Final Results

Manchester & London Inv Tst PLC 28 September 2004 Manchester & London Investment Trust plc ANNOUNCEMENT OF THE AUDITED GROUP RESULTS For the year ended 31st July 2004 Attached pages 1 - 5 Enquiries : Manchester & London Investment Trust plc B S Sheppard Tel : 0161-228-1709 Brokers : Midas Investment Management Limited M B B Sheppard Tel : 0161-228-1709 Manchester & London Investment Trust plc 28th September 2004 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 1 of 5 The Directors Announce the Audited Figures For the year ended 31st July 2004 Consolidated Statement of Total Return (incorporating the revenue account) 2004 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 4,298 4,298 - 1,651 1,651 Income (note 1) 1,085 43 1,128 1,125 - 1,125 Investment management (56) (104) (160) (55) (102) (157) fee Other expenses (194) - (194) (178) - (178) ------- -------- -------- -------- -------- -------- Return on ordinary activities before taxation 835 4,237 5,072 892 1,549 2,441 Taxation on ordinary - - - (30) 30 - activities ------- -------- -------- -------- -------- -------- Return on ordinary activities after taxation 835 4,237 5,072 862 1,579 2,441 Dividends in respect (57) - (57) (57) - (57) of non-equity shares ------- -------- -------- -------- -------- -------- Return attributable to equity shareholders 778 4,237 5,015 805 1,579 2,384 Dividends in respect (713) - (713) (713) - (713) of equity shares ------- -------- -------- -------- -------- -------- Transfer to reserves 65 4,237 4,302 92 1,579 1,671 ------- -------- -------- -------- -------- -------- Return per ordinary share (pence) Basic 10.37 56.50 66.87 10.73 21.06 31.79 ------- -------- -------- -------- -------- -------- Fully diluted 7.97 40.44 48.41 8.23 15.07 23.30 ------- -------- -------- -------- -------- -------- The revenue column of this statement is the consolidated profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. Non-equity dividends Dividends per preference share accrue at the rate of 7.6% p.a. Equity dividends Interim dividend paid per each 25p ordinary share 2.5p (2003 - 2.5p) Final divided proposed per each 25p ordinary share 7.0p (2003 - 7.0p) The ordinary dividend is payable on 24th November 2004 to shareholders on the Register at the close of business on 15th October 2004. Manchester & London Investment Trust plc 28th September 2004 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 2 of 5 Consolidated Balance Sheet At 31st July 2004 2004 2003 £'000 £'000 £'000 £'000 Fixed Assets Investments 26,401 20,093 Current Assets Debtors 75 170 Cash and short term 3,316 10,701 deposits ---------- --------- 3,391 10,871 Creditors Amounts falling due within (640) (6,114) one year ---------- --------- --- Net Current Assets 2,751 4,757 ------- --------- Net Assets 29,152 24,850 ------- --------- Capital and Reserves Called-up Share Capital 2,619 2,619 Other reserves Capital reserve - 18,866 19,115 realised Capital reserve - 5,075 589 unrealised Goodwill reserve (79) (79) Revenue reserve 2,671 2,606 ------- --------- Total shareholders' 29,152 24,850 funds ------- --------- Equity interests - 28,408 24,106 Ordinary shares Non-equity interests - 744 744 Preference shares ------- --------- 29,152 24,850 ------- --------- Net Asset Value per share Ordinary shares - basic 378.8p 321.4p ------- --------- Ordinary shares - fully 278.2p 237.2p diluted ------- --------- Manchester & London Investment Trust plc 28th September 2004 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 3 of 5 Consolidated Cashflow Statement For the year ended 31st July 2004 2004 2003 £'000 £'000 £'000 £'000 Operating activities Investment income received 1,083 1,288 Interest received 126 274 Investment management fees (161) (150) paid Other cash payments (252) (175) Net cash inflow from operating 796 1,237 activities Servicing of finance Preference dividend paid (57) (57) Net cash outflow from servicing (57) (57) of finance Investing activities Purchase of investments (5,665) (16,263) Sale of investments 3,667 26,014 Net cash (outflow) inflow from investing activities (1,998) 9,751 Financing Repayment of loan from holding (5,413) - company Net cash outflow from (5,413) - financing Equity dividends paid (713) (638) (Decrease) increase in cash (7,385) 10,293 Reconciliation of net cash flow to movement in net funds (Decrease) increase in cash in (7,385) 10,293 year Net funds at beginning of 10,701 408 year Net funds at end of year 3,316 10,701 Manchester & London Investment Trust plc 28th September 2004 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 4 of 5 Note 1 2004 2003 £'000 £'000 Income Income from investments UK dividends 967 750 Government - 83 securities 967 833 Other income Deposit interest 118 292 Total income 1,085 1,125 The above financial information does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. The comparative financial information is based on the statutory financial statements for the year ended 31st July 2003. Those financial statements, upon which the auditor issued an unqualified opinion, have been delivered to the Registrar of Companies. Statutory financial statements for the year ended 31st July 2004 will be delivered to the Registrar. Manchester & London Investments Trust plc 28th September 2004 ANNOUNCEMENT OF THE AUDITED GROUP RESULTS Page 5 of 5 CHAIRMAN'S STATEMENT Despite the recent rally, confidence in the stock market remains fragile with the FTSE All-Share Index 0.69% lower than its level at the beginning of the year when economic forecasts were predicting a strong recovery in the US and Western economies in general. Since then, whilst there has certainly been a useful recovery, doubts about its sustainability have grown, reflecting ongoing worries about the aftermath of the Iraqi war, the steep rise in the price of oil and evidence that economic growth is beginning to stall. During the second half of our financial year, the net asset value per share increased from 267.5p to 278.2p, an increase of 4% which compares with an increase of 0.2% in the FTSE All-Share Index. Over the financial year as a whole, our net asset value per share has increased from 237.2p to 278.2p (17.3%) which compares with an increase of 7.2% in our benchmark index. Our cash balance of £3.3m at the year end was marginally lower than when I last reported to shareholders, reflecting relatively minor changes in the portfolio. Although stock markets currently appear to be stable, there remains considerable concern about the profligacy of both US and UK Government spending and trade deficits but there is unlikely to be any corrective action until after both elections, and maybe not even then. It is possible, however, that once these are out of the way, markets could become increasingly volatile as investors throughout the world start to take out their respective position in the financial tug of war between inflation and deflation, which surely must be fought out some time in the future. Whilst history may be on the side of inflation, it could well be the case that it would be the pyrrhic victor after deflation has taken its toll. In the meantime, there is no slowing in the headlong rush by both the US and UK Governments to spend money at an ever increasing pace, although there are definite signs that consumers are at long last beginning to flag. Generally speaking, our portfolio has performed satisfactorily during the year under review with several of our holdings producing an increased income, notably TDG and PZ Cussons, the latter having also increased in value by 52.8% thus maintaining its position as our largest investment. We also took advantage of the fall in the share price of Shell Transport and Trading on the grounds that market pressures could bring about changes in the management structure, which would do much to restore its status as one of the world's leading companies. These are examples of our investment objective and policy which is to achieve capital appreciation together with a reasonable level of income, the latter being of particular importance in a low interest rate environment which we think is likely to persist as doubts re-emerge as to the durability of the fragile recovery in world economic growth. Closer to home, there is a discernible wind of change starting to blow through the world of investment trusts and fund management companies, and your Directors are aware that the Company should position itself to ensure that it is not disadvantaged by such changes and indeed, must be in a position to capitalise on any opportunities which may present themselves. Towards this end and to allow maximum flexibility moving forward, resolutions will be put to shareholders at the forthcoming Annual General Meeting to give the Directors authority to allot new shares, to authorise the Directors to make market purchases of its own shares (which it may then retain as treasury shares), and also to seek an amendment to the terms of the existing convertible preference shares (with consequent changes to the Articles of Association) in connection with the potential issue of new shares. Shareholders will recall that at last year's Annual General Meeting the Directors outlined their intention to take advantage of the change in the law regarding treasury shares with a view to issuing these in lieu of the final dividend to shareholders. In the event, this proposal was not implemented on cost grounds, but straightforward purchases by the Company of its own shares (which can then be held in treasury and subsequently sold at an appropriate time) will not have the same cost implications. The Directors are also considering, for convenience and conventional reasons, changing the Company's year end to 31st December, with the result that the current accounting period would be the 5 month period ending on 31st December 2004. We are proposing a final dividend of 7p per ordinary share, making an unchanged total of 9.5p for the year, which will be payable on the 24th November 2004, to shareholders registered on the 15th October 2004. I look forward to welcoming shareholders to our Thirty Second Annual General Meeting to be held at 45 Spring Gardens, Manchester M2 2BG, at 12.45 pm on Thursday, 18th November 2004, after which the results of the Wimbledon draw will be announced. P. H. A. Stanley FCA Chairman 28th September 2004 This information is provided by RNS The company news service from the London Stock Exchange

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