Final Results

Murray Income Trust PLC 10 September 2003 MURRAY INCOME TRUST PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2003 The Directors of Murray Income Trust PLC announce the results, subject to final audit, for the year ended 30 June 2003. Background The UK equity market has enjoyed a good recovery since March, but the last year as a whole was difficult and disappointing for UK equities. The Net Asset Value total return for the year ended 30 June 2003 was -15.9%. This compares with the benchmark FTSE 350 Higher Yield Index return of -11.2% and the FTSE All-Share Index of -9.7%. At the year end, Murray Income was ranked 15 out of 17 within the UK Growth and Income sector of Investment Trusts. Attribution analysis shows that gearing cost 1.6% and stock selection 2.2%. The Manager is confident that the policy of selecting value companies outside the benchmark will be vindicated. Dividends In last year's Annual Report, the Board stated its intention to change the balance between the interim and final dividend payments, by increasing the size of the first three interim dividends and proposing a corresponding reduction in the final dividend. Subsequently, the first and second interim dividend were paid on 17 January 2003 and 16 April 2003, each at the rate of 4.25p per Ordinary share, with the third interim dividend being paid on 16 July 2003 at the rate of 4.5p. The revenue flow from the portfolio continues to remain secure and consequently the Directors propose a final dividend payment of 4.75p, payable on 31 October 2003 to holders of Ordinary Shares on the register on 3 October 2003, making a total dividend for the year ended 30 June 2003 of 17.75p. This represents an increase of 4.4% on the total dividends paid in the previous year. It is worth noting that dividends have been increased every year for more than 20 years. At 30 June 2003, Murray Income shares yielded 4.3%, which at that time was more than the redemption yield available on government bonds and much more than the yield available on cash deposits. Share Buy Backs During the year ended 30 June 2003, the Company did not repurchase any Ordinary shares. The discount, at which the shares traded to their Net Asset Value, steadily improved from 11.1% to 4.1% and showed few significant fluctuations. At the Annual General Meeting on 29 October 2003, Shareholders will be asked to renew the authority to buy back shares for the following twelve months. At present, any shares that are repurchased have to be immediately cancelled. In December 2003 regulations are expected to come into force, permitting investment trusts to buy and hold shares in the Company, with a view to reselling them on more favourable terms. The Directors are carefully considering this new and interesting opportunity. Strategy and Borrowing Although the portfolio continues to be managed with regard to the structure and weightings of the benchmark FTSE 350 Higher Yield Index, approximately 20% of holdings have been in stocks and sectors outside this benchmark. In particular, the Manager has included shares in the telecommunications, pharmaceuticals, food producers and beverage sectors which are believed to offer the prospect of good returns, while also reducing the volatility and risk of a portfolio which tracks the index. Bank borrowings, all of which are flexible and short-term, began the year at £31 million, peaked at £40 million and ended the year at £35 million. No costs, other than interest and commitment commission, were incurred in either drawing down or repaying any of this debt. Total committed facilities available to the Company currently amount to £60 million, although the Board has decided to reduce this to £45 million in October 2003. Your Board This year has seen the publication of various reviews that seek to improve corporate governance and reporting in quoted companies, the most visible of which has been Derek Higgs' review. Other reviews are ongoing; in July, the AITC published its Code of Corporate Governance and the FSA's proposed changes to the listing rules for investment companies are expected shortly. The Board is determined to remain at the forefront of best practice in looking after Shareholder interests. It believes that a strong, experienced independent Board, with the right balance of skills, is a fundamental part of good corporate governance. Following the sad death of Roger Adams, the Board appointed an independent firm of consultants to help find a new non-executive Director. Having assessed the mix of skills within the Board, the consultant was specifically briefed to identify candidates with a strong legal background. The Board is therefore delighted to have attracted Marian Glen, Head of Funds and Financial Services at Edinburgh-based lawyers Shepherd + Wedderburn. Her contribution is greatly valued and the Board considers that her knowledge and experience of the financial services industry enhances its combined experience. The Chairman of the Board, Blaise Hardman, has been a Director of Murray Income since 1988 and has decided to retire from the Board immediately after the AGM next year. Early in 2004 the Board will, therefore, again appoint consultants to help identify a new Director. The Board has also evaluated its options for his replacement as Chairman. The other non-executives were particularly aware of the need for continuity, independence from the Manager, and experience and understanding of the investment trust sector. Patrick Gifford was the Board's unanimous choice and the Board is pleased to report that he has agreed to succeed Blaise Hardman as Chairman. Also Adrian Coats agreed to become Chairman of the Audit Committee from 1 July 2003. Outlook The economy is experiencing modest growth, low interest rates and high levels of government borrowing. However, the stock market has recovered from the low levels reached earlier this year, and further gains are likely given the better background for corporate profits in 2004. In addition, the relatively high yield of Murray Income shares and the spread of investments in quality companies offer Shareholders some protection against a downturn in the market. In the longer term, the Directors firmly believe that a managed portfolio, based on the chosen benchmark index, will prove to be a rewarding investment. MURRAY INCOME TRUST PLC STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT*) for the year ended 30 June 2003 Year ended Year ended 30 June 2003 30 June 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Losses on - (74,111) (74,111) - (49,691) (49,691) investments Income from 15,854 - 15,854 15,207 - 15,207 investments Other income 187 - 187 177 - 177 Investment (1,210) (1,210) (2,420) (1,324) (1,324) (2,648) management fees Currency - - - - (4) (4) loss Other (865) - (865) (924) (12) (936) expenses --------------------------------------------------------- Net return before finance costs and 13,966 (75,321) (61,355) 13,136 (51,031) (37,895) taxation Finance costs (845) (845) (1,690) (497) (497) (994) of borrowing --------------------------------------------------------- Return attributable to equity Shareholders 13,121 (76,166) (63,045) 12,639 (51,528) (38,889) Ordinary (12,461) - (12,461) (11,862) - (11,862) dividends on --------------------------------------------------------- equity shares Transfer to/ 660 (76,166) (75,506) 777 (51,528) (50,751) (from) --------------------------------------------------------- reserves Return per 18.7 (108.5) (89.8) 18.0 (73.5) (55.5) Ordinary share (pence) Return per Ordinary share assuming full conversion of the B Ordinary shares (pence) 18.7 (108.5) (89.8) 17.9 (73.2) (55.3) * The revenue column of this statement is the profit and loss account of the Company. MURRAY INCOME TRUST PLC BALANCE SHEET as at 30 June 2003 As at As at 30 June 2003 30 June 2002 £'000 £'000 £'000 £'000 Fixed assets Investments 340,789 415,757 Current assets Debtors 1,049 1,708 Cash and overnight deposits 4,652 3,394 ------- ------- 5,701 5,102 Creditors Amounts falling due within one 36,961 9,824 year ------- ------- Net current liabilities (31,260) (4,722) ------- ------- Total assets less current 309,529 411,035 liabilities Creditors Amounts falling due after more than 5,000 31,000 one year ------- ------- 304,529 380,035 ------- ------- Capital and reserves Equity Shareholders' interest: Ordinary called up share capital 17,551 17,551 Share premium 7,955 7,955 Capital redemption reserve 4,050 4,050 Capital reserve - realised 266,475 304,032 Capital reserve - unrealised (2,803) 35,806 Revenue reserve 11,301 10,641 ------- ------- 304,529 380,035 ------- ------- Net Asset Value per Ordinary share 433.8p 541.3p (pence) CASH FLOW STATEMENT for the year ended 30 June 2003 Year ended Year ended 30 June 2003 30 June 2002 £'000 £'000 £'000 £'000 Operating activities Investment income received 16,061 15,566 Deposit interest received 164 168 Underwriting commission 26 26 received Investment management fees (3,206) (1,692) paid Secretarial fees paid (63) (37) Cash paid to and on behalf of (51) (56) Directors Other cash payments (1,190) (370) ------------------------------------- Net cash inflow from operating 11,741 13,605 activities Servicing of finance Interest paid (1,705) (1,097) ------------------------------------- Net cash outflow from servicing (1,705) (1,097) of finance Financial investment Purchase of investments (50,471) (75,440) Sale of investments 51,157 91,422 ------------------------------------- Net cash inflow from financial 686 15,982 investment Equity dividends paid (13,464) (11,356) Management of liquid resources Cash placed on short-term (3,684) - deposit ------------------------------------- Net cash outflow from management of liquid resources (3,684) - ------------------------------------- Net cash (outflow)/inflow (6,426) 17,134 before financing Financing Repurchase of shares - (4,359) Loans drawn down/(repaid) 4,000 (17,000) ------------------------------------- Net cash inflow/(outflow) from 4,000 (21,359) financing ------------------------------------- Decrease in cash (2,426) (4,225) ------------------------------------- MURRAY INCOME TRUST PLC YEAR ENDED 30 JUNE 2003 Dividends on Ordinary shares 2003 2002 £'000 £'000 First interim of 4.25p (2002 - 3.15p) 2,984 2,199 Second interim of 4.25p (2002 - 3.15p) 2,984 2,195 Third interim of 4.50p (2002 - 3.15p) 3,159 2,195 Proposed final dividend of 4.75p (2002 - 3,334 5,301 7.55p) Over accrual of previous year's proposed - (28) final dividend due to share buy-backs ------------------------ 12,461 11,862 ------------------------ The results stated above for the year ended 30 June 2002 are abridged from the full accounts for that year, which have received an unqualified report from the Auditors and were filed with the Registrar of Companies. A summary of investment changes during the year and the twenty largest investments as at 30 June 2003 are attached. Copies of this announcement will be available to the public at the registered office of the Company at 123 St Vincent Street, Glasgow. The Annual General Meeting will be held on 29 October 2003 at 12.30 p.m. ABERDEEN ASSET MANAGEMENT PLC Secretary 10 September 2003 MURRAY INCOME TRUST PLC SUMMARY OF INVESTMENT CHANGES DURING THE YEAR TO 30 JUNE 2003 Valuation Appreciation Valuation 30 June 2002 Transactions (depreciation) 30 June 2003 £'000 % £'000 £'000 £'000 % United Kingdom Equities 415,757 101.1 (857) (74,111) 340,789 100.4 --------------------------------------------------------------- Total investments 415,757 101.1 (857) (74,111) 340,789 100.4 --------------------------------------------------------------- Other net liabilities (4,722) (1.1) 3,462 - (1,260) (0.4) --------------------------------------------------------------- Total assets* 411,035 100.0 2,605 (74,111) 339,529 100.0 --------------------------------------------------------------- * represents total assets less current liabilities after excluding short-term loans of £30,000,000 as at 30 June 2003 Valuation Summary of net assets 30 June 2003 ---------------------- £'000 % Equities 340,789 111.9 Other net liabilities (1,260) (0.4) Borrowings (35,000) (11.5) ---------------- Equity Shareholders' interest 304,529 100.0 ================ MURRAY INCOME TRUST PLC TWENTY LARGEST INVESTMENTS as at 30 June 2003 Sector Valuation % of Investment Description £'000 Total Assets BP Amoco Oil & Gas 42,025 12.4 HSBC Holdings Banks 30,072 8.9 Shell Transport & Oil & Gas 27,280 8.0 Trading Lloyds TSB Banks 16,048 4.7 Barclays Banks 14,130 4.2 Royal Bank of Banks 13,630 4.0 Scotland Aviva Life Assurance 10,224 3.0 Diageo Beverages 9,705 2.9 Anglo American Mining 8,612 2.5 Rio Tinto Mining 8,208 2.4 GlaxoSmithKline Pharmaceuticals 8,153 2.4 Standard Chartered Banks 7,654 2.2 Imperial Tobacco Tobacco 6,715 2.0 J Sainsbury Food & Drug 6,692 2.0 Retailers Abbey National Banks 6,352 1.9 British American Tobacco 6,359 1.9 Tobacco National Grid Electricity 6,165 1.8 Scottish & Southern Electricity 6,077 1.8 Energy Unilever Food Producers & 5,406 1.6 Processors Great Universal General Retailers 5,152 1.5 Stores ------------------------ 244,659 72.1 ------------------------ This information is provided by RNS The company news service from the London Stock Exchange

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