £'000 £'000 £'000 £'000 £'000 Investment management fee 151 198 452 595 603 793 Performance related fee on unlisted portfolio 1 - 3 (9) 4 (9) Total irrecoverable VAT thereon 27 35 79 104 106 139 179 233 534 690 713 923 6. Gearing ratios as a percentage of the equity shareholders' funds 30 September 2002 Total borrowings 50.0% Net borrowings (i.e. effective gearing) 14.6% 7. Publication of non-statutory accounts The financial information contained in this announcement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The annual report and financial statements for the year ended 30 September 2002 will be filed with the Registrar of Companies in due course. The figures set out above have been reported upon with no qualification by the auditors. The comparative figures are extracts from the audited financial statements of Merrill Lynch UK Investment Trust plc for the year ended 30 September 2001, which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under section 237 of the Companies Act. 8. 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 UK Investment Trust plc, 33 King William Street, London EC4R 9AS. This report will also be available on the Merrill Lynch Investment Managers website at www.mlim.co.uk/its 9. The Annual General Meeting of the Company will be held at 33 King William Street, London EC4 on Monday, 16 December 2002 at 11.00am. 33 King William Street London EC4R 9AS FILENAME /p MLUKIT/stock exchange announcements/prelim 2002.doc This information is provided by RNS The company news service from the London Stock Exchange
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