Interim Results

Manchester & London Inv Tst PLC 18 February 2005 Manchester & London Investment Trust plc ANNOUNCEMENT OF THE UNAUDITED INTERIM GROUP RESULTS For the six months ended 31st January 2005 Attached pages 1 - 5 Enquiries : Manchester & London Investment Trust plc Brian S Sheppard Tel : 0161-228-1709 Brokers : Midas Investment Management Limited Mark B B Sheppard Tel : 0161-228-1709 Manchester & London Investment Trust plc Announcement of the interim group results The Directors announce the unaudited interim figures for the six months ended 31st January 2005 Consolidated Statement of Total Return (incorporating the revenue account) For the six months ended 31st January 2005 (unaudited) Six months ended 31st January 2005 Six months ended 31st January 2004 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 (Loss) profit on sale of investments - (51) (51) - 290 290 Increase in unrealised appreciation - 2,667 2,667 - 2,783 2,783 Investment income 489 - 489 499 - 499 Investment management fee (28) (59) (87) (25) (48) (73) Other expenses (101) - (101) (105) - (105) ------- -------- -------- -------- -------- -------- Return on ordinary activities before taxation 360 2,557 2,917 369 3,025 3,394 Taxation - - - - - - ------- -------- -------- -------- -------- -------- Return on ordinary activities after taxation 360 2,557 2,917 369 3,025 3,394 Dividends in respect of non- equity shares (28) - (28) (28) - (28) ------- -------- -------- -------- -------- -------- Return attributable to equity shareholders 332 2,557 2,889 341 3,025 3,366 Dividends in respect of equity shares (188) - (188) (188) - (188) ------- -------- -------- -------- -------- -------- Transfer to reserves 144 2,557 2,701 153 3,025 3,178 ------- -------- -------- -------- -------- -------- Return per ordinary share (pence) Basic 4.43 34.09 38.52 4.55 40.33 44.88 ------- -------- -------- -------- -------- -------- Fully diluted 3.44 24.40 27.84 3.52 28.87 32.39 ------- -------- -------- -------- -------- -------- 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. The statement for the period ended 31st January 2005 is unaudited and is not the Company's statutory statement. Dividends per preference share accrue at the rate of 7.6% p.a. Interim dividend proposed per 25p ordinary share 2.5p (2004: 2.5p) The ordinary interim dividend is payable on 22nd April 2005 to shareholders on the Register at the close of business on 29th March 2005. Page 1 Manchester & London Investment Trust plc Consolidated Balance Sheet At 31st January 2005 (unaudited) As at 31st January 2005 As at 31st January 2004 £'000 £'000 £'000 £'000 Fixed Assets Investments 24,426 24,836 Current Assets Debtors 70 71 Cash and short term deposits 7,663 4,015 ----------- --------- Creditors 7,733 4,086 Amounts falling due within one year (306) (894) ----------- --------- Net Current Assets 7,427 3,192 ------- --------- Total assets less current liabilities 31,853 28,028 ------- --------- Capital and Reserves Called-up Share Capital 2,619 2,619 Capital reserves 26,419 22,650 Revenue reserve 2,815 2,759 ------- --------- Total shareholders' funds 31,853 28,028 ------- --------- = Equity interests - Ordinary shares 31,109 27,284 Non-equity interests - Preference shares 744 744 ------- --------- 31,853 28,028 == ------- --------- Net Asset Value per share Ordinary shares - basic 414.8p 363.8p ------- --------- Ordinary shares - fully diluted 304.0p 267.5p ------- --------- Notes: The accounts at 31st January are unaudited and are not the Company's statutory accounts. The information for the period ended 31st January 2004 does not constitute statutory accounts but has been extracted from the latest published accounts 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(2) or (3) of the Companies Act 1985. Page 2 Manchester & London Investment Trust plc Consolidated Cashflow Statement For the six months ended 31st January 2005 (unaudited) Six months ended Six months ended 31st January 2005 31st January 2004 £'000 £'000 £'000 £'000 Operating activities Investment income received 416 506 Interest received 72 88 Investment management fees paid (82) (79) Other cash payments (99) (90) --------- --------- -- Net cash inflow from operating activities 307 425 Servicing of finance Preference dividend paid (28) (28) --------- --------- - Net cash outflow from servicing of finance (28) (28) Investing activities Purchase of investments (2,241) (2,786) Sale of investments 6,834 1,116 --------- --------- Net cash inflow (outflow) from financial investment 4,593 (1,670) Financing Repayment of loan from holding company - (5,413) --------- --------- Net cash outflow from financing - (5,413) Equity dividends paid (525) - --------- --------- Increase (decrease) in cash 4,347 ( (6,686) --------- --------- Reconciliation of net cash flow to movement in net funds Increase (decrease) in cash in period 4,347 (6,686) Net funds at beginning of the period 3,316 10,701 --------- --------- Net funds at end of the period 7,663 4,015 --------- --------- Page 3 Manchester & London Investment Trust plc Largest Holdings At 31st January 2005 PZ Cussons Ordinary and 'A' Valuation % of Sector Ordinary 10p Shell Transport & Trading £'000 Net Assets Personal Care & Ordinary 25p Household Products TDG Ordinary 1p 5,684 17.85 Oil & Gas Mouchel Parkman Ordinary 0.25p 3,708 11.64 Transport BAE Systems Ordinary 2.5p 3,597 11.29 Support Services Scottish & Newcastle Ordinary 20p 3,132 9.83 Aerospace & Defence Novar Ordinary 27 7/9p 2,774 8.71 Beverages Aberdeen Asset Management Ordinary 10p 1,751 5.50 Construction & Building Materials Quintain Estates 1,425 4.47 Speciality & Ordinary 25p 536 1.68 Other Finance Other investments 515 1.62 Real Estate Total investments 1,304 4.09 Net current assets ____________ __________ Total net assets 24,426 76.68 7,427 23.32 ____________ ___________ 31,853 100.00 ____________ ___________ Page 4 Manchester & London Investments Trust plc CHAIRMAN'S STATEMENT The cautious optimism for the current year expressed last September, has been reflected in an increase in the net asset value of 9.27% during the first half of the current year which compares with an increase in our benchmark FTSE Actuaries All-Share Index of 11.36%. This marginal underperformance reflects the relatively high level of liquidity held during the period under review, which has averaged 11% of the portfolio. It follows that we remain cautious about the international outlook as the Asian economies continue to finance the huge US trade deficit against a background of a steady decline in the US dollar, notwithstanding its recent rally which looks suspiciously technical. In the meantime, US interest rates have started to creep upwards from a near zero base, but the Fed remains constrained by the nervousness of markets which could panic if the authorities appear to be under pressure to raise rates at a faster pace in order to prevent a withdrawal of dollar deposits. Here in the UK (and Europe) rates are likely to remain stable as the rising level of personal bankruptcies starts to reflect the cooling of the consumer boom, although the continuing rise in Government spending will probably be sustained at a level which is completely divorced from prudence. We thus continue to live in a seemingly unreal world and await events, not knowing whether deflation or inflation will resolve these problems, although stock markets seem to be betting on the latter which may, however, be preceded by the former. A current feature of stock markets is a burgeoning takeover frenzy aided and abetted by the recent growth in hedge funds whose investment strategies include, inter alia, building stakes in potential target companies with a view to putting them 'into play' for venture capital funds to break up, and our performance during the six months under review has been influenced by this factor. Indeed, the reference in the 2004 accounts to a wind of change blowing through the world of investment trusts is exemplified by the narrowing of discounts (to net asset values) resulting from stakes built up by hedge funds who then seek to liquidate their targets. So far it has not proved necessary to activate the authorities approved by shareholders at last year's Annual General Meeting, nor has it been deemed to be advantageous to change the Company's year end, as the above referred to changes in the mood of the market, vis-a-vis investment trusts, has worked in the Company's favour. The Directors will, however, continue to closely monitor any change of sentiment and will take any action which they consider to be in the best interests of all shareholders at the appropriate time. The general consensus opinion of investment managers at the turn of the year was that the first half of 2005 would witness a continuation of the upward trend in equities, but that the markets would fall back in the second half as consumer and Government spending would reduce. The much mooted FTSE 100 target of 5,000 has already been breached, thanks in part to the increased level of merger activity, but whether the current level is justified by the economic prospects is open to question. Accordingly, we have tended to err on the side of caution during the first half of the current year by reducing or eliminating some of our holdings which appeared to be vulnerable to deteriorating trading, only to find that they have subsequently benefited from the frothy tide of takeover rumours. As a result we have, at present, a level of 24% liquidity and we will continue to search out investment opportunities where we believe there is real value. The major problem of the huge US trade deficit remains but, providing the current dollar weakness does not develop into a rout, the investment background remains reasonably favourable and accordingly, the Directors have today declared an unchanged interim dividend of 2.5p per share which will be paid on 22nd April 2005 to shareholders on the Register at the close of business on 29th March 2005. P. H. A. Stanley FCA Chairman 18th February 2005 Page 5 This information is provided by RNS The company news service from the London Stock Exchange

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