Half Yearly Report

RNS Number : 4285O

Majedie Investments PLC

28 May 2015

 

Majedie Investments PLC

Half-Yearly Financial Report

31 March 2015

The Directors announce the unaudited half-yearly financial report for the six months to 31 March 2015 as follows:

Copies of the half yearly-report can be obtained from the following website:

www.majedieinvestments.com

Financial Highlights for the half year ended 31 March 2015

Total shareholder return (including dividends):	+10.4%
Net asset value total return (debt at par including dividends):	+14.5%
Revenue Return per share:	4.9p
Interim Dividend	3.0p
Directors' valuation of investment in Majedie Asset Management Limited:	£42.8m
Total Assets*:	184.8m
* Total assets are defined as total assets less current liabilities

Investment Objective and Policy Statement

Investment Objective

The Company's objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term.

Investment Policy

General

The Company invests principally in securities of publicly quoted companies worldwide and in funds managed by its investment manager, though it may invest in unquoted securities up to levels set periodically by the Board, including its investment in Majedie Asset Management Limited (MAM). Investments in unquoted securities, other than those managed by its investment manager or made prior to the date of the adoption of this investment policy, (measured by reference to the Company's cost of investment) will not exceed 10% of the Company's gross assets.

Risk diversification

Whilst the Company will at all times invest and manage its assets in a manner that is consistent with spreading investment risk, there will be no rigid industry, sector, region or country restrictions. The overall approach is based on an analysis of global economies sector trends with a focus on companies and sectors judged likely to deliver strong growth over the long term. The number of investments held, together with the geographic and sector diversity of the portfolio, enable the Company to spread its risks with regard to liquidity, market volatility, currency movements and revenue streams.

The Company will not invest in any holding that would, at the time of investment, represent more than 15 per cent of the value of its gross assets save that the Company may invest up to 25 per cent of its gross assets in any single fund managed by its investment manager where the Board believes that the investment policy of such funds is consistent with the Company's objective of spreading investment risk.

The Company may utilise derivative instruments including index-linked notes, contracts for difference, covered options and other equity-related derivative instruments for efficient portfolio management and investment purposes.

Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described above.

Asset allocation

The assets of the Company will be allocated principally between investments in publically quoted companies worldwide and in investments intended to provide an absolute return (in each case either directly or through other funds or collective investments schemes managed by the Company's investment manager) and the Company's investment in MAM itself.

Benchmark

The Company does not have one overall benchmark, rather each distinct group of assets is viewed independently. Any investments made into funds managed by the Company's investment manager will be measured against the benchmark or benchmarks, if any, whose constituent investments appear to the Company to correspond most closely to those investments. It is important to note that in all cases investment decisions and portfolio construction are made on an independent basis. The Board however sets various specific portfolio limits for stocks and sectors in order to restrict risk levels from time to time, which remain subject to the investment restrictions set out in this section.

Gearing

The Company uses gearing currently via long term debentures. The Board has the ability to borrow up to 100% of adjusted capital and reserves. The Board also reviews the level of net gearing (borrowings less cash) on an on-going basis and sets a range at its discretion as appropriate. The Company's current debenture borrowings are limited by covenant to 66 2/3% and any additional indebtedness is not to exceed 20% of adjusted capital and reserves.

Chief Executive's Report

The current year represents the first full year of the Company's assets being managed by Majedie Asset Management (MAM). In the six months to 31 March 2015 the Net Asset Value (NAV) (debt at par) rose by 14.5% and the share price by 10.4% on a total return basis. The shares have traded at a much lower discount than historically was the case and were, periodically, at a premium.

Investment Performance

The Company invests through a number of investment strategies managed by MAM and retains an equity holding in MAM. The Company has no overall benchmark; rather each fund has its own benchmark.  The Company's total assets were £184.8m at 31 March 2015.

The largest asset allocation, of £71.2m which represents 38.5% of the Company's total assets at 31 March 2015, is in a segregated fund that tracks the MAM UK Equity Fund. It is the flagship product of MAM and since inception in March 2003 has returned 14.1% per annum net of fees, which is an outperformance of 4.2% per annum against its benchmark, the FTSE All Share Index. The assets are predominately UK equities with overseas equities limited to 20% and the strategy incorporates a dedicated allocation to UK smaller companies. The segregated fund returned 7.7% net of fees in the six months to 31 March 2015, which is an outperformance of 2.4% compared to its benchmark which rose by 5.3%.

The Company's investment in the MAM UK Income Fund was valued at £22.0m which represents 11.9% of the Company's total assets at 31 March 2015. The UK Income Fund started in December 2011 and its objective is to maintain an attractive yield whilst outperforming the FTSE All Share Index over the longer term. Since inception, it has returned 24.2% per annum net of fees, which is an outperformance of 11.5% per annum compared to its benchmark, the FTSE All Share Index. The assets are predominately UK equities with overseas equities limited to 20%. In the six months to 31 March 2015 the fund returned 15.6%, which is an outperformance of 10.3% against its benchmark. It is noteworthy that the UK Income Fund and the segregated fund have only 5.3% of holdings by weight that are common to each other, at 31 March 2015.

The MAM Global Equity Fund, MAM Global Focus Fund and MAM US Equity Fund were launched by MAM in June 2014. The Company's allocations to these funds of £5.9m, £5.9m and £6.5m represent 3.2%, 3.2% and 3.5% respectively of the Company's total assets at 31 March 2015. In the six months to 31 March 2015 the funds have returned 14.5%, 17.7% and 20.5% net of costs, which is a relative outperformance of 2.3%, 5.5% and 5.2% respectively, compared to their benchmarks of the MSCI ACWI (Developed and Emerging Markets) and the S&P 500. The benchmarks are in Sterling terms as the Company is invested in the Sterling share classes.

The MAM Tortoise Fund has an allocation of £29.9m which represents 16.2% of the Company's total assets at 31 March 2015, and since its inception in August 2007 it has returned 10.4% per annum, net of fees. The fund has returned 4.7% in the six months to 31 March 2015. As an absolute return fund it has no relevant benchmark.

MAM has had a strong six months due to rising equity markets, good investment performance across all MAM Funds and continuing investment inflows. Assets under management have risen to £11.6bn. The new Global and US Funds have yet to materially influence the growth in assets under management, though it is very encouraging for the future that since inception their investment performance has been above benchmark. The Board has increased the valuation of its holding in MAM at 31 March 2015 to £42.8m, which represents 23.2% of the Company's total assets. At 31 March 2015 the Company owned 15.6% of MAM's share capital, having sold 2.5% in December 2014 which were either acquired by MAM's employee share benefit trust or cancelled. The proceeds of the sale were reinvested in the segregated fund, the UK Income Fund and the Tortoise Fund.

The realisation portfolio is less than 0.1% of total assets and cash is 0.2% of total assets. The cash figure excludes cash held in the segregated fund.

Results and Dividend

The capital return from continuing operations in the six months to 31 March 2015 was £16.6m compared to £7.1m in the six months to 31 March 2014. There was no capital loss from discontinued operations; in the six months to 31 March 2014 there were discontinued capital costs of £2.4m, which related to the closure of Javelin Capital. The income from investments in the six months to 31 March 2015 has decreased to £3.4m from £3.7m in 2014. This reflects the sale by the Company of shares representing 10% of MAM in March 2014 and therefore a lower total dividend from MAM. This was partially offset by increased income from the Company's other investments and an increased dividend per share from MAM.

Administration and investment management expenses rose from £0.7m to £1.1m. This reflects the investment management fees paid to MAM for the full six months to 31 March 2015.  In comparison, in the six months to 31 March 2014 only two months of fees were paid to MAM following its appointment in January 2014. The Company also paid certain expenses in the six months to March 2015 that had in 2014 been borne by Javelin Capital. The implementation of the Alternative Investment Fund Managers Directive (AIFMD) meant the Company was required to appoint a Depositary, which has increased costs. The resultant net revenue return from continuing operations for the Company was £2.6m compared to £3.0m in 2014.

Alternative Investment Fund Managers Directive

The directive came into force in July 2014 and the Company received formal authorisation to act as an internally managed Alternative Investment Fund Manager (AIFM) in April 2015. Prior to April 2015 the Company acted as the AIFM under transitional provisions of UK enabling legislation.

Summary

The current year represents the first full year of MAM managing the majority of the Company's assets and it bodes well that in the six months to 31 March 2015 all its investment strategies have outperformed their benchmarks. The allocation across different investment strategies at MAM enables the Company to have a diversified equity portfolio by geographic and sector exposure.

MAM had a strong half year and has further enhanced its position as a leading boutique manager, with a broader product range now that the Global and US Funds have a track record, and the Company's relationship with MAM continues to strengthen.

The Board remains focussed on the reduction of administration and investment management expenses and they will, over time, reduce. The Company renewed permission to issue equity at the 2015 AGM in order to manage the balance between the supply and demand for shares provided the stock trades at a premium to its NAV (debt at fair value). Such share issuance will also increase the size of the Company which will benefit all shareholders as the cost of debentures are diluted, the ongoing charges ratio is reduced and  the liquidity of the Company's shares is likely to increase.

Development of Net Asset Value

During the 6 months to 31 March 2015, in aggregate, the NAV has increased by £16.8m, recording total investment income and gains of £21.7m, having incurred net administration and finance costs of £2.5m, and having paid out £2.4m in dividends.

Allocation of Total Assets at 31 March 2015

	% of Total Assets
MAM UK Equity Segregated fund	38.5
MAM UK Income Fund	11.9
MAM Global Equity Fund	3.2
MAM Global Equity Focus Fund	3.2
MAM US Equity Fund	3.5
MAM Tortoise Fund	16.2
MAM	23.2
Cash/other*	0.3
	100.0

* Corporate cash and unlisted portfolio and does not include cash held in the MAM UK Equity Segregated fund or MAM Funds.

MAM Fund Performance

	6 months to 31 March		Since invested by the Company
	% Fund return (net of fees)	% benchmark return	% Fund return (net of fees)	% benchmark return
MAM UK Equity Segregated Fund	7.7	5.3	5.6	4.5
MAM UK Income Fund	15.6	5.3	20.7	8.2
MAM Global Equity Fund	14.5	12.2	16.5	15.6
MAM Global Focus Fund	17.7	12.2	17.6	15.6
MAM US Equity Fund	20.5	15.3	29.6	22.4
MAM Tortoise Fund	4.7	-	-0.4	-

Notes:

The MAM UK Equity Segregated Fund commenced on 22 January 2014.

The initial investment in MAM UK Income Fund was made on 29 January 2014.

The initial investments in MAM Global Equity, MAM Global Focus and MAM US Equity Funds were made on 30 June 2014 and 27 June 2014 respectively.

The initial investment in the MAM Tortoise Fund was made on 29 January 2014. The fund is absolute return and therefore has no benchmark.

William Barlow

Chief Executive
For and on behalf of the Board

27 May 2015

Fund Analysis

at 31 March 2015

Geographical Analysis

	% of Total
UK	70.0
Europe	11.7
US	13.7
Japan	1.1
Developed Asia	0.3
Emerging Markets	1.1
Cash	2.1
	100.0

Sector Analysis

	% of Total
Basic Materials	3.3
Consumer Goods	3.1
Consumer Services	24.4
Financials	25.4
Health Care	7.3
Industrials	10.1
Oil & Gas	7.0
Technology	3.8
Telecommunications	12.3
Utilities	1.2
Cash	2.1
	100.0

Notes:

Exposures are based on the Stock Exchange on which the underlying equity is listed and FTSE sector classifications.

The assets analysed above are the aggregated exposure of the MAM UK Equity Segregated fund, MAM UK Income Fund, MAM Global Equity Fund, MAM Global Focus Fund and MAM US Equity Fund. The aggregate represents 60.3% of the Company's total assets. 

Twenty Largest MAM UK Equity Segregated Fund Holdings 

at 31 March 2015

Company	Market value £000	% of MAM UK Equity Segregated fund
MAM UK Smaller Companies Fund*	5,859	8.4
Vodafone Group Plc	3,933	5.6
BP plc	3,606	5.2
HSBC holding plc	3,433	4.9
GlaxoSmithKline plc	3,205	4.6
Marks & Spencer Group PLC	2,915	4.2
Barclays Bank PLC	2,465	3.5
Orange SA	2,257	3.2
BT Group plc	2,249	3.2
Tesco PLC	2,196	3.1
Royal Dutch Shell plc	2,147	3.1
Royal Bank of Scotland Group plc	1,840	2.6
AstraZeneca PLC	1,802	2.6
Lloyds Banking Group plc	1,726	2.5
Telecom Italia SpA	1,630	2.3
Royal KPN NV	1,497	2.1
Wm Morrison Supermarkets plc	1,375	2.0
Carnival plc	1,128	1.6
Kingfisher plc	1,121	1.6
BAE Systems PLC	1,112	1.6
	47,496	67.9

*Previously MAM Special Situations Fund.

Interim Management Report              

The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal uncertainties for the remaining six months of the financial year are set out in the Chief Executive's Report above.

The financial statements continue to be prepared on a going concern basis. The approach used for the Annual Report is applied, including proper consideration of financial and cashflow forecasts, and it is believed that the Company has adequate financial resources to continue to operate for the foreseeable future.

The principal risks facing the Company are substantially unchanged since the date of the Annual Report for the year ended 30 September 2014 as set out in the Business Review

within the Strategic Report in that report with no particular subsequent heightened uncertainty. Risks faced by the Company include, but are not limited to, market risk, discount volatility, regulatory risk, financial risk, risks associated with banking and hedging and non-compliance with Section 1158 of the Corporation Tax Act 2010.

Responsibility Statement of the Directors in respect of the Half-Yearly Financial Report

In accordance with the Disclosure and Transparency Rules 4.2.7R and 4.2.8R, we confirm that to the best of our knowledge:

(a)  the condensed set of financial statements has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the European Union, as required by the Disclosure and Transparency Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and financial position of the Company;

(b)  the Chief Executive's Report includes a fair review of the information required to be disclosed under the Disclosure and Transparency Rule 4.2.7R, interim management report. This includes (i) an indication of important events that have occurred during the first six months of the financial year, and their impact on the condensed set of financial statements presented in the Half-Yearly Financial Report and (ii) a description of the principal risks and uncertainties for the remaining six months of the financial year; and

(c)  there were no changes in the transactions or arrangements with related parties as described in the Group's Annual Report for the year ended 30 September 2014 that would have had a material effect on the financial position or performance of the Group in the first six months of the current financial year.

Andrew J Adcock

Chairman

For and on behalf of the Board

27 May 2015

Condensed Consolidated Statement of Comprehensive Income  

for the half year ended 31 March 2015

		Half year ended 31 March 2015 (unaudited)			Half year ended 31 March 2014 (unaudited)			Year ended 30 September 2014 (audited)
	Note	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Investments
Gains on investments at fair value through profit or loss			18,310	18,310		8,526	8,526		13,933	13,933
Net investment result			18.310	18,310		8,526	8,526		13,933	13,933
Income
Income from investments	2	3,359	2	3,361	3,668		3,668	6,549		6,549
Other income	2	23		23	36		36	47		47
Total income		3,382	2	3,384	3,704		3,704	6,596		6,596
Expenses
Investment management fees		(65)	(195)	(260)	(31)	(92)	(123)	(93)	(280)	(373)
Administration expenses		(402)	(448)	(850)	(310)	(234)	(544)	(653)	(528)	(1,181)
Return before finance costs and taxation		2,915	17,669	20,584	3,363	8,200	11,563	5,850	13,125	18,975
Finance costs		(351)	(1,054)	(1,405)	(351)	(1,053)	(1,404)	(702)	(2,107)	(2,809)
Net return before taxation		2,564	16,615	19,179	3,012	7,147	10,159	5,148	11,018	16,166
Taxation	3	(11)		(11)	(16)		(16)	(45)		(45)
Net return after taxation for the period from continuing operations		2,553	16,615	19,168	2,996	7,147	10,143	5,103	11,018	16,121
Discontinued operations
Net Return after taxation for the period from discontinued operations	11				(191)	(2,378)	(2,569)	(232)	(2,584)	(2,816)
Total comprehensive income for the period		2,553	16,615	19,168	2,805	4,769	7,574	4,871	8,434	13,305
Return per ordinary share:		Pence	pence	pence	pence	pence	pence	pence	pence	pence
Basic and diluted for continuing operations	4	4.9	31.8	36.7	5.8	13.7	19.5	9.8	21.2	31.0
Basic and diluted for discontinuing operations					(0.4)	(4.5)	(4.9)	(0.4)	(5.0)	(5.4)
Basic and diluted total		4.9	31.8	36.7	5.4	9.2	14.6	9.4	16.2	25.6

The total column of this statement is the Consolidated Statement of Comprehensive Income of the Group, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The supplementary revenue return and capital return columns are prepared under guidance published by the Association of Investment Companies. See notes 1 to 17.

Condensed Consolidated Statement of Changes in Equity

for the half year ended 31 March 2015

	Notes	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Share options reserve £'000	Capital reserve £'000	Revenue reserve £'000	Own shares reserve £'000	Total £'000
Half year ended 31 March 2015 (unaudited)
30 September 2014		5,253	785	56	(104)	110,910	18,200	(1,039)	134,061
Net return for the period from continuing operations						16,615	2,553		19,168
Share options expense	5				3				3
Dividends declared and paid in period	7						(2,350)		(2,350)
31 March 2015		5,253	785	56	(101)	127,525	18,403	(1,039)	150,882
Half year ended 31 March 2014
30 September 2013		5,253	785	56	(123)	102,654	18,169	(1,628)	125,166
Net return for the period from continuing operations						7,147	2,996		10,143
Net return for the period from discontinued operations						(2,378)	(191)		(2,569)
Share options expense	5				10				10
Share options expense	7						(3,279)		(3,279)
31 March 2014		5,253	785	56	(113)	107,423	17,695	(1,628)	129,471
Year ended 30 September 2014
30 September 2013		5,253	785	56	(123)	102,654	18,169	(1,628)	125,166
Net return for the year from continuing operations						11,018	5,103		16,121
Net return for the year from discontinued operations						(2,584)	(232)		(2,816)
Share options expense	5				19				19
Sale of own shares by Employee Incentive Trust (EIT)						(178)		589	411
Dividends declared and paid in year	7						(4,840)		(4,840)
30 September 204		5,253	785	56	(104)	110,910	18,200	(1,039)	134,061

Condensed Consolidated Balance Sheet

at 31 March 2015

	Notes	31 March 2015 (unaudited) £'000	31 March 2014 (unaudited) £'000	30 September 2014 (audited) £'000
Non-current assets
Property and equipment		71	89	80
Investments at fair value through profit or loss	8	183,033	157,522	165,342
		182,104	157,611	165,422
Current assets
Trade and other receivables		385	483	338
Cash and cash equivalents		2,348	5,482	3,512
		2,733	5,965	3,850
Assets of the discontinued operation	11		1,041
Total current assets		2,733	7,006	3,850
Total assets		185,837	164,617	169,272
Current liabilities
Trade and other payables		(1,069)	(1,024)	(1,338)
Liabilities directly associated with the assets of the discontinued operation	11		(263)
Total current liabilities		(1,069)	(1,287)	(1,338)
Total assets less current liabilities		184,768	163,330	167,934
Non-current liabilities
Debentures		(33,886)	(33,859)	(33,873)
Total liabilities		(34,955)	(35,146)	(35,211)
Net assets		150,882	129,471	134,061
	Notes	31 March 2015 (unaudited) £'000	31 March 2014 (unaudited) £'000	30 September 2014 (audited) £'000
Represented by:
Ordinary share capital		5,253	5,253	5,253
Share premium		785	785	785
Capital redemption reserve		56	56	56
Share options reserve		(101)	(113)	(104)
Capital reserve		127,525	107,423	110,910
Revenue reserve		18,403	17,695	18,200
Own shares reserve		(1,039)	(1,628)	(1,039)
Equity Shareholders' Funds		150,882	129,471	134,061
Net asset value per share		pence	pence	pence
Basic and fully diluted	13	288.9	248.8	256.7

Condensed Consolidated Cash Flow Statement

for the half year ended 31 March 2015

	Notes	Half year ended  31 March 2015 (unaudited) £'000	Half year ended  31 March 2014 (unaudited) £'000	Year ended  30 September 2014 (audited) £'000
Net cash Inflow from operating activities	14	2,578	5,546	5,201
Financing activities
Interest paid		(1,392)	(1,392)	(2,783)
Dividends paid		(2,350)	(3,279)	(4,840)
Proceeds from sale of own shares by EIT				411
Net cash outflow from financing activities		(3,742)	(4,671)	(7,212)
(Decrease)/increase in cash and cash equivalents for period	15	(1,164)	875	(2011)
Cash and cash equivalents at start of period		3,512	5,523	5,523
Cash and cash equivalents at end of period		2,348	6,398	3,512
Cash and cash equivalents from continuing operations		2,348	5,482	3,512
Cash and cash equivalents attributed to discontinued operations			916
		2,348	6,398	3,512

Notes to the Condensed Consolidated Financial Statements

as at 31 March 2015

1. Accounting Policies

The Condensed Consolidated Financial Statements above comprise the unaudited results of the Company and subsidiaries for the six months to 31 March 2015 and are presented in pounds sterling, as this is the functional currency of the Group.

The Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting". They do not include all financial information required for full annual financial statements. The Condensed Consolidated Financial Statements have been prepared using the accounting policies adopted in the audited financial statements for the year ended 30 September 2014.

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 September 2014, and since 1 October 2014 no new standards were adopted.

2. Income

	Half year ended 31 March 2015 £'000	Half year ended 31 March 2014 £'000	Year ended 30 September 2014 £'000
Income from investments
Franked investment income*	3,280†	3,484	6,165
UK unfranked investment income		30	30
Overseas dividends	81	154	354
	3,361	3,668	6,549
Other income
Deposit interest		12	13
Sundry income	23	24	34
	23	36	47
Total income	3,384	3,704	6,549
Total income comprises:
Dividends*	3,361†	3,668	6,549
Interest		12	13
Other income	23	24	34
	3,384	3,704	6,596
Income from investments
Listed UK	1,215†	831	2,576
Listed overseas	81	154	354
Unlisted*	2,065	2,683	3,619
	3,361	3,668	6,549

* Includes MAM dividend income of £2,065,000 (31 March 2014 & 30 September 2014: £2,683,000 and £3,619,000).

† Includes capital dividend of £2,000 (31 March 2014 & 30 September 2014: £Nil and £Nil).

3. Taxation

The charge for the half year to 31 March 2015 is £11,000 (half year to 31 March 2014: £16,000; year ended 30 September 2014: £45,000). These amounts represent irrecoverable withholding tax paid on overseas investment income.

The Company has an effective corporation tax rate of 0%. As investment gains are exempt from tax owing to the Company's status as an approved Investment Trust and there is expected to be an excess of management expenses over taxable income there is no charge for corporation tax.

4. Calculation of Returns per Ordinary Share

Basic returns per ordinary share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. Basic return per ordinary share for the period is based on 52,219,613 (half year ended 31 March 2014: 52,044,613 and year ended 30 September 2014: 52,055,573) shares, being the weighted average number of shares in issue after adjustment for the shares held by the Employee Incentive Trust.

There is no dilution to the basic return per ordinary share since share options, if exercised, would be satisfied by shares already held by the Employee Incentive Trust.

5. Share-based payments

The Group currently operates one share-based payment scheme being the 2006 Long Term Incentive Plan which in turn has two components, firstly, options that relate to TSR-based (Total Shareholder Return) awards and secondly, those that relate to Matching awards. No awards have been made under the scheme in the period.

The number of outstanding options granted by the Company are summarised in the table below:

	31 March 2015	31 March 2014	30 September 2014
Number of outstanding options
LTIP: TSR-based Awards	216,031	209,318	211,991
LTIP: Matching Awards	12,660	12,253	12,423
	228,691	221,571	224,414

During the half-year ended 31 March 2015 the number of options outstanding under the LTIP TSR-based and Matching awards increased by 4,040 and 237 respectively. This is as a result of the 2014 4.5p final dividend, which is in accordance with the LTIP rules.

During the half year to 31 March 2015 the Group recognised a total charge for share-based payment transactions of £3,000 (Half year ended 31 March 2014: £10,000; Year ended 30 September 2014: £19,000).

The total shareholding of the Majedie Investments PLC Incentive Trust is 308,387 (31 March 2014: 483,387; 30 September 2014: 308,387) ordinary shares. The shares are held by the Trust until the relevant options are exercised or until they lapse. The cost of the shares is presented in the Condensed Consolidated Balance Sheet under the heading 'Own shares reserve', as a deduction from shareholders' funds in accordance with IFRS 2: Share-based payments.

6. Segment reporting

As detailed in the Company's Annual Report for the year ended 30 September 2014, geographical segments are considered to be the Group's primary reporting segment and business segments the secondary reporting segment. Following the closure of Javelin Capital LLP in 2014, the Group now has one business segment: its activity as an Investment Trust, which is the business of the parent company. Javelin Capital LLP previously operated a range of funds to third party investors and provided investment management and advisory services.

Investing activities

The Company's Investment Objective is to maximise total shareholder return whilst increasing dividends by more than the rate of inflation over the long term.

The Company operates as an investment trust company and its portfolio contains investments in companies listed in a number of countries. Geographical information about the portfolio is provided above

Half year ended 31 March 2015

Half year ended 31 March 2014

Year ended 30 September 2014

	Investing activities £'000	Investment management and advisory services £'000	Investing activities £'000	Investment management and advisory services £'000	Investing activities £'000	Investment management and advisory services £'000
Revenue from  external  customers *	3,384		3,700	4	6,586	4
Carrying amount of net assets	150,882		129,140	331	134,061

* The investment and other income of the Company.

7. Dividends

In accordance with International Accounting Standard 10: Events After the Balance Sheet Date, interim dividends are not accounted for until paid. The following table summarises the amounts recognised as distributions to equity holders in the relevant period:

	Half year ended	Half year ended	Year ended
	31 March	31 March	30 September
	2015 £'000	2014 £'000	2014 £'000
2014 Final dividend of 4.5p paid on 21 January 2015	2,350
2014 Interim dividend of 3.00p paid on 27 June 2014			1,561
2013 Final dividend of 6.30p paid on 22 January 2014		3,279	3,279
	2,350	3,279	4,840

The Directors propose an interim dividend for 2015 of 3p per share, to be paid on 26 June 2015.

8. Investments

All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price for listed securities, depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open ended investment companies are valued at the closing price, the bid price or the single price as appropriate, released by the relevant investment manager.

Fair values for unquoted investments, or investments for which the market is inactive, are established by using various valuation techniques in accordance with the International Private Equity and Venture Capital Valuation Guidelines. These may include recent arm's length market transactions, the current fair value of another instrument which has substantially the same earnings multiples, discounted cash flow analysis and option pricing models. Where there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised.

9. Fair Value Hierarchy

Except for the Company's 9.5% Debenture Stock 2020 and 7.25% Debenture Stock 2025, which is measured at amortised cost under the effective interest method, financial assets and financial liabilities of the Company are carried in the Balance Sheet at their fair value (investments) or the balance sheet amount is a reasonable approximation of fair value (due from brokers, dividends receivable, accrued income, cash at bank, due to brokers and overdraft positions and provision for deferred tax). The fair value is the amount at which the asset could be sold or the liability transferred in a current transaction between market participants, other than a forced or liquidation sale.

The table below sets out fair value measurements of financial assets in accordance with

IFRS fair value hierarchy system:

	Group
	31 March 2015
	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000
Financial assets
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities	69,906			69,906
Unlisted equity securities			42,955	42,955
Investment funds
Listed funds	70,172			70,172
	140,078		42,955	183,033

	Group
	31 March 2014
	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000
Financial assets
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities	77,726			77,726
Unlisted equity securities			33,792	33,792
Investment funds
Listed funds	46,004			46,004
	123,730		33,792	157,522

	Group
	30 September 2014
	Level 1	Level 2	Level 3	Total
	£'000	£'000	£'000	£'000
Financial assets
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities	63,156			63,156
Unlisted equity securities			41,655	41,655
Investment funds
Listed funds	60,531			60,531
	123,687		41,655	165,342

There have been no transfers during the period between Levels 1 and 2, and no transfers into or out of Level 3.

Investments whose values are based on quoted market prices in active markets, and therefore classified within Level 1, include active listed equities. The Group does not adjust the quoted price for these instruments.

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Investments classified within Level 3 have significant unobservable inputs. Level 3 instruments include private equity and corporate debt securities. As observable prices are not available for these securities, the Group has used valuation techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with International Private Equity and Venture Capital (IPEVC) Valuation Guidelines. New investments are initially carried at cost, for a limited period, being the price of the most recent investment in the investee. This is in accordance with IPEVC Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the amount for which an asset could be exchanged between knowledgeable, willing

parties in an arm's length transaction.

The Company's current Level 3 classified investments comprise certain immaterial unlisted investments, which total in aggregate £155,000, and the investment in MAM valued at £42,800,000. The carrying value of MAM is normally assessed twice a year by the Directors and is approved by the Audit Committee. The fair value of MAM is based on the price at which the Company may sell its shares back to MAM and its employees, which is currently considered to be the sole market for the Company's shares. The significant input in assessing the price is the earnings of MAM and a 5% increase/decrease in MAM's earnings would result in an increase/decrease of 4.3% in the carrying value of MAM.

The following table presents the movement in Level 3 instruments for the period ended

31 March 2015:

	2015
Group	Total £'000	Equity investments £'000
Opening balance	41,655	41,655
Sales - proceeds	(5,771)	(5,771)
Total gains for the year included in the Statement of Comprehensive Income	7,071	7,071
	42,955	42,955

The fair value of the debenture stock is calculated using Discounted Cash Flow analysis and by reference to the redemption yields of a similar companies' debt instrument, with an appropriate margin spread added.

	Half-year ended 31 March 2015		Half-year ended 31 March 2014		Year ended  30 September 2014
Group Financial liabilities	Book value £'000	Fair value £'000	Book value £'000	Fair value £'000	Book value £'000	Fair value £'000
£13.5m (2014: £13.5m) 9.5% debenture stock 2020	13,426	17,164	13,415	17,273	13,421	16,916
£20.7m (2014 £20.7m) 7.25% debenture stock 2025	20,460	26,158	20,444	24,997	20,452	24,737
	33,886	43,322	33,859	42,270	33,873	41,653

The above financial liabilities would be classified as Level 2 financial investments in the Fair Value hierarchy.

10. Principal financial risks

The principal financial risks which the Company faces include exposure to:

• Foreign currency risk

• Interest rate risk

• Other price risk

• Credit risk

• Liquidity risk

Further details of the Company's management of these risks and exposure to them is set out in Note 26 of the Company's Annual Report for the year ended 30 September 2014, as issued on 4 December 2014. There have been no changes to the management of or exposure to these risks since that date.

11. Discontinued operations

On 13 January 2014, the Board announced the decision of its Board of Directors to close Javelin Capital LLP, including its two wholly owned subsidiaries - Javelin Capital Services Limited and Javelin Capital Fund Management Limited - following the appointment of MAM to become the Investment Manager for the Company. The Company also decided to wind down its wholly owned subsidiary, Majedie Unit Trust. All activities associated with the Javelin Group ceased in 2014 and these entities have been placed in liquidation and wound up.

These entities comprised the discontinued group and given the above no further costs or losses have been recorded in the six months ended 31 March 2015.

	Half-year ended 31 March 2015				Half-year ended 31 March 2014			Year ended 30 September 2014
	Revenue £,000	Capital £'000	Total £'000	Revenue £,000	Capital £'000	Total £'000	Revenue £,000	Capital £'000	Total £'000
Discontinued operations
Income
Income from investments				(6)		(6)
Other income				6		6	4		4
Total Income							4		4
Expenses
Administration expenses				(191)	(383)	(574)	(236)	(500)	(736)
Write-off on disposal					(1,995)	(1,995)		(2,084)	(2,084)
Net return after taxation for the period from discontinued operations				(191)	(2,378)	(2,569)	(232)	(2,584)	(2,816)

	Half year ended 31 March 2015	Half year ended 31 March 2014	Year ended 30 September 2014
	£'000	£'000	£'000
Net cash outflows from discontinued operations		(359)	(2,706)
Net cash outflows		(359)	(2,706)

12. Majedie Asset Management Limited (MAM)

As at 31 March 2015, the Company has a 15.6% equity shareholding in MAM which provides investment management and advisory services.

The carrying value of the investment in MAM is included in the Condensed Consolidated Balance Sheet as part of investments at fair value through profit or loss:

	31 March 2015 £'000	31 March 2014 £'000	30 September 2014 £'000
Deemed cost of investment	540	627	627
Holding gains	42,260	32,473	40,673
Fair value at period end	42,800	33,100	41,300

During the period the Company sold 9,305 shares in total back to MAM (2,965 for cancellation with the remainder to the MAM EBT), for total consideration of £5.7m and a realised gain of £5.6m.

The carrying value of MAM in the 31 March 2015 Condensed Consolidated Financial Statements is its fair value as assessed at 31 March 2015.

13. Net Asset Value

The net asset value per share has been calculated based on equity Shareholders' funds and on 52,219,613 (31 March 2014:52,044,613 and 30 September 2014: 52,219,613) ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust.

14. Reconciliation of Operating Profit to Operating Cash Flow

	Half year ended 31 March 2015 £'000	Half year ended 31 March 2014 £'000	Year ended 30 September 2014 £'000
Consolidated net return before taxation from continuing operations	19,179	10,159	16,166
Consolidated net return before taxation from discontinued operations		(2,569)	(2,816)
Adjustments for:
Gains on investments relating to continuing operations	(18,310)	(8,526)	(13,933)
Losses on investments relating to discontinued operations			2,084
Consolidation adjustment on Javelin Capital fee income		118	118
Less non cash dividends received	(80)
Share-based remuneration	3	10	19
Depreciation	9	15	25
Purchases of investments	(20,850)	(122,160)	(145,143)
Sales of investments	21,351	125,200	145,976
	1,302	2,247	2,496
Finance costs	1,405	1,404	2,809
Operating cash flows before movements in working capital	2,707	3,651	5,305
(Decrease)/increase in trade and other payables	(47)	118	(9)
(Increase)/decrease in trade and other receivables	(72)	1,778	(54)
Net cash inflow from operating activities before tax	2,588	5,547	5,242
Tax recovered	8	15	26
Tax on unfranked income	(18)	(16)	(67)
Net cash inflow from operating activities	2,578	5,546	5,201

15. Reconciliation of Net Cash Flow to Movement in Net Debt

	Half year ended 31 March 2015 £'000	Half year ended 31 March 2014 £'000	Year ended 30 September 2014 £'000
(Decrease)/increase in cash	(1,164)	875	(2,011)
Non cash items	(12)	(12)	(26)
Change in net debt	(1,176)	863	(2,037)
Net debt beginning of period	(30,361)	(28,324)	(28,324)
Net debt at end of period	(31,537)	(27,461)	(30,361)

16. Related Party Transactions

Majedie Asset Management Limited

Majedie Asset Management Limited (MAM) became Investment Manager to the Company from 13 January 2014 under the terms of an Investment Agreement. The agreement provides for MAM to manage the Company's investment assets on both a segregated fund basis and also by investments into various MAM collective investment vehicles or funds. Details of the investment agreement are contained in the material contracts section of the directors' report in the Company's Annual Report for the year ended 30 September 2014. As Investment Manager, MAM is entitled to receive investment management fees. In respect of segregated fund investments these are charged directly to the Company and are shown as an expense in its accounts. Any fees due in respect of investments made into any MAM funds are charged to the fund and are therefore included as part of the investment value of the relevant holdings. Details concerning the Company's investments in the period in the MAM funds are shown in the Chief Executive's Report found above.

In addition to the above, the Company retains an investment in MAM itself. Mr JWM Barlow is a non-executive director of MAM but receives no remuneration for this role. MAM is accounted for as an investment in both the Company and Group accounts and is valued at fair value through profit or loss. Details concerning the Company's investment in MAM is included in the Chief Executive's Report above and in note 12 above.

Majedie Portfolio Management Limited

The Company pays certain costs on behalf of Majedie Portfolio Management Limited (MPM) for operating the Majedie Investments PLC Share Plan and additionally is charged a management fee by MPM. Any such costs paid by the Company are recharged to MPM, net of any management fees due.

Javelin Capital LLP

Javelin Capital LLP (Javelin Capital) was the Investment Manager and General Administrator to the Company until 13 January 2014, when MAM was appointed as Investment Manager, and is also the parent entity of Javelin Capital Fund Management Limited (JCFM) and Javelin Capital Services Limited (JCS). As such all Javelin Capital entities have ceased trading and are in liquidation and there were no transactions in the six months ended 31 March 2015.

The table below discloses the transactions and balances between those entities:

	Half year ended	Half year ended	Year ended
	31 March	31 March	30 September
	2015 £'000	2014 £0'000	2014 £'000
Transactions during the period:
Dividend income received from MAM	2,065	2,683	3,619
MAM share sale realised gains	5,659	18,766	18,766
JCEMAF advisory fee revenue due to Javelin Capital (from the Company)		122	122
Company investment management fee revenue due to Javelin Capital		165	165
Company administration fee revenue due to Javelin Capital		73	73
Company lease charge to JCS		9	9
JCS management fee income from Javelin Capital		571	571
MPM costs recharged by the Company	18	17	35
Investment management fee income due to MAM (segregated fund only)	260	123	373

	Half year ended	Half year ended	Year ended
	31 March	31 March	30 September
	2015 £'000	2014 £0'000	2014 £'000
Balances outstanding at the end of the period:
Between the Company and MAM (segregated fund investment management fees)	132		132
Value of Company's investment in MAM	42,800	33,100	41,300
Between JCS and the Company		448
Between JCS and Javelin Capital		456
Between the Company and MPM	95	95	95
Between JCFM and Javelin Capital		1

Transactions between group companies during the period were made on terms equivalent to those that occur in arm's length transactions.

17. Financial Information

The financial information contained in this Half-Yearly Financial Report does not constitute full statutory accounts as defined in Section 434 of the Companies Act 2006.

The information for the year ended 30 September 2014 has been extracted from the latest published audited accounts. Those accounts have been filed with the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. Those statutory accounts were prepared in accordance with International Financial Reporting Standards, as adopted by the European Union.

Company Information

Board of Directors			Depository
A J Adcock, Chairman P D Gadd R D C Henderson J W M Barlow (Executive) All Directors are non-executive unless indicated			BNY Mellon Trust & Depositary (UK) Limited BNY Mellon Centre 160 Queen Victoria Street London EC4V 4LA The Depositary also has delegated the safe keeping of the Company's assets to the Custodian, the Bank of New York Mellon SA/NV, London Branch.
Registered Office Tower 42 25 Old Broad Street London EC2N 1HQ Telephone: [phone] E-mail: [e-mail] Registered number: 109305 England Company Secretary and fund administrator Capita Sinclair Henderson Limited Trading as Capita Asset Services Beaufort House 51 New North Road Exeter EX4 4EP Telephone: [phone] Fax: [phone]			Registrars Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ Telephone: [phone] Auditors Ernst & Young LLP 1 More London Place London SE1 2AF Stockbrokers Westhouse Securities Limited Heron Tower 110 Bishopsgate London EC2N 4AY
Investment Manager			Website www.majedieinvestments.com
Majedie Asset Management Limited 10 Old Bailey London EC4M 7NH Telephone: [phone] Email: [e-mail]
Financial Calendar
Year end	30 September
Annual results	December
Half year results	May
Annual General Meeting	January
Dividends paid	January and June
2015 Interim Dividend Timetable
The interim dividend for the period ended 31 March 2015 is 3.0p per share.
Ex-dividend date	11 June
Record date	12 June
Payment date	26 June

 

END

 

 

IR LLFFDERIDFIE